John Stankey Updates Shareholders at Morgan Stanley Technology, Media & Telecom Conference on March 4

Rhea-AI Summary

AT&T (NYSE:T) has outlined its multi-year strategic growth plan during the Morgan Stanley Technology, Media & Telecom Conference. The company projects $50 billion+ in financial capacity over the next three years, with plans to return $40 billion+ to shareholders through dividends and share repurchases from 2025-2027.

The plan includes maintaining the current $1.11 per share annual dividend, totaling $20 billion+ in dividend payments, and approximately $20 billion in share repurchases. The company's Board has already authorized an initial $10 billion stock repurchase program expected to conclude by 2026, with an additional $10 billion planned for 2027.

AT&T expects to achieve its net leverage target of 2.5x in H1 2025 and forecasts wireless service growth in the higher end of 2-3% range, Mobility EBITDA growth in the higher end of 3-4% range, and consumer fiber broadband revenue growth in mid-teens for 2025.

Positive

• $50B+ financial capacity projected over next 3 years
• $40B+ shareholder returns planned (2025-2027)
• $20B share repurchase program authorized
• Wireless service growth expected at high end of 2-3%
• Mobility EBITDA growth projected at high end of 3-4%
• Consumer fiber broadband revenue growth expected in mid-teens

Negative

• Business Wireline EBITDA expected to decline in mid-teens
• Postpaid phone net additions impacted by normalization and seasonality in January

Insights

Financial Analyst

AT&T's reaffirmation of its guidance and capital return plans provides significant clarity for investors. The company has outlined a robust $50 billion+ financial capacity over the next three years, with $40 billion+ earmarked for shareholder returns - a clear commitment to rewarding investors while maintaining strategic flexibility.

The planned $20 billion in share repurchases (with an initial $10 billion tranche already authorized) represents approximately 10% of AT&T's current market capitalization, which should provide meaningful support for the stock. These repurchases are expected to commence once AT&T reaches its net leverage target in H1 2025.

The decision to maintain the $1.11 per share annual dividend (currently yielding about 4%) while simultaneously pursuing substantial buybacks reflects management's confidence in sustainable free cash flow generation. This balanced capital return approach allows AT&T to reward income-focused investors while also reducing share count to drive EPS accretion.

From an operational perspective, the company's segment guidance shows continued strength in wireless services (2-3% growth) and exceptional momentum in consumer fiber (mid-teens revenue growth), which should offset the anticipated decline in legacy Business Wireline. The company's strategic focus on converged relationships between wireless and fiber customers presents a compelling growth narrative as bundled offerings typically reduce churn and increase customer lifetime value.

While postpaid phone additions faced some pressure in January due to seasonal factors and promotion timing, management's positive commentary on recent customer response to new offers suggests this is likely temporary rather than a fundamental shift in competitive positioning.

Telecommunications Expert

AT&T's multi-year strategy shows a laser focus on building network leadership through targeted investments in its core connectivity businesses. By emphasizing 5G and fiber deployment, the company is positioning itself at the intersection of two critical growth technologies that create sustainable competitive advantages.

The commentary around fiber penetration rates exceeding initial business case assumptions is particularly noteworthy. This indicates AT&T is achieving better-than-expected returns on its fiber investments, which typically represent significant upfront capital expenditures followed by high-margin recurring revenue. The mid-teens projected growth in consumer fiber revenue reflects both the expansion of the footprint and strong adoption within existing service areas.

On the wireless front, AT&T appears to be navigating the industry's transition from subscriber growth to value optimization. The company's projection of wireless service revenue growth in the higher end of 2-3% range, coupled with faster EBITDA growth (3-4% range), suggests improving profitability driven by a focus on high-value customers rather than pursuing growth at any cost.

The ongoing secular decline in legacy Business Wireline (mid-teens EBITDA decline) remains a challenge, but this segment represents a shrinking portion of AT&T's overall business mix as the company pivots toward growth areas. This transition is critical for long-term sustainability as enterprise communications increasingly move to cloud-based and software-defined solutions.

Management's comments about building a network for convergence highlight AT&T's strategic vision of creating integrated connectivity solutions that span fixed and mobile environments. This positions the company well for emerging opportunities in areas like private networks, multi-access edge computing, and IoT applications that require seamless connectivity across different access types.

DALLAS, March 4, 2025 /PRNewswire/ -- Today, AT&T's chairman and chief executive officer participated in a fireside chat where he discussed the Company's multi-year strategic growth plan.

Key Takeaways:

• AT&T is embarking on a multi-year strategic growth plan that centers around putting customers first and continued network investment.
• AT&T continues to make progress on becoming the best connectivity provider in America and remains on track to meet all of the financial and operational guidance shared during its fourth quarter 2024 earnings conference call and its 2024 Analyst & Investor Day.

John Stankey, chairman and chief executive officer, AT&T* Inc. (NYSE:T), spoke today at the Morgan Stanley Technology, Media & Telecom Conference where he provided an update to shareholders.

