T - Earnings call 3 2023

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Operator

Thank you for standing by. Welcome to AT&T's Third Quarter 2023 Earnings Call. [Operator Instructions] And as a reminder, this conference is being recorded. I would like to turn the conference call over to our host, Mr. Amir Rozwadowski, Senior Vice President of Finance and Investor Relations. ahead. go Please

Amir Rozwadowski

good call. and for Welcome our to Thank Amir morning, Rozwadowski, quarter I'm Relations Head third you, everyone. of AT&T. Investor

our our on are me call CEO; Stankey, and Joining Pascal CFO. the Desroches, John today

Before comments our says harbor to your safe be may I forward-looking. we of statement. our need begin, some call attention to that today It

As may differ Results AT&T's SEC such, they're filings. subject to risks and uncertainties described in materially.

materials, are available the Additional including website. our earnings information, Investor on Relations

John? call the over turn I'll Stankey. John that, With to

John Stankey

Amir, customer everyone. this us. we which Thanks, morning, At the and XG today articulated sets working in our results and joining in latest profitable Strong good appreciate you up strategy manner. help we in and I represent plan fiber investment start continued for growth. year, our is would grow us and share sustainable of a deliberate proof base a profitable the that our

best-in-class not delivering durable fiber data conviction We're and solutions. these adjusted XG in bring rising The cash continuing guidance returns. attractive tracking targets. or base today. is we're more This financial only customer we're to results demand strengthen meeting seeing our our expanding but with only Americans. full our to line free to invest technologies meet to in beat our raising And EBITDA consolidated next-generation and year even We're flow also

and in industry, business manner that a our in doing progressively been the AT&T Our grow has the asset and goal base invest to exactly differentiates we're that.

approach subscribers. wireless, continues expand high-value of our to In consistent our go-to-market base

deal resonate that continues customers. show to best our approach everyone results Our for with

consistent competing device to our straightforward the the This value our as had subsidies quality as preorders lower-value is a in of our the saw of proposition and we September, promotions the trade-ins. example, For network. iPhone strongest simplicity and of allowing we've many higher despite well strength with offers testament both years in

with and us is tale Customers The with more of are clear. spending staying us. longer the tape

low consistent improving churn, we're value our Why? Because at more look a providing returns. and increasing take Just ARPUs customers. to

people of not our value signing promo plans for For up our it's requirement. though taking are promotions iPhone a example, majority the highest vast even

In is fastest our unlimited highest our fact, growing value plan plan.

network addition, wireless better and in and in we expand North continue size the as business quality high-value of never It's enhance revenues record. and our highest per terms its on that grow our to you we In network by reliable EBITDA network. our to combine customer continue most wireless the no rising been has surprise largest as America XG when ever user, profits in growth evidenced our nation's

The on Where by we fiber. planet, share. to story share same. and best remains Turning the we the broadband undisputed win the our position, brand solution gaining broadband our fiber, win. by improving improving build mobile delivering We

net backdrop XXX,XXX delivered quarter muted a household Our high-quality adds against We move nearly strategy of working. just activity. is this

In continued initial from our improve addition, exceeding markets. returns the on expectations our to penetration assumptions. our new for fiber in investment We're

surge ARPU in year-over-year. growth. mix accretive nearly further than a fiber is Look our plans the how no fiber broadband up fiber driven shift Additionally, higher-value X% fueling has to revenue

provider. fiber, as one delivering all on Consumer to Wireline levers We is superior business put drive strong, has the we a the declining that growth. we're room improve preferred that transformed matter to margin offer from has scale. product a that performance No where consistent we broadband

product. yet this as selectively our fixed wireless service another we connectivity view Internet AT&T We tool toolbox. in our August, In launched Air,

in overall of the reception net added into with subscribers primarily broadband will XX,XXX positive targeted we've positive as the a subscribers already pleased have territory product, it growth about XX,XXX been back and early pushing act quarter. While catch us for

a fiber. Where tick only long-term in from of we're seeing benefits in the the XG deployed very inevitable reaping convergence growth. of we're the Mobility and Meanwhile, fiber, stages early we've

AT&T and lifetime values service Additionally, lowest to and highest our have the match. with customers fiber wireless [indiscernible]

well And the costs, at networks, lowest As to wireless fiber and we're to establishing positioned do that both runway be want. sustainable importantly, consumers economic scaling provider the the positioned the a unit of player for this returns. one we're long ubiquitous choice connectivity for

As we capabilities, to evolution with for powering is we're experiences everywhere the connected working advance built and our go. the world on example our those live in. work next for the we now collaboration network Cisco high-speed One deliver

[ that of XG, for into this connectivity tapping ] phones, and By what's We to feel beginning fast mobile the possible. just speeds extended strongly is web capabilities of calling we the latency simplifying a low seamlessly mobile workforce.

