AT&T Reports Multi-Year High Margin Amid Copper Network Phase-Out
In Q2 of 2026, AT&T reported a significant improvement in its financial performance, achieving an adjusted EBITDA margin of 39.1%, up by 110 basis points year-over-year. This increase was driven by operating leverage from investments in 5G and fiber expansion as well as cost reductions due to the phase-out of legacy copper services. AT&T has been shutting down its copper network, particularly in over 30% of wire centers, which is expected to reduce costs significantly. Legacy service revenue dropped 26%, while Advanced Connectivity segment revenue grew by 5.1%. The company aims for $4 billion annual cost savings by the end of 2028. Despite margin improvements and fiber expansion, AT&T's stock has underperformed compared to broader market indices like the S&P 500 over the past year. Management increased its buyback program in response to a valuation gap between fundamentals and current pricing.
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Topics: cost transformation ebitda operating leverage telecom