AT&T Financial Model
Telecom Company Financials Example (Free Excel Download)
AT&T Inc. is a premier telecommunications company providing wireless and wireline connectivity services to consumers and businesses globally.
professionals from Deloitte
Used by professionals from
About this model
This model projects AT&T's free cash flow generation and deleveraging trajectory to determine equity valuation and assess the long-term sustainability of its dividend payout for an equity research or credit analyst.
AT&T Inc. is a premier telecommunications company providing wireless and wireline connectivity services to consumers and businesses globally. The company has transitioned into a pure-play connectivity provider following the divestitures of its media (WarnerMedia) and pay-TV (DIRECTV) assets.
- Business Segments: Mobility (approx. 73% of segment revenue), Business Wireline (approx. 15%), Consumer Wireline (approx. 9%), and Latin America (approx. 3%).
- Key Geographies: Primarily the United States, with a smaller wireless operation in Mexico (Latin America segment).
- Business Model Type: Asset-heavy, subscription-based infrastructure model requiring massive upfront capital investment in spectrum and network equipment to generate recurring service revenue.
- Competitive Position: One of the top three wireless carriers in the US alongside Verizon and T-Mobile, and a leading national fibre broadband provider.
- Recent Major Events: Completed the sale of its remaining stake in DIRECTV in 2025, resulting in a tax-free gain and the removal of DIRECTV cash distributions from future free cash flow. The company also announced a segment reporting restructuring effective Q1 2026, shifting to Advanced Connectivity and Legacy segments.
The downloadable AT&T financial model includes SEC-sourced historical financials, forecast assumptions, core operating schedules, and valuation outputs in an Excel workbook built for review and scenario analysis.
A turnkey financial model
Live formulas, no hardcoded values
Outputs are driven by live formulas, so the workbook updates from its assumptions instead of relying on hardcoded results.
All assumptions in one tab
Inputs are clearly marked in the Assumptions tab and separated from calculations, making it clear what to change and what to leave intact.
Statements always balancing
For integrated-statement models, the balance sheet, cash flow, and supporting schedules tie through properly.
Distinct schedules for clarity
Debt, working capital, taxes, and cash flow can get messy quickly. We group calculations in clear schedules, not across disconnected tabs.
No hidden macros or external links
There are no unexplained external workbook links or macros to undermine auditability or portability.
Changes flow through the model
Update a key driver and see the impact carry through the forecast, financing, and return outputs. We never use hardcoded numbers in formulas.
Historicals & AssumptionsAT&T financial modelCompany, Historicals & Assumptions used
Source: SEC EDGAR · values in USD
| Line item | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 |
|---|---|---|---|---|---|
| Revenue | $134.04B | $120.74B | $122.43B | $122.34B | $125.65B |
| Other cost of revenues (exclusive of depreciationand amortization shown separately below | $31.23B | $26.84B | $26.99B | $26.97B | $25.42B |
| Operating income | $25.90B | -$4.59B | $23.46B | $19.05B | $24.16B |
| Net income | $20.08B | -$8.52B | $14.40B | $10.95B | $21.95B |
Forecast assumptions
Defaults used in the downloadable model. Forecast horizon: FY2026–FY2030.
See 8 moreSee less
How to build a detailed financial model for AT&T
A complete walkthrough of every driver, margin, working-capital input, and capital-allocation assumption used in the downloadable model.
Revenue Deep Dive
Mobility
- Segment Name: Mobility (reported under Communications).
- Revenue Driver Formula: (Average Postpaid Phone Subscribers x Postpaid Phone ARPU) + Prepaid Revenue + Equipment Revenue.
- Historical Growth Rate: 2% to 4% CAGR for service revenue.
- Key Growth Levers and Headwinds: 5G adoption, connected devices, and low churn rates drive growth, while intense promotional competition and handset upgrade cycles act as headwinds.
- Pricing Dynamics: Highly competitive, largely contractual or subscription-based, with periodic price increases on legacy plans to encourage migration to premium unlimited tiers.
- Revenue Recognition Notes: Equipment revenue is recognised upfront at the point of sale, while service revenue is recognised over time as the service is provided. Promotional handset credits are deferred and amortised against service revenue over the contract term.
- Seasonality: Q4 is typically the strongest for equipment revenue and subscriber additions due to holiday promotions and new iPhone launches.
Business Wireline
- Segment Name: Business Wireline (reported under Communications).
- Revenue Driver Formula: Advanced Connectivity Revenue + Legacy Voice/Data Revenue.