customer At XXX the core the in basis saw we're business. operating compared we third to improvement point the across XXXX. This EBITDA our efficiently time more adjusted that a of also of quarter margin component reinvigorating same growth, are we is

ago. to incremental You plan can goal. see over on we of period year $X.X operations benefits from cash also billion this of incremental our We're X a strong the billion to same savings confident off we're start our X our generate the execute quarters in to a as compared ability achieve of cost to and $X the first next within plus years, the

evolution executing drive and efficiencies as needs. meets longer legacy We're sunset we infrastructure legacy our XG scale expect no wireline as fiber significant networks. time, transformation this we Over to customers' we our our that operating

on work important organizational the eliminate and utilize footprint our that operating and redundancies and XG further work. environment improve our steps to mirror our enablers focus collaboration, innovative technologies streamlining to fully These we aligning fiber. how improve also are We're

we're AI-driven made software unlocking been productivity while generative savings. has customer the design network cost already in effectiveness. And progress Measurable lowering improving support our very tangible and efficiencies costs, in with early of development stages and still AI, we're improvements seeing

to achieve key capabilities cost a in our play expect We savings to efforts these future continued objectives. role our

are Less final work. our and on improving billion achieve and to our quarter, once continue us our the additional target. allows to more EBITDA that's of AT&T's leverage net long-term priority, to by investing than first debt-to-adjusted This durable track debt takes deliver X.Xx reach net in ability to our third we're enhance we how us businesses net we $X and target our by the half connectivity shareholder XXXX. operating the In putting reduced debt to returns

remains for capital long-term Our allocating growth and experiences deliver to shareholders. value profitable customers, steady best-in-class sustainable, create on for drive focus

the pool few last our years, and our Over from broadband. financial investment-led delivered both has to strategy and customer benefits Mobility and returns high-value tangible growing in

or and year. that million-plus by mid-band pass on fiber on our network nationwide to XX service our provide or opportunities of XXXX. to serve locations with with funding XX We're we're reach million able million of track more additional through expanded end spectrum network venture XXX our by the We opportunities. to joint have XG people now the We've locations the BlackRock about BEAD end are on XG also track with fiber to GigaPower

attractive XG Given our At leaning economic in to makes business improve. the profile committed its credit same the consistently dividend and returns the sense. of expect payout to continue fiber strategic time, we're into return believe to level quality seeing, we and remain we

generation annualized In exponentially. we've and fourth has fact, is broadband which better already cash even highest our enough grown our than generally quarter, to faster connectivity Demand cash for quarter. dividend generated the before more meet

It's we're as and largest With fiber never provider, business customers' continue the nation's stronger clear America networks, fundamentals in been fiber with grow our our largest stronger. and as wireless have scale network our services connected best-in-class the the XG providing only that They'll simplify Internet North to lives of and our engagement we demand. meet deepen to them.

it Pascal. turn Pascal? I'll that, to over With

Pascal Desroches

John. Good everyone. morning, you, Thank

favorable on and trend returns and XG see driving great our We're out as in subscribers, we're As businesses ARPUs our John broadband, in and margins costs. discussed, taking wireless can you fiber X. investments, and we're Slide broadband wireless The continue. and both growing on

is gives today. guidance detail this us raise on. strategy discuss and Our working later will I in to more confidence

Consolidated third Now offset on financial third an were X% wireline. largely let's quarter service partially decline revenues. in the were fiber growth in X. These by expected wireless in to increases quarter move by driven business up revenues summary our and Slide

offset was This growth an was partially up Wireline. and expected quarter Adjusted for EBITDA Mexico. Consumer X.X% decrease Mobility, Business in with the in by Wireline

savings, versus In X% fact, by grow better of plus. X% EBITDA increased growth we in expect to guidance our and cost overachievement prior than now adjusted our due to revenue

in was This we expected. quarter. effective rate higher EPS income, about EPS aggregated $X.XX lower tax headwinds noncash of to of the year-ago capitalized from equity $X.XX interest, DIRECTV includes which Adjusted compared credits, lower $X.XX and pension lower all

$X.X Cash year-to-date billion $XX.X disbursements, This and from by including of higher driven maintenance. device the revenue costs operating primarily quarter in billion an growth activities was receipts and to is increase due billion lower personnel and $XX.X year-to-date.

about cash of year-to-date $XXX impact about underlying business. as at growth saw and in strength flow we cash time year-to-date. taxes our higher the of the receivable organic comes shows a of This This occurring billion of $X sales the lower year-over-year million net same

continued This Capital investment of was reflects investments in historically quarter. XG and $X.X fiber. high billion in the levels

expect We exit capital past we as move investment the to year. levels elevated

free feel billion flow also a $X.X our flow $XX.X the period quarters, billion, versus We're free the tracking really cash $XX.X now flow for about X $X.X billion free same first to of about Through in good cash We billion quarter. the year year. up cash was full the ago.

to Mobility results turn on let's our slide. Now next the

up are revenues results, X%, Revenues our Mobility at service our income driven at Total subscriber growth were unit and about wireless were business. service operating up were XXX,XXX. feel business phone highs. ARPU. and adds continue net grown in Looking were good revenues our of postpaid really postpaid by Year-to-date, wireless and to largest X.X%, gains higher These revenues performance we and X.X%. phone have the all-time

the higher mix $XX.XX, consumer a X.X% higher and improvement of Mobility rate plans ARPU are phone margin year-over-year. higher The roaming shift in primary continued up $X.XX on ARPU drivers plans, up continued in legacy ARPUs with EBITDA quarter. international was postpaid to growth value trends. Mobility was

additions remains substantially customers. shows quarter. is had XX,XXX churn X.XX% continued phone X.XX% net proposition prepaid, Postpaid with of churn wireless This low for In value with we phone the with resonating our total lower. [indiscernible] churn at low churn

slide wireline next the results. our in to move Let's

in investment and consistency shine appeal net XXX,XXX fiber continues of returns. Wireline fiber to for driving Consumer XX is fiber's growth quarter. more Our The we've added than strong as now XXX,XXX fiber We customers quarters. straight added the adds

growth tiers, receive fiber highlights choosing Customers X%. broadband and growth. of drove also was revenue This We've recent superior increasingly measurable experience fiber. $XX.XX, revenues despite seen ARPU pricing about Strong year-over-year total supporting actions. XX% Fiber in speed churn up the XX% are is up consistently year-over-year. faster improvement also which fiber that customers with nearly about product ARPU

revenue Consumer grew Wireline growth. of fiber X.X% the EBITDA strength on

better-than-expected to revenue the we've expect the achieved revenue this broadband deliver for year, we now growth X%-plus broadband year. so Given far

