Overview

AT&T Inc. is a holding company that provides telecommunications and technology services through its subsidiaries and affiliates worldwide. The company has two main reportable segments: Communications and Latin America. The Communications segment, which accounts for around 97% of total operating revenues, provides wireless, business wireline, and consumer wireline services in the United States. The Latin America segment provides wireless services in Mexico.

Financial Performance

In 2024, AT&T’s total operating revenues were $122,336 million, a slight decrease of 0.1% from 2023. This was driven by declines in the Business Wireline and Mobility equipment revenue, partially offset by growth in Mobility service, Consumer Wireline, and Latin America revenues.

Operating income decreased 18.8% to $19,049 million in 2024, primarily due to a $4,422 million non-cash goodwill impairment charge related to the Business Wireline reporting unit. This impairment was driven by a faster-than-anticipated industry-wide secular decline in legacy services. Other factors contributing to the decline in operating income included higher depreciation and amortization expenses and restructuring charges.

Income from continuing operations decreased 21.6% to $12,253 million in 2024. The effective tax rate increased to 26.6% in 2024 from 21.3% in 2023, as the goodwill impairment charge was not deductible for tax purposes.

Segment Performance

The Communications segment saw a 0.3% decrease in operating revenues in 2024, with growth in Mobility and Consumer Wireline offset by declines in Business Wireline. Operating income for the segment decreased 2.5% due to the Business Wireline unit’s performance.

The Mobility business unit, which accounts for the majority of Communications segment revenues, saw a 1.5% increase in operating revenues in 2024. This was driven by 3.5% growth in service revenues, partially offset by a 4.4% decline in equipment revenues. Mobility operating income increased 1.8% in 2024.

The Business Wireline unit experienced a 9.9% decline in operating revenues in 2024, reflecting lower demand for legacy services and the impact of simplifying the product portfolio. This unit reported an operating loss of $88 million in 2024, compared to operating income of $1,289 million in 2023.

The Consumer Wireline unit saw a 3.1% increase in operating revenues in 2024, driven by growth in broadband services, including fiber. Operating income for this unit increased 33.5%.

The Latin America segment, which provides wireless services in Mexico, saw a 7.6% increase in operating revenues in 2024. Operating income for this segment improved to $40 million, compared to a loss of $141 million in 2023.

Strengths and Weaknesses

A key strength of AT&T is its leading position in the U.S. wireless market, with 118 million subscribers at the end of 2024. The company’s investments in 5G network deployment and fiber broadband expansion position it well to meet growing customer demand for high-speed connectivity.

However, the company faces challenges in its Business Wireline unit, which has been impacted by the secular decline in legacy services. The $4,422 million goodwill impairment charge in this unit reflects the need for AT&T to further transform and simplify its operations to adapt to industry changes.

Another potential weakness is the company’s high debt load, with total debt of $123,532 million at the end of 2024. While AT&T has been reducing its debt levels, managing this debt burden will continue to be an area of focus.

Outlook

Looking ahead to 2025, AT&T expects to see revenue growth in its wireless and broadband businesses, driven by continued demand for 5G and fiber services. The company plans to further invest in its fiber and 5G network deployments to support this growth.

However, the company anticipates ongoing pressure on pricing in the competitive wireless and broadband markets. AT&T also expects expenses related to its network transformation and cost-saving initiatives to continue to impact its financial results in 2025.

The regulatory environment remains an area of uncertainty, with potential changes to net neutrality rules and the possibility of additional state-level broadband regulations. AT&T will need to navigate these regulatory challenges while executing on its strategic priorities.

Overall, AT&T faces a mix of opportunities and challenges as it works to transform its business and capitalize on the growing demand for advanced telecommunications services. The company’s ability to successfully execute its strategic initiatives and manage its cost structure will be key to its future performance.