- Historical Growth Rate: Declining at 5% to 8% annually.
- Key Growth Levers and Headwinds: Growth in fibre and advanced networking is entirely offset by the secular decline in legacy copper-based voice and VPN services.
- Pricing Dynamics: Contractual enterprise agreements, often subject to competitive bidding and volume discounts.
- Revenue Recognition Notes: Recognised over the life of the enterprise contract.
- Seasonality: Relatively stable throughout the year.
Consumer Wireline
- Segment Name: Consumer Wireline (reported under Communications).
- Revenue Driver Formula: Average Fibre Connections x Fibre ARPU + Legacy Non-Fibre Revenue.
- Historical Growth Rate: Mid-single digits overall, but Fibre revenue grows at 13% to 17% annually.
- Key Growth Levers and Headwinds: Expanding the fibre footprint (targeting 40 million locations by 2026) and AT&T Internet Air (fixed wireless) adoption.
- Pricing Dynamics: Subscription-based, with promotional introductory pricing that steps up after 12 months.
- Revenue Recognition Notes: Recognised monthly as service is provided.
- Seasonality: Q3 often sees a slight bump from back-to-school household formations.
Latin America
- Segment Name: Latin America.
- Revenue Driver Formula: Mexico Wireless Subscribers x Mexico ARPU + Equipment Sales.
- Historical Growth Rate: High single digits.
- Key Growth Levers and Headwinds: Network expansion and macroeconomic conditions in Mexico.
- Pricing Dynamics: Highly competitive prepaid market dominated by America Movil.
- Revenue Recognition Notes: Similar to US Mobility, heavily weighted towards prepaid upfront recognition.
- Seasonality: Q4 holiday peak.
Cost Structure
Variable Costs / COGS
- Line-by-line breakdown: Equipment costs (handsets), broadcast/programming costs (historically, now minimal), network interconnection fees, and traffic compensation.
- Gross margin range: Not explicitly reported as "Gross Margin" on the income statement (AT&T reports Operating Expenses), but implied equipment margins are often negative or near zero as handsets are used as loss leaders to acquire service subscribers.
- Key input costs: Handset wholesale prices from Apple and Samsung, utility costs for network power.
- How COGS scales: Equipment costs scale directly with gross subscriber additions and upgrade rates.
Operating Expenses
- R&D: Minimal as a percentage of revenue; mostly embedded in network operations and IT.
- SG&A: Includes retail store operations, marketing, advertising, and customer service. Typically runs at 15% to 18% of revenue.
- Depreciation & Amortisation: Massive expense category, typically 14% to 16% of revenue, driven by the capital-intensive nature of the 5G and fibre networks.
- Stock-Based Compensation: Relatively low compared to tech companies, typically under 1% of revenue.
- Restructuring / one-time charges: Frequent asset impairments, severance costs, and network abandonment charges as the company decommissions legacy copper networks.
Margin Profile
- EBITDA margin: Consolidated Adjusted EBITDA margin ranges from 34% to 36%.
- Operating margin: 15% to 19%.
- Net margin: Highly variable due to one-time items, typically 10% to 18%.
- Segment-level margins: Mobility EBITDA service margins are exceptionally high (over 50%), while Business Wireline margins are compressing due to legacy revenue declines.
Balance Sheet Structure
- Total assets: Approximately $423 billion.
- Key asset categories: Property, Plant and Equipment (PP&E) at approx. $130 billion; Licences (wireless spectrum) at approx. $127 billion; Goodwill at approx. $63 billion.
- Goodwill & intangibles: Extremely high (over 40% of total assets) due to historical acquisitions of Time Warner, DIRECTV, and spectrum auctions.
- Working capital profile:
- DSO: 25 to 35 days.
- DIO: 15 to 25 days (primarily handset inventory).
- DPO: 45 to 60 days.
- Net working capital: Structurally negative, which provides a source of cash as the company grows.
- PP&E: Consists of cell towers, fibre optic cables, switching equipment, and routing hardware. Useful lives range from 3 to 15 years.
- Right-of-use assets: Material, approximately $22 billion, primarily representing leases for cell tower space and retail stores.
Capital Expenditure & Investment
- Capex as % of revenue: 16% to 18%.
- Maintenance vs. growth: The majority is growth and upgrade capex (5G deployment, C-band spectrum clearing, and fibre passing expansion).
- Major capex programmes: Expanding the fibre network to 40 million locations by 2026 and deploying Open RAN technology.
- Capitalised software: Material, included within total capital investment figures.
