AT&T Inc. · NYSE:T
AT&T — Investor Day (December 2024)
81 slides from AT&T's investor day presentation, December 2024
Slide 1: Welcome to Analyst Day
(UM AT Welcome to l 81 STAD
Slide 2: Cautionary Language Concerning Forward-looking Statements
Cautionary Language Concerning Forward-looking Statements Information set forth in this presentation contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results might differ materially. A discussion of factors that may affect futu
Slide 3: Agenda
Our future: the best connectivity provider in America John Stankey | CEO Execution: our path forward Jeff McElfresh | COO Mass Markets: leading in convergence and Mobility Jenifer Robertson | EVP & GM Agenda Business Solutions: positioning for long-term growth Melissa Arnoldi | EVP & GM Transformati
Slide 4: Our future: The best connectivity provider in America
Our future: The best connectivity provider in America
Slide 5: Repositioned AT&T for sustained and durable growth
From 2020 to 2024 Repositioned AT&T for sustained and durable growth Increased investment Strengthened our Continued providing an in 5G and fiber balance sheet attractive dividend ~$140B in Capital Investment* Divested non-core assets Returned ~45% of Free Cash & spectrum Flow* to shareholders sin
Slide 6: Investing efficiently in 5G yielded improved and durable returns
Investing efficiently in 5G yielded improved and durable returns Approximately 10M postpaid phone net additions since mid-2020 71 7 70 67 64 63 63 2018 2019 2020 2021 2022 2023 2024 Postpaid Phone Base (Ms) 2024 based on 3Q24 year-to-date results. Postpaid phone base reflects migrations and adjustme
Slide 7: Mobility service revenues growth since 2020
Investing efficiently in 5G yielded improved and durable returns Grew annual Mobility Service Revenues by $9B+ since 2020 ~$65 $63 $60 $58 $54 $55 $56 2018 2019 2020 2021 2022 2023 2024 Mobility Service Revenues ($Bs) 2024 annual amount based on Company's expectation of achieving Mobility Service Re
Slide 8: Industry-leading postpaid phone churn
Investing efficiently in 5G yielded improved and durable returns Achieved industry-leading postpaid phone churn 0.89% 0.84% 0.86% 0.80% 0.78% AT&T 0.58% 2Q20 2Q21 2Q22 2Q23 2Q24 Figures presented for 2024 represent 3Q24 results
Slide 9: Mobility EBITDA margin expansion
Investing efficiently in 5G yielded improved and durable returns Expanded Mobility EBITDA Margin* 420 bps over past two years 240 bps 180 bps -130bps -310 bps 3Q21 3Q21 TTM 3Q22 3Q22 TTM 3Q23 3Q23 TTM 3Q24 3Q24 TTM Mobility EBITDA Margin* – YOY Growth (calculated on a trailing twelve-month basis) Se
Slide 10: Growing a durable business through investing in Fiber
Growing a durable business through investing in Fiber Expanded fiber Doubled AT&T Fiber Nearly doubled locations by subs since mid-2020 Consumer fiber ~11M since 2020 revenues since 2021 ~29 9.0 $11.0 $9.0 $3.9 18 4.3 $7.1 $3.6 2020 2024 2Q20 3Q24 3Q21 TTM 3Q24 TTM Fiber locations passed AT&T Fiber
Slide 11: Consumer Wireline EBITDA growth turned positive in 2022
Growing a durable business through investing in Fiber Consumer Wireline EBITDA* growth turned positive in 2022 10% 0% 2020 2021 2022 2023 2024 -10% -20% EBITDA* YOY Growth See non-GAAP reconciliation and notes at the end of presentation for discussion of recasts of historical business unit results i
Slide 12: Repositioning AT&T for durable growth
Repositioning AT&T for durable growth Strengthened balance sheet and reduced debt Increased investment in 5G and Fiber Grew 5G and Fiber subscribers Grew Mobility and Consumer Wireline Service Revenues and EBITDA* Stabilize and reposition Business Solutions* Transition from legacy copper
Slide 13: Building the largest, highest capacity converged broadband network in the U.S.
AT&T is building the largest, highest capacity, lowest marginal cost converged broadband network in the U.S.