Additionally, our to a AT&T Internet start. solid off Air product is

sunset to our we're a continue as new to expand our we strong copper serve service services. select legacy catch will markets, As as product it confident we

Business to Overall, $XXX as was year-over-year. Turning products. Wireline offering move Wireline. remains products to Business transition next-generation legacy in we million EBITDA down from connectivity

step of benefiting from to devices. growth If you you of increasing accounts. when picture revenue looks postpaid a up business subscribers franchise same very different back, X%, business our somewhat strategic overall and take connected was service wireless include wireless Wireless importance the the continued in these

transition consume since EVs our the bandwidth. As continues, to expect in tailwind consistent we from a cars vehicles more success data electric connected

businesses. Connectivity year-to-date, year-to-date solutions slightly same in to we in fiber underlying the business of growth more to single year-over-year year. as solutions the digits with declines expect offsetting also for down are double-digit Business make is wireline. end Wireline EBITDA the in with it the wireless At And EBITDA, see and we low now see declines available full medium-sized as is day, the growing high trends for momentum we due small- largely we total

quickly an to the we're progress on the sheet. Now before like of I provide making flexibility improving I'd update balance on close, our

our As year. a debt achieve the of reduction net we're generation, track target on strong result our for to cash

management In to fourth we we the discussed expect incrementally liability do direct quarter, addition obligations to third in quarter. to quarter, in have the also short-term debt reduced last so continue reduction vendor our financing supplier and and we and

reminder, headwind these is flows. a free a of the pay to As down obligations cash

year. interest high that pleased doing really help a cash our Therefore, in free environment, I'm contain which targets flow liabilities will interest initial cash costs. these while still rate reducing are the We our for exceeding this we're

lowering XXXX. addition, obligations financing ratable quarterly enable in cadence should free our flow In more a cash our of

due towers a next as and our with in are As near-term we few come we for about mature feel expect years, on the address hand. we solid to maturities position debt cash they think

earn enviable cash billion more of able had on equivalents In position We find more hand than end of being the to high of $X rate long-term in than at the and deposits interest-bearing of ourselves cost the the this environment, on we this debt. our quarter. cash

financial important of and advantageous our XX% a at our to in and cost more average that we maturity ensures I've position rate to The with weighted also of of of outlined remember an debt long-term average than flexibility fixed financial our remain XX structure is is capital. It X.X% years. improves an respect

Our reducing it and expectations that only further our flow for growing debt free comes cash as due position. improve

To not year. achieved our this be emphasize could close, I'd team to with has just like what happier

We are with as our our largely very results pleased operating expectations. are business our fundamentals exceeding

As John we to that. articulate we're customers grow and on mentioned, expected which manner, track in deliver the a we plan profitable to just in

That concludes my remarks this morning.

up Amir? it to open hand for over to Amir it me Let Q&A.

Amir Rozwadowski

first Thank question. take you very we'll much, Pascal. the Operator,

Operator

Sachs. will Our first the from question Goldman Instructions] line [Operator Brett of of come Feldman

Brett Feldman

mind. don't you if Two,

of where starting which to there's to launch on we Internet curious markets how in-region And the I product first you was your where what insights are the identify out whether The makes also sense is, Air, opportunities reconsider conditions drives to maybe it's demo it and whether early deciding could of resonating. get region? of the your that same uptake I'm you're one hoping

with And why adjusted your I'm conjunction Pascal. increase then you not your just EPS the year guidance did question for for EBITDA curious guidance? a in

John Stankey

Nothing's approach changed Internet to in Air. our

I'm the used we question, start within going think with and product I'd forward. business articulate moving second how your exactly of see our part I the being to

a bit there different. region Air application Internet in really before they're don't attractive to product I although little segment. need. It's there's issue into we the for meets selling particular really a just a thing on said necessarily a the So do. number of It's a product as no business out that fronts us helpful I distinguish region, different of of have is that

for with or that incremental a top what makes broadband of serving that and product say, with on the household is higher pay usage you the ARPU people streaming can it them of in that's take a other services day X different in, I've you characteristics their them segment to that have shared the all allows long. consumer businesses that profitability given than video a layer and higher

to opportunities find do And continue so we will to that.

region We have where some of we're underpenetrated. markets out

a it look that. network have that We makes sense lot selectively that to do opportunities capacity we can use. do of where at valve We'll to

lot where you I our in wouldn't with the been first. energy. of We driver we've and that's time tell customers start dominant and region putting a

them We us. on services have infrastructure infrastructure been going that's be that going order existing short on of in we customers lot in longstanding loyal possibly with and be the replacing a than have us, Internet can that fiber. to to from with bundled service fairly better is give They've place we're generally been Air we that a could buying

case, as service move may into a apply that so to customer. holding in places infrastructure, to allowing that. It product, in better allows And infrastructure a a we becomes they're customer with costs pull strategy, we down experience that a high-value the out because network our shutting and us where in ultimately tool it do and shut and us of to process our need to hold

pretty the how product use our And And EPS we And the can really use on view careful, Pascal I and it. so point target I a touch to which basis. on we'll very simple it, that's is said, in changed on as But surgical a think hasn't of aggregate. it intend issue, explanation.

