AT&T Inc.

Good morning and welcome to AT&T's first quarter 2025 earnings call. At this time, all participants are in a listen-only mode. Should you need assistance during the call, please press star then zero and an operator will assist you offline. Following the presentation, the call will be open for questions. If you would like to ask a question, please press star then one and you will be placed in the question queue. If you are in the question queue and would like to withdraw your question, you can do so by pressing star then two. And as a reminder, this conference is being recorded. I would now like to turn the conference call over to our host, Brett Feldman, Senior Vice President, Finance and Investor Relations. Please go ahead.

Thank you, and good morning. Welcome to our first quarter call. I'm Brett Feldman, head of investor relations for AT&T. Joining me on the call today are John Stankey, our chairman and CEO, and Pascal DeRoche, our CFO. Before we begin, I need to call your attention to our safe harbor statement. It says that some of our comments today may be forward-looking. As such, they're subject to risks and uncertainties described in AT&T's SEC filings. Results may differ materially. Additional information, as well as our earnings materials, are available on the Investor Relations website. With that, I will turn the call over to John Stanky. John?

Thanks, Brad. I appreciate everyone joining us this morning, and I'm pleased to share that we followed a strong performance in 2024 with a solid start to 2025. In the first quarter, we reported growth in consolidated service revenue and adjusted EBITDA, driven by strong postpaid phone and fiber net ads. We also grew adjusted EPS and free cash flow when excluding DirecTV, with both metrics performing consistent with the outlook we provided in March. Pascal will run you through the details of our first quarter results and outlook. So I'm going to use my time to cover two topics that are top of mind for our management team. First, I'll review the core operating principles driving our strategy. This includes how our differentiated position as the largest converged provider across 5G and fiber is fueling growth in high-value customer relationships. After that, I'll discuss why we expect to deliver on our 2025 financial guidance, and commence our planned share repurchases during the second quarter, despite operating in a macro environment with diminished visibility. So let's start with the core operating principles that are enabling us to drive our long-term strategy forward. As always, we begin with a focus on the customer. This is why we launched the AT&T Guarantee, which is a promise to our customers that we'll provide them with connectivity they can depend on, the deals they want, and the service they deserved, guaranteed, or we'll make it right. AT&T is the first and only carrier that offers a guarantee for wireless and fiber networks to both consumers and small businesses. A key reason we can make this promise is because of the significant fiber expansion and network modernization investments we're making to be the best connectivity provider in America. A little over three years ago, we set a target of passing over 30 million total locations with our fiber network by the end of 2025. I'm proud to say that we expect to achieve that target before mid-year as we continue to ramp towards our objective of reaching 50 million plus total locations with fiber by 2029 through a combination of our organic build, gigapower, and other commercial open access agreements. We're also making great progress at retiring our legacy copper network as we transition to modern 5G wireless and fiber technology, and we have an opportunity to move even faster following recent FCC orders. We appreciate Chairman Carr and the FCC for their leadership to advance the tech transition and update requirements to better reflect today's technology and competitive marketplace. Our customer-focused, investment-led business model has positioned AT&T as a trusted provider of critical connectivity services. As a result, we're well positioned to drive sustainable growth through a range of market and economic cycles. Our first quarter results present further evidence that our differentiated strategy is working. We came into the year with an expectation that the wireless industry would see further normalization in net ads and overall activity levels. So far, this has played out, and to no surprise, we have seen shifts in offers and promotions as the major providers compete for a moderating pool of new customers. Despite a slow January, we were able to fine-tune our offers and competed very well against this backdrop for the balance of the quarter. This was especially true within our fiber footprint, which is the largest and fastest growing in the U.S. As we have said before, where we have fiber, we win in fiber and 5G. This dynamic continues to drive growth as shown by our increasing rate of converged customer penetration and significant wireless share gains within our fiber footprint. These trends continued and in some cases strengthened in the first quarter. For example, a significant portion of wireless gross ads that took our lead offers during the first quarter were with converged accounts. This is a key reason why we had more converged household gross ads within our fiber footprint during the first quarter compared to last year. As a result, our converged penetration continues to climb, with more than 4 in 10 AT&T fiber households also now subscribing to our mobility services. This is a key trend because accounts with both fiber and wireless services have lifetime values that are more than 15% greater than customers with standalone services. The message here is that the primary driver of our growth is our success at executing our fiber and 5G playbook, and that our increased investments in customer acquisition and retention are driving sustained growth in high-value customer relationships. The fundamentals of our business are very strong, and we continue to feel confident that our strategy and plans for 2025 are on track. However, all companies in the U.S. are now operating with less visibility as the administration pursues policies that are intended to facilitate its laudable goal of creating more equitable global trade and improved domestic manufacturing capabilities. Like others, we're closely monitoring this journey to rebalance global trade and its impact on the broader economy. The announced tariffs could potentially increase the cost of smartphones and other devices, as well as the cost of network and technical equipment. The magnitude of any increase will depend on a variety of factors, including how much of the tariffs our vendors pass on and the impact that the tariffs have on consumer and business demand. Based on the 90-day pause on reciprocal tariffs and our visibility into the supply chain, we believe we can manage the anticipated higher costs within the 2025 financial guidance we provided at the beginning of the year. Our expectations reflect our strong financial performance in the first quarter. the historical resilience of demand for our critical connectivity services across economic cycles, and our decision to reduce discretionary expenses and accelerate cost actions that we had planned for later in this year. That said, this environment remains fluid and will provide further updates based on the ultimate impacts of the reciprocal tariffs. The priorities we laid out in our 2024 Analyst and Investor Day have not changed, and we continue to operate our business to achieve the financial plan and capital returns we outlined in December. As we shared during that presentation, These long-term plans are based on an outlook that assumes a macroeconomic environment with low single-digit GDP growth and moderating inflation. If we ultimately face a lower growth environment over this period, we have the option to adjust our operating posture to prioritize cash flow. This gives us confidence in our ability to execute the expanded capital returns program announced at our Analyst and Investor Day. We plan on commencing share repurchases this quarter. We also continue to evaluate opportunities to deploy our financial flexibility towards strategic investments that complement our organic growth plan, additional capital returns, or further improvements to our balance sheet. So with that, I'll turn it over to Pascal. Pascal?