AT&T

“OPERATING ENVIRONMENT AND TRENDS OF THE BUSINESS 2026 Revenue Trends We expect revenue growth in our wireless and broadband businesses as customers demand instant connectivity and higher speeds made possible by wireless network enhancements through 5G deployment and our fiber network expansion.”

Annual report 2025A · The company itself

“We are in a period of rapid growth in wireless video and data usage and believe that there are substantial opportunities available for next-generation integrated services that 27 AT&T Inc. Dollars in millions except per share amounts combine technologies and services.”

Annual report 2025A · The company itself

“Wireless Industry-wide network densification and 5G technology expansion efforts, which are needed to satisfy extensive demand for video and internet access, will involve significant deployment of “small cell” equipment.”

Annual report 2025A · The company itself

“Additional spectrum will be needed industrywide for 5G and future services. On July 4, 2025, as part of the omnibus reconciliation package (One Big Beautiful Bill (OBBB)), the President signed into law a provision that reauthorized, for 10 years, FCC statutory authority to conduct spectrum auctions and further required auction of 800 MHz of spectrum within eight years.”

Annual report 2025A · The company itself

“In November 2024, we agreed to purchase select spectrum licenses from United States Cellular Corporation (UScellular) for approximately $1,000, subject to closing conditions, including the consummation of UScellular’s sale of its wireless operations and select spectrum assets to T-Mobile US, Inc. We completed our acquisition of these licenses on January 13, 2026, with a cash payment of $1,018.”

Annual report 2025A · The company itself

“On May 21, 2025, we agreed to acquire substantially all of Lumen’s Mass Markets fiber business for $5,750 in cash, subject to purchase price adjustments. At the time of signing, the pending acquisition covered approximately one million fiber customers, and also included fiber network assets that reached more than four million fiber locations.”

Annual report 2025A · The company itself

“Improvements in these services depend on many factors, including continued access to and deployment of adequate spectrum and the capital needed to expand our wireline network to support transport of these services.”

Annual report 2025A · The company itself

“We have spent, and plan to continue spending, significant capital and other resources on the ongoing development and deployment of our 5G and fiber networks.”

Annual report 2025A · The company itself

“We intend for these efficiencies to enable increased investments in our strategic areas of focus, which include improving broadband connectivity (for example, fiber and 5G).”

Annual report 2025A · The company itself

“Increases in our debt levels to fund spectrum purchases, or other strategic decisions could adversely affect our ability to finance future debt at attractive rates and reduce our ability to respond to competition and adverse economic trends. We intend to and have incurred debt to fund significant acquisitions, as well as spectrum purchases needed to compete in our industry.”

Annual report 2025A · The company itself

“Expected Growth Areas Over the next few years, we expect our growth to come from wireless and IP-based fiber broadband services.”

Annual report 2025A · The company itself

“Integration of Wireless and Fiber Services The communications industry has evolved into internet-based technologies capable of converging the offering of wireline and wireless services. As the owner and operator of scaled wireless and fiber networks, we plan to continue to focus on expanding our wireless network capabilities and providing broadband offerings that allow customers to integrate their home or business fixed services with their mobile service.”

Annual report 2025A · The company itself

“As a provider of telecommunications and technology services, we sell handsets, wireless data cards, wireless computing devices and customer premises equipment manufactured by various suppliers for use with our voice and data services and depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment, and wireless-related equipment such as mobile hotspots, handsets, wirelessly enabled computers, wireless data cards and other connected devices for our customers.”

Annual report 2025A · The company itself

“Segment Operating Revenues Mobility $ 89,482 $ 85,255 $ 83,982 5.0 % 1.5 % Business Wireline 17,231 18,819 20,883 (8.4) (9.9) Consumer Wireline 14,183 13,578 13,173 4.5 3.1 Total Segment Operating Revenues $ 120,896 $ 117,652 $ 118,038 2.8 % (0.3) % Segment Operating Income (Loss) Mobility $ 27,196 $ 26,314 $ 25,861 3.4 % 1.8 % Business Wireline (816) (88) 1,289 — — Consumer Wireline 1,547 869 651 78.0 33.5 Total Segment Operating Income $ 27,927 $ 27,095 $ 27,801 3.1 % (2.5) % Operating revenues increased in 2025, driven by increases in Mobility service revenue and our Consumer Wireline business unit, driven by gains in wireless and broadband services.”