Pascal Desroches

Brett, say. would here's I what

couldn't range, First gave when EPS And happier $X.XX range. pretty much this. remember, read guidance, with the we into gave we the and a a performance of overall broad don't foremost, too We be company.

to towards of end we that say I upper the are range. think fair tracking it's

capitalized in variability more things pensions. like But interest, noncash there's

feel overall really but question on just all about good we in part, of our it's a So really business. all, the performance the

Operator

Stanley. question the line Our Morgan Simon from will next of come of Flannery

Simon Flannery

Great. more I higher-end of a aggregate into the little impressive. X% growth. fiber growth and ARPU is broadband bit us that this wonder what's much kind how if further growth the of And could just continue? we understand tiers? very can help take-up the the That you Can these and dig

see DIRECTV around you little your a how about time. how about talk perhaps bit strategic evolving various then over are and And options thinking And you that that?

John Stankey

made give driven if tell I be to is by Simon, the able end migration into I'll exact plans is up been growth where moving we've I want. will you our what with largely adjustments of that don't the we've speed managing ARPU number that's stuff some customers are But helped. in you the continuum. pricing the know low the Plus, you being at base higher of embedded some

than in tell to is migrate know, a bottom little as are we've from putting the the spread you I up large, a it choosing on spread by today, got had the to a speed. run top on and be you for of that used way we're And that networks. base customer on But tighter you to we're would deploying customers aggregate. So as because, there's long build, minimum X-gig new to

lot do go we've product a of into or adjust decide and they moving so to X-gig maybe needs to got ultimately to X.X- a they customers that when that. and of up migration a have X-gig a as their want product room And lot their from

tend with I discount, which relative average on to in at where price we're bit you bit look sell would selling to now. you tell a per we're the So of when at right others industry, also okay we a

the to lot together a without move margin putting approach. of to it's strategies we before at some bundling And this we any it help to and into us get I've that's the in taking opportunity and -- that us think about a products as think faster it. why erosion to the strategy as flexibility I us decent way think gives going want penetration do we how also forward outlined juncture those we allows pretty we moving

So we've I lot feel good really of a headroom. that got

expense I scaling. we think equation, are still would also point I of that on the the out side

see it quite each a but not lot optimal of that building, happening scale in at You quarter. metropolitan these getting we're We're we're areas better, yet.

down as that We forward, And acquisition when a take workforce where that that. of that, cost in ongoing of numbers do and down we cost passed take our we kind which per move sure structure. fill That's build result get as of is in maintenance down in our focused cost. costs. an sizing to we cost we We and homes footprints in take optimal per is per our is make in

should margin a that you driving So about the the also effective us from understand ARPU cost up. efficient It's just we operate getting also and perspective, line of how accretion not business. on that more it's about

DTV, incredibly on very was the they're generate. is On that to doing. The what business team generating cash It's well. we're designed running focused the our partnership

what The plan is what basically has years for expected been we the first we've in not but only to X track outperformed we expected. that

with We're very how years. we is business that of set been the satisfied of focus focused that up. I over management with couple is extremely the think the They're executing how trajectory in We're good. on next it's has really their team plan mature the operating. very mission satisfied the what

we to My point the of continue view run set is up. we play

now, fine, But focused our along we'd operating made business. examine else Something team came management right the on is that sense, it.

Simon Flannery

Great. Any the BEAD update on process?

John Stankey

actively. bit further would process, a than other country. and couple say we've in of states the a in wheels working the ahead not little than government It's been there's I are states slowly, the really. Other the that of turn

submit applied, how to of they're applications, file If getting their evaluated. the to are call how as that bellwether, occur the of the regs to areas be from them where exposing you sense process are be they're needs bids couple it's and the the a ready about in want to clarification to bellwether

are clarification state the getting now. in clarification And fourth think of allow the underway. bit federal less I to that's And be third, process the hopefully That more industry, between the and the broadly of to maybe will the is be some second, move more the that respond states and right where government that their forth back and little queue is a action little that are bit applications. in I of the a and issues a little application resolved, these precise forward. road suspect there'll once That

infrastructure not financial plan. As I've I'm impact before, that on builds that monies paying are there's BEAD supported XXXX optimistic said the that customers

XXXX-plus and not that I portions might the when aggregate thing to at ultimately, this buying comes been that network the private start that you look services think buying services is of capital kind build, before. going on come be the of have customers in a and the

Operator

from line John of Our Hodulik will of next come question the UBS.