AT&T remains on track to achieve its 2025 consolidated financial guidance and deliver on its multi-year outlook

AT&T remains on track to meet all of the 2025 and multi-year financial and operational guidance shared during its fourth quarter 2024 earnings conference call and at its 2024 Analyst & Investor Day. As previously disclosed, the Company will report 2025 free cash flow and Adjusted EPS excluding DIRECTV.

AT&T expects its multi-year strategic plan to provide $50 billion+ of financial capacity over the next three years, largely through organic growth. Financial capacity represents anticipated free cash flow after distributions to noncontrolling interests, plus expected cash payments from the announced agreement to sell AT&T's stake in DIRECTV to TPG, as well as net borrowing capacity after the Company achieves its net leverage target.

The Company expects to return $40 billion+ of financial capacity to shareholders through dividends and share repurchases. Under this capital return plan, the Company expects to maintain its current annualized common stock dividend of $1.11 per share. This plan would result in $20 billion+ in total dividend payments, with capacity for about $20 billion in share repurchases, from 2025-2027.

Of the $20 billion share repurchase capacity, AT&T's Board previously authorized an initial tranche of approximately $10 billion in common stock repurchases. Management expects share repurchases under this authorization to commence when the Company reaches its net leverage target range and expects to conclude by the end of 2026. Additionally, the Company expects approximately $10 billion of share repurchases in 2027, pending Board authorization.

The plan also contemplates approximately $10 billion in incremental financial flexibility for items such as potential organic or inorganic strategic growth investments, debt repayment, redemptions of noncontrolling interests, or additional dividends or share repurchases.

The Company continues to expect to achieve its net leverage target of net-debt-to-adjusted EBITDA in the 2.5x range in the first half of 2025 and maintain leverage within this range through 2027.

AT&T remains focused on growing durable converged relationships with high-quality 5G & fiber customers

AT&T's multi-year strategic growth plan will substantially advance its progress on becoming the best connectivity provider in America.

As a result of the investment-led strategy announced at its 2024 Analyst & Investor Day, the Company expects to be in a differentiated position within the connectivity industry by the end of the decade. While building the network of the future, AT&T is increasing its opportunity to serve customers how they want to be served, by one provider in a converged manner.

In Mobility, the Company continues to expect full-year wireless service growth in the higher end of the 2% to 3% range and Mobility EBITDA growth in the higher end of the 3% to 4% range. As previously stated, AT&T's 2025 guidance anticipates a healthy wireless market with further normalization of net adds and overall activity levels. 

Additionally, customers reaching the end of their device promotions returned to a more normalized level on a seasonal basis in the fourth quarter of 2024. Postpaid phone net additions in January were impacted by this normalization, typical seasonality and the timing of promotional offers. The Company is pleased with the customer response to the recent launch of AT&T Guarantee and offers introduced over the past several weeks and expects this solid performance to continue for the remainder of the quarter.

In Consumer Wireline, the Company continues to expect full-year consumer fiber broadband revenue growth in the mid-teens and Consumer Wireline EBITDA growth in the high-single to low-double-digit range. AT&T Fiber penetration rates continue to exceed initial business case assumptions with net adds varying from quarter to quarter based primarily on the pace of new fiber locations passed, seasonality and marketplace dynamics.

In Business Wireline, the Company continues to expect full-year Business Wireline EBITDA to decline in the mid-teens range primarily due to continued industry-wide secular declines in legacy services.

Conference details and more are available on the AT&T Investor Relations website

Full conference details are posted on the AT&T Investor Relations website, including a replay of the webcast. To automatically receive AT&T financial news by email, please subscribe to email alerts.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect future results is contained in AT&T's filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update and revise statements contained in this news release based on new information or otherwise. This news release may contain certain non-GAAP financial measures. Reconciliations between the non-GAAP financial measures and the GAAP financial measures are available on the company's website at investors.att.com.

About AT&T

We help more than 100 million U.S. families, friends and neighbors, plus nearly 2.5 million businesses, connect to greater possibility. From the first phone call 140+ years ago to our 5G wireless and multi-gig internet offerings today, we @ATT innovate to improve lives. For more information about AT&T Inc. (NYSE:T), please visit us at about.att.com. Investors can learn more at investors.att.com.

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SOURCE AT&T

FAQ

How much will AT&T (T) return to shareholders between 2025-2027?

AT&T plans to return over $40 billion to shareholders through $20 billion+ in dividend payments and $20 billion in share repurchases from 2025-2027.

What is AT&T's (T) projected financial capacity for 2025-2027?

AT&T expects to generate over $50 billion in financial capacity over the next three years, primarily through organic growth.

What is AT&T's (T) dividend plan for 2025-2027?

AT&T will maintain its current annual dividend of $1.11 per share, expecting to pay over $20 billion in total dividends during this period.

What are AT&T's (T) growth projections for wireless service and mobility EBITDA in 2025?

AT&T expects wireless service growth in the higher end of 2-3% range and Mobility EBITDA growth in the higher end of 3-4% range.