Annual report 2025A · The company itself

“Dollars in millions except per share amounts Service revenue increased during 2025, largely due to growth from subscriber gains, partially offset by promotional activity.”

Annual report 2025A · The company itself

“Broadband revenues increased in 2025, driven by an increase in fiber revenues of 17.0%. Higher fiber revenues reflect an increase in fiber customers, which we expect to continue as we invest further in building our fiber footprint, and higher ARPU.”

Annual report 2025A · The company itself

“Fiber and advanced connectivity services revenues increased in 2025, driven by higher fiber and fixed wireless revenues.”

Annual report 2025A · The company itself

“As of December 31, 2025, we served 145 million wireless subscribers in North America, with 120 million in the United States. Our LTE technology covers over 441 million people in North America, and in the United States, we cover all major metropolitan areas and over 337 million people.”

Annual report 2025A · The company itself

“Segment Operating Revenues Mobility $ 89,482 $ 85,255 $ 83,982 5.0 % 1.5 % Business Wireline 17,231 18,819 20,883 (8.4) (9.9) Consumer Wireline 14,183 13,578 13,173 4.5 3.1 Total Segment Operating Revenues $ 120,896 $ 117,652 $ 118,038 2.8 % (0.3) % Segment Operating Income (Loss) Mobility $ 27,196 $ 26,314 $ 25,861 3.4 % 1.8 % Business Wireline (816) (88) 1,289 — — Consumer Wireline 1,547 869 651 78.0 33.5 Total Segment Operating Income $ 27,927 $ 27,095 $ 27,801 3.1 % (2.5) % Operating revenues increased in 2025, driven by increases in Mobility service revenue and our Consumer Wireline business unit, driven by gains in wireless and broadband services.”

Annual report 2025A · The company itself

“Higher product or service prices may result in reductions in sales volume or increases in subscriber churn. Consumers may be less willing to pay a price differential for our products and services and may increasingly purchase lower-priced offerings from us or our competitors, or may forego some purchases altogether, during a period of inflationary pressure or an economic downturn.”

Annual report 2025A · The company itself

“These competition and capacity constraints will continue to put pressure on pricing and margins as companies compete for potential customers.”

Annual report 2025A · The company itself

“Churn The effective management of subscriber churn is critical to our ability to maximize revenue growth and to maintain and improve margins.”

Annual report 2025A · The company itself

“Segment Operating Revenues Mobility $ 89,482 $ 85,255 $ 83,982 5.0 % 1.5 % Business Wireline 17,231 18,819 20,883 (8.4) (9.9) Consumer Wireline 14,183 13,578 13,173 4.5 3.1 Total Segment Operating Revenues $ 120,896 $ 117,652 $ 118,038 2.8 % (0.3) % Segment Operating Income (Loss) Mobility $ 27,196 $ 26,314 $ 25,861 3.4 % 1.8 % Business Wireline (816) (88) 1,289 — — Consumer Wireline 1,547 869 651 78.0 33.5 Total Segment Operating Income $ 27,927 $ 27,095 $ 27,801 3.1 % (2.5) % Operating revenues increased in 2025, driven by increases in Mobility service revenue and our Consumer Wireline business unit, driven by gains in wireless and broadband services.”

Annual report 2025A · The company itself

“Broadband revenues increased in 2025, driven by an increase in fiber revenues of 17.0%.”

Annual report 2025A · The company itself

“Recent spending by hyperscalers and others to support AI is beginning to pressure supply chains for goods such as semiconductors and other network components.”

Annual report 2025A · The company itself

“We depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment and wireless-related equipment such as mobile hotspots, handsets, wirelessly enabled computers, wireless data cards and other connected devices for our customers. In some instances, we depend on key single-source suppliers to provide important inputs where there are few alternative suppliers available.”