John Hodulik

could. I if Two,

market? from MVNOs. Churn flat sequentially First I you was about cable are despite the and down seasonality lot on through of what John, annually. the concern to wireless. in competitive seeing just just, what's continues typical a mean, and come happening Obviously, other

maybe So you're that that continue? typically will and see the strength there, just trends that XQ suggest seeing in does we subs

one I if then may, cash more, flow. And on the free

flow to tell out anything drive would -- DIRECTV versus cash the not for CapEx? versus great. guidance that can cap, be can or you level tax us or about 'XX, point, at levels EBITDA tell you year free 'XX parts but these Looking payments us the next anything Or working even like piece this looking will about

John Stankey

next guess. We'll texture on Pascal year, but for on kidding, John. free cash I'm a I I'd be give give have flow it, happy non-answer a just little guidance to you

at little our we look, one particular we quarter side, quarter had articulated that the second were pointed a or the an the where occurred. back On market, what that when to had, call momentum talked anomaly. last in drove bit we wireless of specifically in I about some last on We had year think churn account we

our market that normalized tale I of the And in and our quarter normalized expected look to a quarter here there's you momentum about we pretty tape that we We the performance. believe you felt third good our can indicated see in that third a in performance. at

position the position. think can into our I of Nobody out the interested I'm of because of of share share a as I think else that's has way market, our preferred growing of ratable more to we And our in about is customers. back this best that opposed in actually share reported. of But glean actually revenues are just kind what the we're mechanisms a number from raw

think that of industry we customers. continue and focused We're of doing rate job bringing we're accretive share as than highly I as bringing see our on in revenues to we're that actual I good share improve industry at counts, anybody. me our profitable and customers a those And the on which subscriber a of customers, better tells think the in right the

I we're would you happy numbers, churn very They're tell very the very They're them. you with as indicated, strong. solid.

being or MVNOs what's our incredibly despite cable, So is by reported base stable.

the can you that's ultimately side numbers. happening And on our see net what's road driving

about aggregate, okay if that you think stable, if ARPUs growing is we're with growing going what's If our back and I on. churn look, step and accretive and customers I'm if think we're in

that's think a I good formula.

We of And we expected what we set of happen. resources we're when see the on up the staffing I in of market, to the think supplies that approach get quarter, terms about We're plan kind and have. levels, our positioning our we right in optimistic quarter. we're where fourth think to ready about well

think product. We a product is relevant the

environment going to that's So what no the is, category. see I don't impact the anything matter necessarily economic

on. very giving to category it's needs for and popular I think a go what gift

Pascal, you do some strong a on have to fourth expect give that the want cash and right So now. flow? I we see would we quarter industry, I free typically in like changing have texture don't seasonal

Pascal Desroches

earnings keep to mind. things We've in a We're franchise that John, to said this build Sure confident to both XXXX. producing in the to be are able all is and in trying cash. that sustainable growth here We're thing. we're do going along.

to earnings, about keep piece think you here are mind. when parts So in the

grow expect to Mobility business fiber growth to broadband continue drive business. in as continue our to nicely as very well We our

couple efforts Our efficient that a years cost to creating shown the committed really takeout we structure. have are cost of last

those And going and EBITDA elevated couple 'XX those to drivers that all are will CapEx in from at been flow in next things down to drive So help levels year. growth be you growth. the growth step with a cash free 'XX, we've drive big the

would mind expected, we that the than But of job consistent many contributions team with that that, managing of doing in the that that, to decline and Offsetting anticipate decline is say probably resilient would secular keep is business. along -- DIRECTV -- have probably more an DIRECTV incredible I asset.

like to are also bonus expect well, going with depreciation, pay we're interest And of next the incentives the more we Those parts. taxes piece phaseout limitations, the big tax year. then XXXX

Operator

Our next question will Phil line come of from JPMorgan. of Cusick the

Philip Cusick

quarter, vendor under my luck, for actually category you've in are CapEx on last few of year. the been Maybe lower trending things had the the it's down pushing years, The CapEx, fourth and maybe comments are going get reason to or is $XX looking in a be to slow high that more. some this quarter for fourth a bounce billion big the Should we little for to at point? that

John Stankey

mirror think year guidance year said was CapEx if we to for push for we going luck, what last think your guidance had that year. our still gave the to our last year. disappointed to our that kind that's mirror to of you Phil, going going did is you be try we I'd the but I I And Yes, didn't what CapEx be

So bit a that to around something out. number that, we little goal and reflects things to some ratable operate construct several more think, should that meaning that to for very hard the quarters you're something do get see smooth the telling to been working business, the in expect we you going delivers we've been our is how you, we fourth neighborhood a similar year. quarter did I've of last in I what

better. We're be where to need not we're in quite we that getting regard but yet,

things you earlier, doing extensively start seasonality think progressively and to getting we're based careful the we're our working capital need that comments you see kinds be if So all at on I job adjust right leaning bit. and gave we're on seasonality because things, which may managing think I better of and you our we the those doing little right to a

Philip Cusick

can, I If more. one

you doing is finding out side, terms On steadily cable, anything pull the how Or given low Are different doing of of shaking of customers the in business just sort away? to the working? are this environment? fiber customers you move

John Stankey

is, getting better what the constantly a I'll constantly and I that We're And say your that we're We props the markets. and the really share. maybe tactics approach and it's effort, I operating question. take I -- reframe -- how our team these we for frankly, team our -- would build, evolving does we're this does team that occurs marketing in to think

way up than to having the so to digging -- yard, better front no There's sell speak. product somebody's

build it. our then So it awareness, excitement job that awareness around and to builds is capitalize and on

done overall an job end what's led the tactics And around our exceptional happen, sensitivity penetration. we And huge of driver rates that's does investment, been financial months XX making successful front it's And really the double rates what we've been continue levels, that. doing to penetration and a faster in you at that of fine-tune we've historic amazing the of it's to that. over and what at can pay effectively. first that had if performance the And back

our I market, markets share, now to you in tactics level, pan on a we're kind color which more do a hit at question, we that getting level XX% think where more give your XX% the we're as switch. XX% little penetration and of

that. level, as little we do more XX% hit bit tactics around how And to a go markets we set have different so the of to

