AT&T is the first of the "Big 3" carriers in the U.S. to tell us how it is doing in 2026
In some ways, AT&T had a pretty strong first quarter helping the stock make a terrific comeback on Wednesday.
AT&T reports Q1 earnings. | Image by PhoneArena
AT&T became the first of the "Big 3" U.S. carriers to report on how it is faring in 2026. This morning, the carrier released its first quarter earnings report and the big news is arguably the most important for the company as it reported a larger than expected 294,000 net new postpaid phone subscribers for the first three months of the year.
AT&T reports an unexpected increase in net new postpaid phone subscribers
The figure reported by the carrier topped Wall Street expectations of a 272,000 increase in the benchmark metric. Net new postpaid phone subscribers is an important number because it reveals whether the carrier is adding or losing postpaid phone subscribers. These customers are the most stable and profitable for a Mobile Network Operator (MNO) like AT&T.
The carrier's churn rate was slightly higher year-over-year
The churn rate is the percentage of a carrier's subscribers who have left to go elsewhere and for the first quarter, AT&T's postpaid phone churn rate was .89%, down sharply from the .98% churn rate for the fourth quarter of 2025. While that is a nice improvement month-over-month, on a year-over-year basis, the postpaid phone churn rate was flat with last year's .87% for Q1 of 2025.
AT&T is beginning to get some traction from customer bundling. 42% of the carrier's home internet customers are also signed up for the company's wireless service.
Average revenue per user declined on an annual basis
In an attempt to move more subscribers to mid-range plans and increase its Average Revenue Per User (ARPU), AT&T hiked pricing for its highest-tiered and lowest-tiered plans. For the opening quarter of 2026, AT&T's postpaid phone ARPU was $55.57. That was down nearly a full dollar from the $56.56 figure released for the same quarter a year ago.
First quarter 2026 results for AT&T's new Advanced Connectivity segment. | Image by AT&T
Revenue for the first quarter rose 3% to $31.5 billion topping estimates that forecast quarterly revenue of $31.25 billion. Earnings per share came in at 57 cents, up 11.8% from the 51 cents per share the carrier earned during the same quarter last year.
AT&T shares made an amazing afternoon comeback on Wednesday
AT&T has reorganized the company allowing it to focus on its major business units. For example, its new advanced connectivity segment covers domestic 5G and fiber services.
Thanks to higher sales of wireless devices (up over 9%), revenue in this segment rose 5% during the first quarter. Sales of wireless services rose 1.7%, and operating income for the quarter jumped by 14.8% to $6.853 billion.
AT&T shares declined this morning along with shares of both T-Mobile and Verizon on the news of a possible merger between T-Mobile and Deutsche Telekom. After trading as low as $24.96, AT&T has rallied back to $25.86 for a loss of 1.5 cents with about an hour left in the trading day. Traders credit the comeback to the success in bundling that the carrier reported.
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