Annual report 2025A · The company itself

“Equipment revenue increased in 2025, primarily driven by higher wireless device sales volumes.”

Annual report 2025A · The company itself

“As a provider of telecommunications and technology services, we sell handsets, wireless data cards, wireless computing devices and customer premises equipment manufactured by various suppliers for use with our voice and data services and depend on suppliers to provide us, directly or through other suppliers, with items such as network equipment, customer premises equipment, and wireless-related equipment such as mobile hotspots, handsets, wirelessly enabled computers, wireless data cards and other connected devices for our customers.”

Annual report 2025A · The company itself

“Recent spending by hyperscalers and others to support AI is beginning to pressure supply chains for goods such as semiconductors and other network components.”

Annual report 2025A · The company itself

“These investments will help prepare us to meet the continued increase in customer demand for enhanced wireless and broadband services, including on-the-go video streaming, augmented reality, “smart” technologies, user generated content and AI.”

Annual report 2025A · The company itself

“Further, we are using and intend to further use AI-driven efficiencies in our network design and operations, software development, sales, marketing, customer support services and general and administrative costs. The models used in those products or operations, particularly generative AI models, may produce output or take action that is incorrect, release private or confidential information, reflect biases included in the data on which they are trained, infringe on the intellectual property rights of others, or be otherwise harmful.”

Annual report 2025A · The company itself

“We also expect cost savings through AI-driven efficiencies in network design and operations, software development, sales, marketing, customer support services and general and administrative costs.”

Annual report 2025A · The company itself

“Fiber and advanced connectivity services revenues increased in 2025, driven by higher fiber and fixed wireless revenues.”

Annual report 2025A · The company itself

“As we expand our fiber reach, we will be orienting our business portfolio to leverage this opportunity to offset continuing declines in legacy Business Wireline products by growing connectivity with small to mid-sized businesses.”

Annual report 2025A · The company itself

“We plan to use our strong fiber and wireless assets, broad distribution and integrated product offerings to strengthen our overall market position.”

Annual report 2025A · The company itself

“Our Business Wireline operating income margin was (4.7)% in 2025, (0.5)% in 2024 and 6.2% in 2023.”

Annual report 2025A · The company itself

“In order to stem broadband connectivity losses to cable competitors in our non-fiber wireline areas, we have been expanding our all-fiber wireline network and where we offer our fixed wireless access product.”

Annual report 2025A · The company itself

“We intend for these efficiencies to enable increased investments in our strategic areas of focus, which include improving broadband connectivity (for example, fiber and 5G).”

Annual report 2025A · The company itself

“As customers are demanding faster and more reliable services, we are decommissioning our legacy copper network and enhancing our offerings to include services that provide better experiences over newer technologies, such as AT&T Internet Air.”

Annual report 2025A · The company itself

“We continue to transform our operations to be more efficient and effective. We are restructuring businesses, working with regulators and customers to sunset legacy networks, improving customer service and ordering functions through digital transformation, sizing our support costs and staffing with current activity levels, and reassessing overall benefit costs.”

Annual report 2025A · The company itself

“Our licensing, compliance and advocacy initiatives in foreign countries primarily enable the provision of enterprise (i.e., large business) services globally and wireless services in Mexico.”

Annual report 2025A · The company itself

“In addition, we are exposed to, among other factors, fluctuations in currency values, changes in relationships between U.S. and foreign governments, war or other hostilities, and other regulations that may materially affect our earnings.”

Annual report 2025A · The company itself

“These suppliers could fail to provide equipment on a timely or cost-effective basis, or fail to meet our performance expectations, for a number of reasons, including difficulties in obtaining export licenses for certain technologies, inflationary pressures, inability to secure component parts, general business disruption, natural disasters, safety issues, economic and political instability, including the outbreak of war and other hostilities, and public health emergencies.”