And lever I in more the contact use to into differently especially in terms think, household, data those strengths we in result how use how as of of the frankly, that. what into channels target, how they in shift customers effective region, where an value instances, we to bundling distribution way, drive are many a our we use we those play

set from of start doing say a and to of we good different at of that. that kind we in XX, XX, have us pretty would as hit I particular those mature. So to plays get when we're And use markets then fine-tuned we really X a playbooks set they

And see I and customers, spend and really way. the at right that doing is. The that's they're in handle nicely their it those feel team right business on way good. unseat has so the you the to money that time it the right We scaling that, why

Philip Cusick

point? that Since you XX-month what mentioned it, is at penetration first this

John Stankey

question. next so -- The

Operator

of Rollins the come Citi. Our next from Michael question of will line

Michael Rollins

if could, well. I as Two,

the it's go the the the upgrade you lower this financials? And could wireless rate, behind how impacting First, even future? discuss factors could in device slowing

just then rate run X could the to X savings you on over if the potential for cost-cutting the update And is years? targets? size where next AT&T And additional secondly, an on

John Stankey

Sure, Michael.

tell would current really has Whether is, don't we or rate in that over anything think slows it the what its see say. to you changed what I dramatically in So I device hard rate. not

dramatically And environment, kind we're if pick it's a would that's a view the what economic going and environment say it and your the more it is higher the to the I to upgrade of I and stressed what right slows If healthy stays as there's works then bit. think change. don't economic correlation to happens maybe robust of now, rate. probably at along bias where does,

a generation little been and think seeing to generation a my in of couple change of change less. The calls, other doesn't devices, mentioned I what I've things. in we've bit from this it general frankly, is before view. point

that bands speed -- the hardware. can't they in and I and hanging good It's the harder aren't that for in cameras all really so several evolution device of really spectrum years. them, a functionality differentiation a good on modems. because really mean, handle customers such use And I uptick to my there's device on there's dramatic say they're necessarily have to good get

result body, last the they're a case are people dropping commercial responsible Two, that a is them. people I And the of care think protecting them of bit longer. as less, that, devices, better they industry for and taking little human or

successful that sell to that than a the that replacement that take a Because terms out device a insurance, You on extend the worked have potentially customers selling prone at tends fact add the device, for bit. customers. customer our of has more to agreement base. are very we're within insurance new we into that to works and rather it swap they cycle and us, out life well for well And out to the

it of expensive more cycle reason, for bit more consumers of devices it. squeeze a that And try and whatever are a there's more expensive, I as rational keep any animals. get to are a you look, you And occurring. expensive bit other getting longer, expensive more And thing, little think oftentimes, like out little they

down I of [indiscernible] cycle explainable. forward. but it we seeing. And as that's seeing or of flattens think kind drive of and what alter why pretty point way we're I out kind going we're it its continues don't the Whether to think be to So view it's to seen, it's you of substantially for remains looking our views at move we're

the X we right? inflationary on $X in did rate environment. that we billion run look, an is over asked rate cost the And years, did On cutting run you that about,

$X actually to would get really about was given able really over say, of the done. wanted it's when So We've what X it what through you to XXX% do were years. we I billion more next like, you think we work and

we that an of That is took year. course accrual this set through the saw up quarter. accrual You next

you of to I think want that a go, that should these probably to think there's we if accrual understand you costs correlation expect to some how about.

but obviously of this feathering we think it. indication next of the That's not months. in of about it, over portion you it's of a all It XX some give the would how course

to billing say, I remarks, many some underway. right ago really and good opening I where in investing the with we mentioned your we as we've indicated would things have or distribution my now and It's we're quarters in of you are we And feel out that detailed a infrastructure. in of technology momentum time been change to -- I different system about carefully And information have you every our It deal work a painful. requires customer your CRM a lot been very, It's very work. channels. you base system.

where kind more turn the those on That different of scale wireless that is fact we're up a to us getting the activity some of coupled business. We're platforms. our structure now to fiber giving starting the with is built and point in on cost

We're as products years. doing going going over to we've make we sure and forward. billion part us And to we X $X the We're geographic shutdown. being That's to business what migration what in the that legacy that effectively continue been curve. new footprint the the moving continue to of next have I about achieve feel that able streamline good to for ride really

Operator

our line MoffettNathanson. come of next the will from of Moffett question And Craig

Craig Moffett

of the you of terms try what discussing just what quarter. things were the you're and about and upgrade to just sense in topic stay the fourth rates that with seeing a margins launch in want iPhone new might I to and get mean for

And earlier could, BEAD then second a if just just clarify your on program. the to I question, remarks

would competitive some be sounds ramp that, a to for of supplement a some now what XXXX, up overbuilds? are degree, to it As overbuild? be, fiber they you substitute would as be does likely to competitive would your expect that that thought more builds in of currently Or

