T · Earnings call · 2026Q3T · Full report

Operating Margin Drivers

AT&T INC. · 2026-10-21 · Importance 37 · Surprise 32 · In source text

Third-quarter adjusted EBITDA grew 5.4% year over year and adjusted EBITDA margin reached 38.7%, the highest third-quarter margin since AT&T refocused on advanced connectivity. Equipment revenue grew 12%, which diluted margins, but management said converged-customer growth and transformation efficiencies improved underlying operating leverage. Advanced Connectivity EBITDA increased 7.3%, while Legacy EBITDA declined about 27%. Management expects $4 billion in annual consolidated cost savings by the end of 2028, including savings from copper retirement.

Key facts

• AT&T remains on pace to achieve $4 billion in annual consolidated cost savings by the end of 2028.
• AT&T's Legacy segment EBITDA declined about 27% year over year in Q3 2026.
• AT&T's adjusted EBITDA grew 5.4% year over year in Q3 2026, with an adjusted EBITDA margin of 38.7%.
• AT&T's Q3 2026 equipment revenue grew 12%, which was dilutive to margins.
• AT&T's 38.7% Q3 2026 consolidated adjusted EBITDA margin was its highest third-quarter margin since refocusing on advanced connectivity at the beginning of the decade.

Impact estimates