Annual report 2025A · The company itself

“As a critical infrastructure service provider, we believe that we are a particularly attractive target for such cyberattacks, including from nation states and highly sophisticated, state-sponsored, or otherwise well-funded actors, and we experience heightened risk from time to time as a result of geopolitical events.”

Annual report 2025A · The company itself

“Cyberattacks against us and our suppliers and vendors have occurred in the past, including from highly sophisticated, state-sponsored actors as noted above, and will continue to occur in the future and are increasing in frequency, scope and potential harm over time. For example, in July 2024, we disclosed a cybersecurity incident on Item 1.05 of Form 8-K relating to the copying of mobile customer call data.”

Annual report 2025A · The company itself

“Our business operations could be subject to interruption by equipment or network failures caused by human error, system failures, unauthorized access to our network and critical infrastructure, power outages, terrorist or other hostile acts, including acts of war, and natural disasters, such as flooding, hurricanes and forest fires. Such events could cause significant damage to the infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers, as well as significant recovery time and expenditures to resume operations.”

Annual report 2025A · The company itself

“This deployment and other network service enhancements and product launches may not occur as scheduled or at the cost expected due to many factors, including unexpected inflation, delays in determining equipment and wireless handset operating standards, supplier delays, software issues, increases in network and handset component costs, regulatory permitting delays for tower sites or enhancements, or labor-related delays.”

Annual report 2025A · The company itself

“Postpaid churn and postpaid phone churn were higher in 2025, partially driven by an increase in our customer base that reached the end of device financing periods, which normalized in the second half of 2025.”

Annual report 2025A · The company itself

“Operations and support expenses increased in 2025, primarily due to higher sales volumes, which drove higher equipment, advertising, selling and bad debt expenses.”

Annual report 2025A · The company itself

“2026 Expense Trends During 2026, we expect expense trends consistent with the prior year, and that we will continue to focus on efficiency, led by our cost transformation initiative. We expect the spending required to support growth and efficiency initiatives, primarily our continued deployment of fiber and 5G, to pressure expense trends in 2026.”

Annual report 2025A · The company itself

“In recent years, the costs of these inputs and the costs of labor necessary to develop, deploy and maintain our networks and our products and services have increased.”

Annual report 2025A · The company itself

“Our reputation and brand image could be negatively affected by a number of factors, including the safety, quality or reliability of our services, products and operations; cybersecurity incidents and data breaches, including our actual or perceived responses thereto; regulatory compliance; governance issues; our actual or perceived position or lack of position on social and other sensitive matters; and the conduct of our employees and former employees.”

Annual report 2025A · The company itself

“Cyberattacks impacting our networks, systems or data or those of our suppliers or vendors may have a material adverse effect on our operations or results of operations. Cyberattacks – including through the use of malware, computer viruses, distributed denial of services attacks, ransomware attacks, credential harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems or accessing our data and those of our suppliers, vendors and other service providers – could have a material adverse effect on our operations or results of operations.”

Annual report 2025A · The company itself

“AT&T processes and handles personal data of its customers and subscribers, employees of its enterprise customers and its employees.”

Annual report 2025A · The company itself

“Cyberattacks have caused, and may in the future cause, equipment or network failures, copying or loss of information, including sensitive personal information of customers or employees or proprietary information, as well as disruptions to our or our customers’, suppliers’ or vendors’ operations, which have and in the future could result in significant expenses, potential investigations and legal liability, a loss of current or future customers and reputational damage.”

Annual report 2025A · The company itself

“Cyberattacks against us and our suppliers and vendors have occurred in the past, including from highly sophisticated, state-sponsored actors as noted above, and will continue to occur in the future and are increasing in frequency, scope and potential harm over time. For example, in July 2024, we disclosed a cybersecurity incident on Item 1.05 of Form 8-K relating to the copying of mobile customer call data.”

Annual report 2025A · The company itself

“Infrastructure Investment On November 15, 2021, the Infrastructure Investment and Jobs Act (IIJA) was signed into law. The legislation appropriates $65,000 to support broadband deployment and adoption. The National Telecommunications and Information Agency (NTIA) is responsible for distributing more than $48,000 of this funding, including $42,500 in state grants for broadband deployment projects in unserved and underserved areas through the Broadband, Equity, Access and Deployment (BEAD) Programs.”