Slide 14: Demand for connectivity is growing
Demand for connectivity is growing Average monthly usage per subscriber +60% >80% from 2020 from 2024 Broadband +70% from 2020 Wireless 2020 2024 2029
Slide 15: Fiber is the superior broadband technology
Fiber is the superior broadband technology FWA SATELLITE CABLE FIBER 20-100 Mbps <300 Mbps 1-10 Gbps 20 Gbps DOCSIS 4.0 0.02-0.1 <0.03 0.03-6 20+ Transport shared shared shared dedicated Transport Latency 10-30ms 20-50ms <10ms <10ms Latency
Slide 16: Consumers prefer converged offers
Consumers prefer converged offers, and more AT&T Fiber households are choosing AT&T Mobility 39.7% 38.3% % AT&T Fiber subscribers with AT&T Mobility1 36.6% 35.4% 9.0 8.0 6.9 5.7 Total AT&T Fiber subscribers in millions 2.5 3.1 3.6 AT&T Fiber subscribers 2.0 with AT&T Mobility1 in millions 3Q21 3Q22
Slide 17: Leading in access to customer endpoints drives scale and value
Leading in access to customer Consumers Businesses endpoints drives scale and value Fiber locations 50M+ Reaches hundreds of millions of 5G Mid-band 300M+ POPs Reach endpoints across businesses 2029 and consumers Terrestrial coverage ~3M square miles Satellite coverage Near nationwide Captures sizab
Slide 18: Network evolution: fiber, 5G and legacy transition
2020 2029 18M Fiber locations 50M+ Fiber locations 2029 300M+ 4G LTE 300M+ 5G Mid–band POPs covered POPs covered & near–nationwide coverage with satellite Proprietary Open Network elements Modern, flexible and largest wireless network Legacy Network Transition from copper 5G Wireless Coverage Expans
Slide 19: Expected enhanced returns to shareholders 2025 to 2027
AT&T expects this plan to deliver significant enhanced returns to shareholders from 2025 to 2027 $22B 3% or better $18B+ Annual Capital Annual Adjusted Free Cash Flow* Investment* range EBITDA* growth in 2027 Adjusted EPS* growth rate accelerating to double digits in 2027 (excluding DIRECTV)
Slide 20: Capital Allocation return priorities
~$10B Incremental Financial Flexibility* Capital Allocation $20B Share $50B+ Financial return priorities (2025 to 2027) Repurchases Capacity* $20B+ Dividends
Slide 21: AT&T's vision: best connectivity provider in America
AT&T’s vision is to be the best connectivity provider in America.
Slide 22: Execution: Our path forward
Execution: Our path forward
Slide 23: Grow customer relationships with 5G and Fiber
Grow customer Position Exit legacy relationships with Business copper 5G and Fiber Solutions* services for growth Modernize and Extend converged transform broadband technology network
Slide 24: Solidifying position as largest converged network operator
AT&T will solidify its position as the nation’s largest converged network operator Fiber expansion with Wireless RAN Sustained Capital attractive economics modernization Investment*
Slide 25: Expand reach to 50M+ total Fiber locations
Expand reach to 50M+ total Fiber locations 5M+ Served through By end of 2029 Gigapower & commercial open- access relationships ~29M ~15M Passed locations by end of 2029 ~45M AT&T owned 50M+ Total Fiber Passed locations locations by end of 2024 & operated locations
Slide 26: Fiber cost buckets
Fiber cost buckets Build Connect Maintain < 2% ~25% 35% Cost per passing Customer Lower cost increased per self-install rate vs copper 1 year 1 1 Last two years
Slide 27: AT&T continues to exceed Fiber business plan
AT&T continues to exceed Fiber business plan Faster Higher Lower Greater penetration ARPU churn convergence ~850 bps higher ~500 bps higher ~25+ bps 500+ bps higher 12-month penetration speed tier mix improvement Mobility attach Accelerated Fiber return business case by 2 years
Slide 28: Key benefits of Wireless RAN modernization
• - Key benefits of Wireless RAN modernization
Slide 29: Key benefits of Wireless RAN modernization
Key benefits of Wireless RAN Modernize More open Unlock product modernization almost every architecture development cell site & network monetization • 300M+ 5G mid-band • 70% of 5G network • Consistent API structure POPs covered by traffic on open hardware • Faster cycle times end of 2026 by end of
Slide 30: Executing within a sustained annual Capital Investment
Executing within a Fiber sustained annual expansion Capital Investment* Fiber build, Wireless RAN Lower vendor of $22B install, and maintain cost modernization capital declines financing payments (2025 to 2027) improvements in 2026 in 2025
Slide 31: Mass Markets: Leading in Fiber & 5G
Mass Markets: Leading in Fiber & 5G
Slide 32: Growing with the best broadband product