- M&A pattern: Historically a transformational acquirer, but currently focused entirely on organic growth and debt reduction.
Debt & Capital Structure
- Total debt: Approximately $140 billion, with Net Debt around $125 billion.
- Debt/EBITDA ratio: Currently around 2.6x, with a management target of 2.5x expected to be reached in 2025/2026.
- Credit rating: Investment grade (typically BBB/Baa2 range).
- Key debt instruments: Primarily long-term fixed-rate senior notes, supported by commercial paper and revolving credit facilities.
- Maturity profile: Staggered, with average maturities exceeding 10 years to match long-lived infrastructure assets.
- Interest rate profile: Predominantly fixed rate, insulating the company from short-term rate hikes.
- Share repurchase programme: Active $10 billion authorisation, with a subsequent $10 billion authorisation approved for 2026-2028.
- Dividend policy: Annualised dividend of $1.11 per share, representing a payout ratio of approximately 45% to 50% of Free Cash Flow.
Cash Flow Characteristics
- Operating cash flow conversion: OCF is typically $38 billion to $39 billion, representing roughly 1.5x to 2.0x Net Income due to massive D&A add-backs.
- Free cash flow margin: 13% to 15% of revenue (approx. $17 billion to $18 billion annually).
- Major non-cash items: Depreciation, amortisation of spectrum licences, deferred income taxes, and actuarial gains/losses on pension plans.
- Working capital cash flow impact: Favourable timing of device payments and vendor financing often provides operating cash flow benefits.
- Capex intensity: Very high. AT&T defines its Free Cash Flow as OCF minus Capex minus Cash paid for vendor financing.
- Cash tax rate: Often lower than the statutory rate due to accelerated depreciation on network assets.
Sheet Structure
- Assumptions: Hardcoded drivers for subscriber growth, ARPU, margins, capex, and capital returns.
- Summary: Dashboard showing revenue, Adjusted EBITDA, Free Cash Flow, Net Debt/EBITDA, and valuation outputs.
- Operating Stats: Postpaid phone net adds, Fibre net adds, ARPU by segment, and churn rates.
- Revenue Build: Revenue projected by segment (Mobility, Business Wireline, Consumer Wireline, Latin America) split by Service and Equipment where applicable.
- Income Statement: GAAP income statement mirroring the 10-K, from Operating Revenues down to Net Income Attributable to Common Stock.
- Balance Sheet: Assets (highlighting PP&E, Licences, Goodwill) and Liabilities/Equity.
- Cash Flow Statement: OCF, CFI, CFF, and a specific reconciliation for AT&T's definition of Free Cash Flow.
- Debt Schedule: Tranches of debt, interest expense calculation, and mandatory repayments.
- PP&E & Intangibles: Capex roll-forward, spectrum amortisation, and depreciation schedules.
- DCF Valuation: Unlevered free cash flow calculation, WACC build, and terminal value.
Key Financial Relationships
- Mobility Service Revenue = Average Postpaid Phone Subscribers x Postpaid Phone ARPU x 12 + Prepaid Revenue + Reseller Revenue.
- Consumer Wireline Fibre Revenue = Average Fibre Connections x Fibre ARPU x 12.
- Total Operating Revenues = Mobility Revenue + Business Wireline Revenue + Consumer Wireline Revenue + Latin America Revenue.
- Adjusted EBITDA = Operating Income + Depreciation & Amortisation + Restructuring/Impairment Charges.
- Mobility EBITDA Service Margin = Mobility Segment EBITDA / Mobility Service Revenue.
- Equipment Margin = (Equipment Revenue - Equipment Costs) / Equipment Revenue (typically negative).
- AT&T Defined Free Cash Flow = Cash from Operating Activities - Capital Expenditures - Cash Paid for Vendor Financing.
- Net Debt = Total Short-Term Debt + Total Long-Term Debt - Cash and Cash Equivalents.
- Leverage Ratio = Net Debt / Adjusted EBITDA.
- Dividend Payout Ratio = Total Dividends Paid / AT&T Defined Free Cash Flow.
- Interest Expense = Average Total Debt x Weighted Average Interest Rate.
- D&A Expense = (Beginning PP&E + Ending PP&E) / 2 x Blended Depreciation Rate.
Cross-Sheet Dependencies
- The Operating Stats sheet feeds subscriber and ARPU data directly into the Revenue Build.
- The Revenue Build feeds the top line of the Income Statement.
- Operating expenses on the Income Statement rely on D&A calculations from the PP&E & Intangibles sheet.
- Net Income from the Income Statement is the starting point for the Cash Flow Statement.