Annual report 2025A · The company itself

“Dollars in millions except per share amounts materials used in the production of these devices and network components, severe weather, energy costs, currency fluctuations, supplier capacities, governmental actions, import and export requirements (including tariffs), and other factors beyond our control.”

Annual report 2025A · The company itself

“Inflationary and supply pressures may continue into the future and could have an adverse impact on our ability to source materials.”

Annual report 2025A · The company itself

“This deployment and other network service enhancements and product launches may not occur as scheduled or at the cost expected due to many factors, including unexpected inflation, delays in determining equipment and wireless handset operating standards, supplier delays, software issues, increases in network and handset component costs, regulatory permitting delays for tower sites or enhancements, or labor-related delays.”

Annual report 2025A · The company itself

“In recent years, uncertainty surrounding global growth rates, inflation and the interest rate environment produced volatility in the credit, currency and equity markets.”

Annual report 2025A · The company itself

“While we believe such decisions were prudent and necessary to take advantage of both growth opportunities and respond to industry developments, we did experience credit rating downgrades from historical levels. Banks and potential purchasers of our publicly traded debt may decide that these strategic decisions and similar actions we may take in the future, as well as expected trends in the industry, will continue to increase the risk of investing in our debt and may demand a higher rate of interest, impose restrictive covenants or otherwise limit the amount of potential borrowing.”

Annual report 2025A · The company itself

“In recent years, the discount rates have been increasingly volatile, and on average have been lower than in historical periods. Lower discount rates used to measure our pension and postretirement plans result in higher obligations.”

Annual report 2025A · The company itself

“The potential physical effects of extreme weather events and other potential effects of climate change, such as increased frequency and severity of storms, floods, fires, freezing conditions, sea-level rise and other climate-related events, could damage our networks and cause disruptions in our services, which could adversely affect our operations, infrastructure and financial results. Operational impacts resulting from the potential physical effects of climate change, such as damage to our network infrastructure, could result in increased costs and loss of revenue.”

Annual report 2025A · The company itself

“Our business operations could be subject to interruption by equipment or network failures caused by human error, system failures, unauthorized access to our network and critical infrastructure, power outages, terrorist or other hostile acts, including acts of war, and natural disasters, such as flooding, hurricanes and forest fires. Such events could cause significant damage to the infrastructure upon which our business operations rely, resulting in degradation or disruption of service to our customers, as well as significant recovery time and expenditures to resume operations.”

Annual report 2025A · The company itself

“Our subsidiaries providing wired services are subject to significant federal and state regulation, while many of our competitors are not.”

Annual report 2025A · The company itself

“We may be required to answer complaints alleging that the company has violated the FCC rules, and those complaints may seek relief, including changes to our business practices or civil forfeitures that could result in significant costs or reputational harm.”

Annual report 2025A · The company itself

“Adverse regulations and rulings by the courts, the FCC or states relating to broadband and wireless deployment could impede our ability to manage our networks and recover costs and lessen incentives to invest in our networks. The continuing growth of IP-based services, especially when accessed by wireless devices, has created or potentially could create conflicting regulation between the FCC and various state and local authorities, which may involve lengthy litigation to resolve and may result in outcomes unfavorable to us.”

Annual report 2025A · The company itself

“On November 15, 2023, the FCC adopted rules to “facilitate” equal access to broadband and prevent digital discrimination in broadband access. The rules, which became effective March 22, 2024, prohibit covered entities from implementing policies or practices not justified by genuine issues of technical or economic feasibility, that differentially impact consumers’ access to broadband internet access service based on prohibited characteristics (including income level, race and ethnicity) or that have such differential impact, whether intentional or not.”

Annual report 2025A · The company itself

“Public health crises and resulting mitigation measures have in the past, and may in the future, cause a negative effect on our operating results. These effects include, but are not limited to, closure of retail stores; impact on our customers’ ability to pay for our products and services; reduction in international roaming revenue; and reduced staffing levels in call centers and field operations.”