Growing with the best Sustaining momentum in broadband product Mobility nationwide
Slide 33: AT&T Fiber performance
AT&T Fiber performance1 ~20% ~2X ~25% ARPU Fiber Revenue growth subscribers CAGR 1ARPU growth = 3Q24 vs. 3Q21; Subscribers = 3Q24 vs. 3Q20, Revenue CAGR = 3Q24 TTM vs. 3Q21 TTM*
Slide 34: Best Fiber Provider
Best Fiber Provider 2024 American Customer Satisfaction Index Industry- ~20 bps churn leading NPS & improvement for 3+ years since 3Q21
Slide 35: Achieve significant, long-term subscriber growth
Achieve significant, long-term 50% Long-term 2X Increase subscriber AT&T Fiber penetration AT&T Fiber subscribers growth 35
Slide 36: Converged households in AT&T Fiber footprint
~4 out of 10 500+ bps converged postpaid phone share households 1 above national average in AT&T Fiber footprint 1Defined as Fiber households that have AT&T Consumer postpaid phone service
Slide 37: Converged customers have higher NPS and lower churn
Converged customers… bps …have higher NPS Lower postpaid Increase in phone churn in …stay with us longer wireless NPS fiber markets1 …and longer bps Lower fiber churn in converged households 1As compared to postpaid phone churn in areas where we do not offer broadband.
Slide 38: Converged customers unlock new benefits
Converged customers… Unlock new 15%+ benefits from enhanced Enjoy increase in more voice lines products and per account lifetime experiences Choose value faster speed tiers Prefer auto bill pay
Slide 39: Achieve significant, long-term subscriber growth
Achieve significant, long-term subscriber growth 50% 2X 50% 2X+ Long-term Increase Long-term Converged AT&T Fiber AT&T Fiber convergence subscribers penetration subscribers rate
Slide 40: Nationwide Mobility
Nationwide Mobility Consistent customer-centric approach Consistent Network Product go-to-market investment innovation Best deals for Wireless network everyone modernization
Slide 41: Consumer Mass Markets long-term goals
Consumer Mass Sustain 2X+ Momentum in Markets will… nationwide Mobility business More than double our converged 2X customers over long term Double our AT&T Fiber customers over long term
Slide 42: Business Solutions: Positioning for long-term growth
Business Solutions: Positioning for long-term growth For more information on Business Solutions, see notes at end of the presentation.
Slide 43: Industry dynamics reaffirm the Business Solutions strategy
Accelerating industry State of the Business dynamics reaffirm the Business Solutions Roadmap and repositioning strategy for growth A look under the hood For more information on Business Solutions, see notes at end of the presentation.
Slide 44: AT&T Business Solutions customers
AT&T ~2.5M Customers #1 Fiber share in footprint In First Responder market Business Solutions* #2 6.4M Nearly ALL FirstNet connections Fortune 1000 Mobility share
Slide 45: Repositioning to meet advanced connectivity needs of businesses
Repositioning to meet the advanced connectivity needs of businesses
Slide 46: Best in class converged connectivity
5G Fiber Business grade Penetration < 30% Dedicated network Opportunity in Best in class for FirstNet Small Business converged connectivity Internet Air Converged Nationwide 1st Integrated gateway Built for Business Increase Converged customers by 50%
Slide 47: Business Solutions service revenue mix transformation
Transformation of revenue mix from Legacy & Transitional to 5G and Fiber Business Solutions* 56% 40% 25% Service 32% Revenue 18% 25% 60% 75% 44% 43% 35% 26% 2021 2024 2027 Mobility services Fiber & Other Advanced Connectivity Services Legacy Voice & Other Transitional Services For more information o
Slide 48: FirstNet makes public safety's mission the priority
With FirstNet, AT&T makes public safety’s mission the priority AT&T’s Network Disaster Recovery program rapidly deployed portable assets to restore connectivity
Slide 49: Transformation: Leading the transition from legacy copper
Transformation: Leading the transition from legacy copper to next generation networks
Slide 50: Legacy services today
Not meeting Two wireline customer needs networks Fiber NPS 5x higher 500K square miles Legacy services today Low customer demand Inefficient & costly Less than 5% active users
Slide 51: Expect to exit copper-based services in most of territory by 2029
Products for transition Expect to no longer provide copper-based Strategy for copper exit services in the majority of our territory by 2029 1 Impact on AT&T 1Pending regulatory and contractual obligations and excludes California.