John Stankey

opening best made industry, I a -- this preorder what tell that's that I my in I've rate to we've unique AT&T in comments period was had we is I cycle to you, of some Craig, not long time. would or know. So a seen probably that or unique remarks don't whether in And the the

that to bit have will you I our the heard what know don't in at going report last we is upgrade quarters, what tell but this higher others have I was I a guidance rate than be, seen what going several juncture. is not anything and with you on pattern, I given out call our inconsistent margins what be wasn't the it's year but of to performing. where the would for with expect inconsistent business we that we've for guidance the it their

on articulated business, still our we we we be very within would going the is EBITDA margins all see we check operating to relative in have revenue So much to where service think going in growth, performance the that are what you everything to there. guide on what

on think it say What I depend. is I would will BEAD

but cases, lot in there's depend of on And and contribution be incremental. state, some can there be think located the particular a a geographically of could nature cases, substitute some where will it's build, some our I there is I some it. it where the in what instances relative a think in in

our passed. doesn't I in It the we've would guided terms is -- change anything now to a the I of change good you give for 'XX. hate so in of homes It for answer, committed And doesn't you what for doesn't soft we're it but building such 'XX news fiber to toward commitment anything 'XX. total in number you we've change

it some like to seeing going be terms and to won't find some that's know horizon or levels incremental we'll, to something that does be that the what next we sub our XX-month you're not after we if course, count opportunities If over of But investment some, anything changes. win until year, to make go going in levels, that. we of

Operator

Bank Our of come of question of next from the David will Barden America. line

David Barden

the kind the AT&T? the early they something now you of and see little were presence a sector has big as of realities out that how XXXX, pricing being economy. represent you a bit here into the and kind part could on for from industry's a lever, perspective, move story of the gravity is come that of and opine has lever short- the the pricing of from medium-term part you But cable price a maybe in given growth calling you John, the AT&T to to that the guys enjoyed to reflect growth had pricing look inflation in ahead

also new maybe of come based on the out. kind question, agree kind MPRM with second any we new FCC disagree -- or see with just obviously, you topic? then net be there would neutrality incrementally of wondering on Wheeler could, in anything there's saw through that what if And if this that I'm I went you we

John Stankey

me just to aren't Really fire trying you? up,

David Barden

to going the you get morning, Got in John.

John Stankey

guess. I

pricing Here's I kind how of view issue. the

the First incredible of an has in all, industry invested level.

look, the was possible. It's record for investment If level industry. wireless you a last entirely year kind of

close year going entirely know It's yet, this trends possible that pretty be are don't on. but Obviously, look at well. I as to could that

to a they're on return the putting these sure massive that, to the that experience. make that that's rational not desire investments driving on industry And networks these value that there's surprise it's a a performance like out incredible they're so when the getting into making are is investment consumer in a me levels and everybody and up

to value equation And with that in I and reliability, the in And industry I so I happening. back exchange as little that it be reasonable more speed, players step the that, market, bit. say, are understanding what a customers with perfectly capability going getting adjusted general is see value other and more that from greater on that, that needs see

quarters lot it see I of a of lot ways. in different different And in happening a

manifests And sometimes, more giving there's more capacity amount of an out more free exchange it for itself -- value because incremental people for there in a giving hotspots things, money.

of they're Sometimes it's how are little it. bit hit looking paying need at of as those much much a they're at ratio the result how maybe to be to using that a

lot are the way. a it in of utility can market things things as like industry, has see direction. of I I effective my at and rational those view, But regard. And shown that that And headed that in do fairly a mature, point use, think continues to look the moves satisfaction from and and the all in I customer right

numbers, really and being So my that and look are regard. done look it's And way. I in at my -- really, really a smart We're churn I'm numbers, to I going my in fairly I churn conclude that pleased at know good. numbers

of a think if And we I I segment and time. that of strategically base, so think they and to to which experienced is navigate this that in over it places They're it's particular subscription Cable the do done is the market me, are attack. want running attacking at look that managing we've play and they're you're plenty a like there running.

kind leader sustainable that variable I've or cost structure. use I'm and a you're before, structurally. of a price I And said as think a the when low don't term things strategy person in a market be on it's long to cost

lumpy repricing. at case. on. the But that that's goes this a And so in there's that, bit ultimately, We It's there's a repricing industry. little ultimately, know some times

that you product. your shouldn't just really the evolution you right I on job want the for that's that for as to that And stay equation, accretive, work that the a through customers if pricing doing those regard. And fine looking ones long the the profitable get And haul, focused understand we're to you our customers, of growth, us. bring why adjusting in and the that think value play we're on with have value you problem is

both traffic it infrastructures scalable your the through the where to best work on during crazy and of video massive that home, days shifted massive wireless we the the workplaces we amounts shifted to world residential And second dwellings. regions So and question, most home the broadband from of States coming networks and to from demonstrated and we core other of suburban at had were the business. in the of at and relocated doing amounts one the on urban remarkably pandemic world, United silly And things, performed well.

good record indicative, in that's in infrastructure. infrastructure investment a and just has coming year think, driving I sound this been And of off investment policy wireless very I country. said, what We're, in as