Annual report 2025A · The company itself

“These suppliers could fail to provide equipment on a timely or cost-effective basis, or fail to meet our performance expectations, for a number of reasons, including difficulties in obtaining export licenses for certain technologies, inflationary pressures, inability to secure component parts, general business disruption, natural disasters, safety issues, economic and political instability, including the outbreak of war and other hostilities, and public health emergencies.”

Annual report 2025A · The company itself

“AI-related laws and regulations continue to remain uncertain and may vary from jurisdiction to jurisdiction.”

Annual report 2025A · The company itself

“Wireless Industry-wide network densification and 5G technology expansion efforts, which are needed to satisfy extensive demand for video and internet access, will involve significant deployment of “small cell” equipment. This increases the importance of local permitting processes that allow for the placement of small cell equipment in the public right-of-way on reasonable timelines and terms.”

Annual report 2025A · The company itself

“Cash Provided by Operating Activities During 2025, cash provided by operating activities was $40,284, compared to $38,771 in 2024, driven by operational growth and lower cash tax payments.”

Annual report 2025A · The company itself

“In addition, we are exposed to, among other factors, fluctuations in currency values, changes in relationships between U.S. and foreign governments, war or other hostilities, and other regulations that may materially affect our earnings.”

Annual report 2025A · The company itself

“Legacy voice and data service revenues decreased in 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.”

Annual report 2025A · The company itself

“In recent years, uncertainty surrounding global growth rates, inflation and the interest rate environment produced volatility in the credit, currency and equity markets.”

Annual report 2025A · The company itself

“Enactment of new privacy laws and regulations could, among other things, adversely affect our ability to collect data and offer targeted advertisements or result in additional costs of compliance or litigation.”

Annual report 2025A · The company itself

“In 2015, the FCC reclassified such services as telecommunications services subject to broader regulation by the FCC and imposed “net neutrality rules.” Since then, the FCC has twice reversed course, most recently again reclassifying such services as telecommunications services subject to broader regulation by the FCC in an order adopted on April 25, 2024.”

Annual report 2025A · The company itself

“Operations and support expenses increased in 2025, driven by increased sales volume, resulting in higher equipment, selling and bad debt expense, partially offset by favorable impact of foreign exchange.”

Annual report 2025A · The company itself

“Legacy voice and data service revenues decreased in 2025, reflecting the continued decline in demand for these services in favor of other technologies, such as wireless and fiber services.”

Annual report 2025A · The company itself

“(See Note 22) Cash Used in Investing Activities During 2025, cash used in investing activities totaled $18,777, consisting primarily of $20,842 (including interest during construction) for capital expenditures.”

Annual report 2025A · The company itself

“We have international operations, particularly in Mexico, and other countries worldwide where we need to comply with a wide variety of complex local laws, regulations and treaties, and are subject to evolving political environments.”

Annual report 2025A · The company itself

“Postpaid 914 601 311 52.1 % 93.2 % Prepaid 244 823 459 (70.4) 79.3 Reseller (54) (164) (57) 67.1 — Mexico Wireless Net Additions 1,104 1,260 713 (12.4) % 76.7 % Service revenues increased in 2025, reflecting growth in subscribers and ARPU, partially offset by unfavorable foreign exchange impacts.”

Annual report 2025A · The company itself

“Our Mexico operating income margin was 3.3% in 2025, 0.9% in 2024 and (3.6)% in 2023.”

Annual report 2025A · The company itself

“At December 31, 2025, we provided LTE coverage to over 104 million people in Mexico.”

Annual report 2025A · The company itself

“During 2025, investing activities also included $148 of FirstNet sustainability receipts net of investment and $620 for our investment in a new strategic partner, DriveNets, related to wireline network transformation accounted for under the equity method of accounting.”

Annual report 2025A · The company itself

“We provide integrated services to diverse groups of customers in the United States. on a converged telecommunications network utilizing different technological platforms.”

Annual report 2025A · The company itself