Slide 52: Delivering on customer expectations
Delivering on customer expectations AT&T Fiber AT&T AT&T Phone – Legacy with faster, more Internet Air Advanced Emulation reliable services Strong migration success
Slide 53: AT&T's wireline footprint, EOY 2024
AT&T’s wireline footprint, EOY 2024 88M 67M ~29M 4.6K Total locations Internet eligible locations Fiber passed locations Wire centers
Slide 54: Milestone achieved: legacy footprint reduced
50% Milestone 250K Legacy regulated Square miles services footprint reduced achieved reduced
Slide 55: Path to transitioning customers from copper: Wireless First areas
Wireless First areas Our path to transitioning ~10% of population customers from copper ~50% of land area 2027 Exit Legacy Services 1 1Pending regulatory and contractual obligations and excludes California.
Slide 56: Path to transitioning customers from copper: Fiber First areas
Fiber First areas Our path to transitioning ~90% of population customers from copper ~50% of land area 2029 Exit Legacy Services1 1Pending regulatory and contractual obligations and excludes California.
Slide 57: Defined regulatory path
Defined regulatory path • Modernized state-level regulations in 20 of 21 states • Achieved FCC precedent to stop new orders in select areas • Launched AT&T Phone – Advanced as adequate replacement for traditional landline service (POTS) • Setting path to complete migration for all copper customers
Slide 58: Enabling margin accretion with geographic exit of copper
Direct Geographic Enabling margin $6B focused costs customer costs • Installation • Customer care 40% 60% • Power • Maintenance accretion with Legacy annual expense1 • Real estate geographic exit of copper 1Does not include capital expenditures or Legacy IT system costs. Represents estimated full ye
Slide 59: AT&T is leading the industry in defining the copper exit
Delivering products that better meet customer needs AT&T is leading the industry in defining Scaling the regulatory path the copper exit Executing a geographic exit to preserve margin
Slide 60: Technology & network strategy
Technology & network strategy
Slide 61: Technology and network strategy
Technology and network strategy focused on enabling new products and revenue, driving cost savings & simplifying IT systems Network Application Adoption simplification consolidation of GenAI enables digital transformation creates pathways to realize and software enables and desired customer our full
Slide 62: Moving from proprietary wireline hardware to traditional computing
Moving from proprietary wireline From: Multiple networks hardware to traditional with distinct equipment $ Copper computing reduces cost & increases $ Fiber product innovation $ Enterprise ~4,600 central offices $ Wireless
Slide 63: Single converged network reduces delivery cost
Moving from proprietary wireline hardware to traditional computing reduces From: Multiple networks To: Single intelligent cost & increases with distinct equipment $ Copper converged network product innovation $ Fiber 70% $ Enterprise reduction ~4,600 central offices $ Wireless in delivery cost per t
Slide 64: Collapsing Mobility cores onto public cloud
Similarly, collapsing Mobility cores and leveraging public cloud computing & tools From: Multiple Mobility To: Single public cloud reduces cost and increases cores with distinct 5G core managing all innovation functions eligible functions 50% reduction IoT Enterprise in delivery cost per gigabyte AT
Slide 65: Software-based wireline & wireless network
Human-assist Digital Retail Call center Online Indirect Collapsing our consumer Single sales, billing, ordering & provisioning platform platforms coupled with software-based network infrastructure enables rapid Network & Product APIs product development at lower cost AT&T Turbo Branded Fiber Dynamic
Slide 66: AT&T is not new to AI
1955 1980s-90s 01 “Artificial Intelligence” term 03 Neural Network 05 first coined, AT&T, IBM, foundational work on Conv. Harvard, Dartmouth Neural Nets, AT&T AT&T is not Applied AI/ML new to AI… 1950 1970s 2000s Shannon, AT&T Bell Labs “Programming a 02 Unix, C, C++, and Statistical Programming 04
Slide 67: Harness the transformative power of GenAI
Host & control your own data Harness the transformative power Be an expert in Understand model of GenAI to realize our embedding & accuracy & scoring model tuning full potential across every business segment, technology and product Let the LLMs All telcos will have AI – & models Build a competency,
Slide 68: How do we measure success in AI & GenAI?
