AT&T (T) 21 Jul 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to AT&T's Second Quarter 2022 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. I would like to turn the conference call over to our host, Amir Rozwadowski, Senior Vice President of Finance and Investor Relations. Please go ahead.

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

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

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

period differ Spectrum risks we want also to XXX. you that As to described AT&T's I and such, they're FCC SEC materially. in in for the quiet are uncertainties Auction subject filings. the Results may remind

So are about John? always, Stankey. call unfortunately, With that today. additional information the can't answer John we questions the website. And and available Relations turn to as earnings Investor I'll materials that, over on

solely quarter, of with share I fiber new XG that America's quarter that Mobility, most go-to-market across entered We of brought levels our customer to our historic been last in saw shared competitive than our just sustained growth our deploying I And profitability the XQ quarter half execution, a performance success-based Even with twin second momentum in from we right It’s second In not to phone ARPU financial of the I'm had we've improved. instead XXXX. the happy this shared Fiber. morning, and growth growth, to in strong this expect expanding Industry In and and that additions, value like this in Thanks, improved solid proposition XXXX better-than-anticipated half you Amir. building expectations to you and for quarter, of the success of but discipline momentum our our in accelerate postpaid and highly XG though investment, strategy our a noteworthy more resulted year. Last good some spectrum last second thanks consistent the the that late our AT&T assets. adds higher-than-expected the market. view, has and first mid-band trend net era than base Thank a reflective year. broadband building base provider. we stronger become structure line our progress, infrastructure is customer engines promotion-led, reinforces in morning everyone. capabilities decade, asset on net best in metrics improving that and our continuing joining And today. environment. we're us in

IP more straight Fiber quarter us of broadband more macro subscribers a Ultimately, long-term trends. Fiber is that in to our second net XXX,XXX our net evidenced more Internet serving play in strategy convert for The shortly, we're, service network, great drive In As through and stated available. we believe We're premium for on This customers our increasing existing finding is in building rates. wired out new guidance growth success and Internet expectations growth velocity Fiber, revenue accelerated markets, discuss Pascal value AT&T key increase Fiber by and to a support with experience Fiber our build than in more is the continue penetration best will XXXX. customer Fiber offering what our improved technology the our share Fiber a XXX,XXX invest will quarter to fact, we deliver and in marking with footprint adds. and AT&T enabling subscribers. than is strength adds, sustainable XXth

the favorable we we lifespan. with ARPU network trends, of a We best-in-class expand is availability believe as a expect continuation to of see multi-decade what a

strong seeing. customer growth the So we're pleased I'm with very

come. services resiliency years proposition the translate for Our success only improved reinforces to to providing. we strong for top-tier expect And we're our in technology value investment our into

more customers, increasing than achieved while XX%. our the million in base of Over pleased by adding nearly X.X postpaid POPs, target, have million expanding mid-band approach the Wireline year. teams ahead very and footprints. of nearly AT&T quarters Fiber target million X we've and made on our our the XX industry-best net POPs million XG expanded track phone start also year. increase This adds, rapidly progress an the fiber to I'm I'm last proud Fiber with achieved ability quarters, our subscriber we've now to million of that our the year-end X of X locations. is serve our the to are mid-band of by gives now this And X XXX covering footprint fiber an end Consumer million XX us from customer say

expect services decades these to to are world-class we running to serve AT&T's to come. to as teams the investing core connectivity for for And our commitment networks customers. hard our growth Our deliver foundation our in

be requiring more without with Moving efficient and economic we'd an than to materially X as compromise proving needed, and second ever, priority. over major obligations. our be on to what It's flexibility adjust, backdrop investment provide us pressured operating us we our operations. The our the across dispositions increasingly priorities is financial important years effective to to executed last

billion billion of more We year. this transformation than on the savings by run visibility have strong of $X our target cost end $X achieving rate

shared we've growth connectivity businesses. before, to these we our initially As fuel reinvested in savings core

the year, to as to start half savings line. expect However, contribute the these we enter this we bottom back of to

$X clearly address our advantage all being taking are than inflationary measures, to more billion business. quarter, proactive that the real we're one seeing outlook. although in difficult our operating results reality believe way very essential and nature consumer inflationary the this pricing thanks we're different flexibility, financial to cycles. our adjustments, and, shared to we're seeing executed in in all not cost we seeing cost As effectively a bad thus cost is the And longest-standing are the our pressures macroeconomic of stronger the a real-time expected. estimate We're offers, that above implemented our embedded expectations are Business easy we've place, extended in increase of ensuring reduction robust that our consistent we're our methodical services manner. in chapter, of to in initiatives inflationary is far, dynamic while such pressure offset in our position an Still, pre-pandemic I pricing business, more emerge actions to parts help navigated pressures. world's impacts. enables Wireline The cash selective not as these that higher the pressures We're those environment some cover of with predict. economy. than impacts. that much of of our of to said, that most and the as With slightly opportunity to I as our clearly a on responding this is strategy you're take elevated times, Last and current underlying to as collection we improved in confident seeing debt we backdrop telecom partially that company, likely provide proactive the evolving ability we're pricing our side sufficient into levels And as aware, on than largest-scaled also the impacting to expectations, be have operators, well the we customers the