- Capital Expenditures from the Assumptions sheet feed both the PP&E & Intangibles roll-forward and the Cash Flow Statement.
- The Cash Flow Statement determines the ending cash balance, which feeds the Balance Sheet and the Net Debt calculation on the Summary sheet.
- The Debt Schedule calculates interest expense, which feeds back into the Income Statement (creating a circular reference that must be managed via a toggle or iterative calculation).
Sign Convention
- Income Statement: Revenues are positive. Expenses (COGS, SG&A, D&A, Interest) are negative. Net Income is positive if profitable.
- Balance Sheet: All Assets, Liabilities, and Equity balances are positive. Contra-assets (Accumulated Depreciation) are negative.
- Cash Flow Statement: Cash inflows (Net Income, D&A add-back, increases in payables) are positive. Cash outflows (Capex, dividends, debt repayment, increases in receivables) are negative.
Things Most Likely to Go Wrong
- DIRECTV Cash Flows: Historically, AT&T included DIRECTV distributions in its OCF and FCF. Following the 2025 sale, these cash flows disappear. The model must exclude DIRECTV cash flows for 2026 onwards to avoid overstating FCF.
- Vendor Financing: AT&T relies heavily on vendor financing for network equipment. The cash paid for this must be deducted from OCF to calculate true Free Cash Flow, otherwise FCF will be artificially inflated.
- Segment Reporting Changes: AT&T announced a shift to "Advanced Connectivity" and "Legacy" segments starting in 2026. If modelling based on 2025 historicals, stick to the legacy segments (Mobility, Business Wireline, Consumer Wireline) but flag the transition.
- Equipment Margins: Analysts often assume equipment revenue generates profit. For AT&T, equipment revenue is heavily subsidised; equipment costs usually exceed equipment revenue.
- Spectrum Amortisation: Spectrum licences are indefinite-lived intangible assets and are generally not amortised, but rather tested for impairment. Do not apply a standard amortisation rate to the $127 billion licence balance.
- Deferred Contract Costs: AT&T defers billions in customer acquisition costs (promotional phone credits) and amortises them over the contract life. This creates a disconnect between cash flow and recognised revenue.
- Capital Investment vs. Capital Expenditures: AT&T reports both. "Capital Investment" includes vendor financing payments. Ensure the model uses the correct metric when calculating FCF.
- Pension Accounting: AT&T has a massive pension plan. Actuarial gains and losses are recognised immediately in the fourth quarter, causing wild swings in GAAP Net Income. The model should focus on Adjusted EPS and Adjusted EBITDA to normalise this.
Validation Checks
- "AT&T Defined Free Cash Flow should be in the $17 billion to $19 billion range; flag if outside this band".
- "Net Debt / Adjusted EBITDA must trend towards the 2.5x target; flag if leverage increases".
- "Mobility Service Revenue growth should not exceed 4% without flagging, as the US wireless market is highly saturated".
- "Dividend payout ratio (Dividends / FCF) should remain below 60% to ensure dividend safety".
- "Capital Expenditures as a percentage of revenue should remain between 15% and 18% to support ongoing fibre and 5G builds".
- "Business Wireline revenue must show negative growth; flag if the model projects positive growth in this segment".
- "Balance sheet must balance: Total Assets = Total Liabilities + Equity in every period."
- "Effective tax rate should be approximately 22% to 24%."
Key Assumptions (Default Values)
| Assumption | Default Value | Unit | Rationale |
|---|---|---|---|
| Mobility Service Rev Growth | 2.5 | % | Blended growth from postpaid net adds and slight ARPU expansion. |
| Mobility Equipment Rev Growth | 3.0 | % | Normalised upgrade cycle volume growth. |
| Consumer Wireline Fibre Rev Growth | 15.0 | % | Continued aggressive expansion of fibre footprint and subscriber capture. |
| Consumer Wireline Legacy Rev Growth | -10.0 | % | Secular decline of copper-based broadband and voice. |
| Business Wireline Rev Growth | -7.0 | % | Ongoing secular pressures on legacy voice and VPN services. |
| Latin America Rev Growth | 5.0 | % | Steady subscriber growth in the Mexican wireless market. |
| Consolidated Adj. EBITDA Margin | 35.5 | % | Margin expansion driven by high-margin fibre and mobility service growth. |
| Capital Expenditures | 22.0 | $ Billions | Management guidance for ongoing 5G and fibre network investment. |
| Cash Paid for Vendor Financing | 1.5 | $ Billions | Historical average run-rate for vendor financing obligations. |
| Effective Tax Rate | 23.0 | % | Standard corporate tax rate adjusted for state taxes and minor permanent differences. |
| Annual Dividend per Share | 1.11 | $ | Management stated policy for 2026-2028 capital allocation. |
| Share Repurchases | 3.3 | $ Billions | Run-rate to complete the $10B authorisation over three years. |
| Cost of Debt | 4.5 | % | Weighted average interest rate on existing long-term debt portfolio. |
| WACC | 7.5 | % | Standard discount rate for a mature, large-cap US telecom operator. |
| Terminal Growth Rate | 1.0 | % | Mature industry with growth roughly tracking long-term population/GDP growth. |
Data Sources & Benchmarks
- Filings: SEC EDGAR database for AT&T Inc. (Form 10-K, 10-Q, 8-K) and the AT&T Investor Relations website for quarterly earnings presentations and trending schedules.