How do we measure success as practitioners of AI & GenAI? Lifetime Value ARPU Penetration NPS Convergence
Slide 69: Financial outlook: Driving sustainable growth & returns
Financial outlook: Driving sustainable growth & returns
Slide 70: Optimizing returns through an investment-led strategy
Optimizing returns through an investment-led strategy Revenues, Optimizing Dividends Earnings & Free Cash Flow* + & Share = Shareholder Repurchases Returns growth
Slide 71: Putting the customer at the center of everything we do
Putting the customer +10M Industry- leading Postpaid phone net adds Postpaid phone churn at the center of (2Q20 to 3Q24) (13 of last 15 quarters through 3Q24) everything we do ~11M ~5M Fiber locations added Fiber subscriber net adds (2020 to 2024) (3Q20 to 3Q24)
Slide 72: Foundational execution
Invested for sustainable growth ~$25B Foundational Net Debt* reduction $100B+ execution Capital Investment* $7B+ (2020 to 3Q24) Cost transformation run-rate savings ~$40B Spectrum & Strengthened related investments the balance sheet
Slide 73: 2024 Financial guidance
MOBILITY SERVICE 3% range REVENUE GROWTH BROADBAND 7%+ REVENUE GROWTH 2024 Financial ADJUSTED EBITDA* GROWTH 3% range guidance CAPITAL INVESTMENT* High-end of $21B to $22B range $17B to $18B range FREE CASH FLOW* $15B range (ex. DIRECTV) $2.20 to $2.25 range ADJUSTED EPS* $1.90 to $1.95 range (ex. D
Slide 74: 2025 to 2027 Financial guidance
TOTAL SERVICE REVENUE GROWTH Low-single-digit range annually Mobility Service Revenue 2% to 3% range annually Consumer Fiber Revenue Mid-teens annually ADJUSTED EBITDA* GROWTH 3% or better annually Mobility* 3% to 4% range annually 2025 to 2027 Consumer Wireline* Grow at a double-digit CAGR Business
Slide 75: Capital allocation return priorities
~$10B Incremental Financial Flexibility* Capital allocation $20B Share $50B+ Financial return priorities (2025 to 2027) Repurchases Capacity* $20B+ Dividends
Slide 76: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes Capital investment includes capital expenditures and cash paid for vendor financing. Capital investment provides a comprehensive view of cash used to invest in our networks, product developments and support systems. In connection with capital improvements, we have favorab
Slide 77: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes • For 2022, free cash flow of $14.1 billion is cash from operating activities of $35.8 billion, plus cash distributions from DIRECTV classified as investing activities of $2.6 billion, minus capital expenditures of $19.6 billion and cash paid for vendor financing of $4.7
Slide 78: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes • For Mobility, EBITDA margin growth is presented to illustrate improvements in profitability resulting from our 5G network investments and related customer growth. This non-GAAP financial metric is presented on a trailing twelve-month (TTM) basis through 3Q24, as that is
Slide 79: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes EBITDA and adjusted EBITDA are non-GAAP financial measures that are frequently used by investors and credit rating agencies to provide relevant and useful information. EBITDA on a consolidated basis is net income plus income tax, interest, and depreciation and amortizatio
Slide 80: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes Adjusted EPS is calculated by excluding from operating revenues, operating expenses, other income (expenses) and income tax expense, certain significant items that are non-operational or non-recurring in nature, including dispositions and merger integration and transactio
Slide 81: Non-GAAP Measures and Notes
Non-GAAP Measures and Notes AT&T Fiber revenue compound annual growth rate is presented on a trailing twelve-month (TTM) basis through 3Q24, as that is the latest reported period, and is not a substitute for annual financial performance. Fiber revenue in Consumer Wireline for 3Q24 TTM of $7.1 billio