Infrastructure I've States the look more incenting at you now If never there the a going side. that -- and builds underserved. not that of fiber, Act, seen We is underserved, just in the right had into are amount with capital Bipartisan fiber passed there Bipartisan infrastructure private the it for United affordability around the that's on money the component and but Infrastructure only Act dealt builds

to the that is important the And I government putting probably while is $XXX that, think will match of about capital what's $XX private for understand tune up most billion billion, $XX billion. to

investment have unconnected to of going solve problem. and billion could You $XXX in the underserved

in the no on. more There's indications ISP There's every in there's that choice segment, broadband day the industry. discrimination going any

are platform throttling business. contrary are what in there no blocking, some operate paid industry out how some apps in see on supports that we to of have to We no an choosing aggregate their do that prioritization, that with those going they things no

The are in complaining is, the about customers that think, last on going customers front. concerned, no of ISP what's I industry

and spectrum chase bipartisan when for those problem make a doesn't competitive So places economic money we that is that the broken service we services that reauthorize and United an that fact we like process issues and of do capital bipartisan so taxpayer is use sustainable. a universal growing afford we issues, we would do have pace keep issue innovation, me, resources how unnecessary States a mystery their a and it's have is to why exist and what policy to deal with political for partisan chasing potential China environment bit we important how authority with the sure to that great spectrum can so like a have can't the

to bipartisan issue are dealt be that and solved. need with These

should where their regulators I think time. be spending that's

having the Now clear. that, think said facts are I pretty

will We demonstrate process markets fact, this operating. the with in data in FCC to the going are the bring is, to going that participate bear. to all this constructively. We're We're how

ultimately and on policy and it, rational that Hopefully, get there's with a reasonable reasonable results that, set consistent to it of that, understand we a that in reality good see individuals outcome that. that, take reading decide policy,

haven't case. given up that hope that, could I And the be

ensure as up is However, taking public markets, to as do and just you, do a approach Internet regulation we supports. if a need the the government record do of and law against I working XXXXs record applying that's influence what what the to in we company, fine and heavy-handed will will it everything reflects that tell we a something the to the to early what the allows using end it regulator

it So this at on I that's where kind of juncture. add

Operator

of Our the last Raymond come question Louthan of line Frank James. from will

Frank Louthan

side, slower decline to products? the or business exiting in or how business of year-over-year low you the versus margin weaker that weighted of can is of sort terms whether On environment characterize much unprofitable --

harder? as And sort contribution, does contribution on far its international levels as secondly, are a get roaming pre-pandemic start that to And then we ARPU? wireless to that where comp when relative on the of little to

John Stankey

here's business wireline most change Frank, is of technology. the the One, how secular of rank call kind in I would will is fixed impact overall the what occurring the that significant business impact. side, I

provision So shift it's use an which And and that that. software. the there's and SDN, toward with effectiveness managed means complex networking bandwidth issue on efficiency comes raw

customer, to technology -- keep a you you a That's our shift may customer, do dollar significant. most shift probably but business that you don't dollar. continue You with for

networks, things on bundle top bring which and oftentimes the engineering our our and sets on other to second distribute managed and layer oftentimes before, of streamlined shifting ability business, highly in complex the a secular accretive together, and led product -- in us approach that to are when core products The with are where inconsistent services more had focused we win that transport provisioning decision of transport which to were exit as and we to this aspects certain is and and part low margin to that sell environment, of transport. that

dynamic demand of second the on layering us The around those I that's away you from dynamic of if relatively occurring tell services. backing business is would small kind is that in what's dynamic the resale happening revenues. our some nonexistent of overall in

point would a specifically, story. demand business fixed I at think we very you there's segment out look business. And aggregate our it's that business still performance, in report different a healthy when on I while

that's So business, of of it on, add were dynamic our the the to kind next a if their flat because technology to the frontier have think processes we're wireless business relatively that's businesses wireless. take you fixed is now of their front component And of you wireless largely and going strategic they and growth in engineer many right understanding I actually now company. end on how and the their

and And And to wireless to I'm of customers, side. growth saw we see going cycle think what actually supported think same just I and pretty emerge a capabilities networks on big start complex capabilities were networks going in managed the thing VPN bullish I growth. managed where that early that's we're be the days the to in on enterprise

can that And fact calling on shift with of and for some have important despite set us presence headwinds secular the we one on the taking the we're large sets we're the customers, really them when technology out services of sell do is in both we the these of we fixed side. and services

can going you thank, largely into tell Amir, maybe since for of closing fallen pieces liberty of I'd that feel to us. said you this joining I quarter take question. for the to if of like would I last place about you the Okay. is first And way I'm this us the today. I all have all,

delivering the is I business we if the right what we company delivering. reported, value across think, deliver. the have that's at look fact, you the type numbers wanted of to and it in and this And the engineer to that formula We board

operating of our how what and is And I focus, in executing is a results business, how the seeing lines approach and think of the the consistency products go-to-market you the making focus of effectively the of number select we're company. that are consistency, on difference business we're the of

of And lot and decisions. get It's not that's easy to I'm off to been one decisions those an drive done shareholder see results it's hard But really a It's tangible to us returns proud trail. this has back into what nice the that had of point. team the been the paying base. hard

And I can promise strong and closing you, year the focused third the the on in all quarter. you're that sustaining momentum seeing we're

you you for thank I very and So good your much a hope have all Halloween. in interest AT&T,

Operator

a today. like participating that service. day. our Thank to today's Ladies Have call. conference for you We'd conclude for gentlemen, earnings call using does and conference you for wonderful our in thank

You may disconnect. now

AT&T (T) 19 Oct 232023 Q3 Earnings call transcript