- Key Peers: Verizon Communications (VZ), T-Mobile US (TMUS), and Comcast (CMCSA) for broadband benchmarking.
- Industry Data: FCC reports on broadband deployment, TeleGeography for global network data, and OpenSignal for 5G network performance metrics.
- Consensus Estimates: Bloomberg or FactSet for consensus revenue, EBITDA, and FCF estimates.
Sources
Do more with the AT&T model
Frequently asked
What is AT&T's primary business focus?+
AT&T Inc. is a premier telecommunications company providing wireless and wireline connectivity services to consumers and businesses globally. The company has transitioned into a pure-play connectivity provider following the divestitures of its media and pay-TV assets.
What are AT&T's main revenue segments?+
AT&T's primary revenue segments include Mobility, which accounts for approximately 73% of segment revenue, Business Wireline, and Consumer Wireline. A smaller portion comes from its Latin America operations, mainly Mexico.
What is AT&T's capital expenditure strategy?+
AT&T's capital expenditure, typically 16% to 18% of revenue, is largely focused on growth and upgrades. Major programs include expanding the fiber network to 40 million locations by 2026 and deploying Open RAN technology.
What is the purpose of the AT&T financial model?+
The AT&T financial model projects the company's free cash flow generation and deleveraging trajectory. Its purpose is to determine equity valuation and assess the long-term sustainability of its dividend payout for an equity research or credit analyst.
Can I download an Excel financial model for AT&T?+
Yes, a downloadable Excel financial model is available for AT&T. This general corporate model forecasts the company's financials from FY2026 through FY2030.
What are some key assumptions in AT&T's financial model?+
Key assumptions in AT&T's financial model include a revenue growth rate of approximately -9.3% and COGS as 21.1% of revenue. The model also assumes a tax rate of 21% and capital expenditure at 12.7% of revenue.
Have more financial modelling questions? Contact us
Created by ex-finance professionals
Hey, I’m Alex and I created Finamodel.
Over my years in the finance industry I kept building the same models over and over again. Same structure, same assumptions, different logo. So I started building frameworks to turn them into clean, reusable templates.
Every model here is one I’d actually use for a client, and I personally vet each one before it goes up.
I’m not an expert in every industry, but I’ve built enough models to know what belongs in one. And when something is completely foreign to me, I reach out to my network for experts to work on our models with us.
Having a template library on hand cuts a first build from hours to minutes.
Need help finding your model? You’ll find me in the Finamodel app!
Other Telecom Company Financial Models
Browse another company in the same sector.
American Tower
American Tower Corporation (AMT) is a global real estate investment trust (REIT) that owns, operates, and develops multitenant communications real estate.
Crown Castle
Crown Castle owns, operates, and leases shared communications infrastructure across the United States, providing critical real estate for wireless carriers to deploy their networks.
Charter Communications
Charter Communications (operating under the Spectrum brand) is a leading broadband connectivity company and cable operator in the United States, serving over 31 million customer relationships across 41 states.
Comcast
Comcast Corporation is a global media and technology conglomerate that delivers broadband, wireless, and video connectivity alongside premium entertainment, sports, and theme park experiences.
EchoStar
EchoStar Corporation is a global provider of terrestrial and non-terrestrial wireless connectivity, satellite communications, and television entertainment.
SBA Communications
SBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure, primarily cell towers, across the Americas and Africa.
T-Mobile US
T-Mobile US is a leading wireless telecommunications operator in the United States, providing wireless voice, messaging, and data services alongside high-speed internet to consumer and enterprise customers.
Verizon
Verizon Communications Inc.
Explore more Tech & Software financial model templates.