in similar what patterns However, previous it's accounts that experiencing to historical we're have managed to today. note their suggest economic important customers cycles

cycle. albeit why flexibility little about before, elevated the bills, as we're growth connectivity This belief warrant their by in financial quite customers we our assets. Furthermore, to cycle uncertainty investments this lives. of remain for long-lived importance expect We we through and deployment justification of given feel And a focus The the the future less our in better resiliency the can better pay view and sound. mentioned does economic In maintain connectivity we that we fact, have investing of of long about even will still through everyone's these confident, no supports fiber. a differently our our over our economic the in I is term the in invest cyclical timely. intent market XG feel long-term underlying retrenchment It's timing while. that not development a for near-term services, this of

us paying I'd to on $XX completion free the flow on with debt down directly. in from in proceeds like debt, net helping the Importantly, the touch Discovery significantly our our WarnerMedia we April, cash to billion quarter. maintained of in also transaction focus the reduce

this did cash than were in free come drove lower expected there several quarter, notable we While factors this. that

higher on back investments The robust success-based of the the of growth. timing first customer our is

our loaded kick-start we Additionally, order front-end our capital plans growth initiatives. investment in to

billion We capital in of our our this as load and effectively And supply through $XX year. I'm been expect able investment these the moderate achieve to plans to work plan. of some pleased the our we we've manage front-end course seasonally chain year,

cash These in inflationary and seeing climate not the In fully longer we've the to our half a the our ability addition offsetting. on us we're at in investing feel manage key for shareholders. of even of while, adjust improvements expectations business the cycles tempered impacts, investment-driven to time, more in expected expectations and the we economic some for been these quarters. for latter pressures impacts, led benefit is our that along full flow with our successful customers cash them to long-term year, costs The collection over takeaway flow year, with and have X the next understand material the emerging confident our that through same economic

flexibility on technologies this business the not maneuver a through achieved access through the the the focus significant ability of broader debt we're allows to term immune financial economy, to for core us solutions, our While our pressures and built climate. in underlying connectivity invest impacting to repositioning the economic long the opportunistically of reduction to

Business sizable focused data business coming with to voice pressures moment customers legacy to as replace I of asset. Finally, increasingly traditional from business services revenue discuss voice reposition the Wireline a solutions. mobile other our collaboration a our is There to This and take services. unit is want and and secular base facing efforts

comes transport and being sector in of front, legacy transitions data the services VPN Today, priorities. half from the Last XQ. solutions. quarter, approximately impacted restructuring government shared timing reallocation we're of our tied services. to revenue pressure, technology government related pressure types of continued spending, experiencing and by to we This additional software-based On of to spending segment that these are the

approximately we're and consider that Wireline offset pricing year-over-year impacts. due XX% hopeful While reductions will worth return volumes share to Solutions revenue noting were that expectations. Enterprise of reset Business will time, quarter the and gains declines spending It's government the to second contract Infrastructure the it prudent over some spending in we

operate to movement inflation in adjustments pricing access wholesale of and services of This to footprint saw we natural resets. be contractual we to resulted This our decline. more incur and charges than pressure the migration more segment's managed providers, traffic pressure will symmetrical through product alternate EBITDA trends. year-over-year efficiently opportunities to Lastly, network XX% provide customers outside cost of wholesale to due

developments executing ahead, in strengthen portfolio. actions takeouts and accelerate to Looking only our our transformation, these cost resolve simplify including product our

We Wireline expect year-over-year now stabilization digits these double actions we back Business profitability XXXX. extends in the expectation segment's But in EBITDA of declines to pressure time. low mitigate for half the year. this our this to And the over expect

efforts the quarter. However, deployment to reposition our segment. an of this is we delivered growth to to fiber each connectivity leading in which remain The solutions, acceleration growth confident our in of close XX% quarter

Our us. the in also Mobility which X expand Moreover, year, with in to ability opportunities relationships underpenetrated for we us more segment Mobility. to market business point business taken full of we've the fiber to continue in space. is share an utilize than gain our last share expansion provides Since SMB,

XG continues Fiber but overnight, focus as to to confident turn execute have Pascal? strong our traction. turnarounds growing the our details opportunities we in Mobility transformation in use ability SMB I'll won't place Our our it relationships to they happen advantage the we're and and gain over We Pascal strategy to successfully. this to of know similar take quarter. expect to enterprise and And on right for Wireline, now we to the in and Consumer discuss it expand.

And John. you, good everyone. morning, Thank

a look Slide start our X. our subscriber areas focus Let's by at market on taking results for

best phone a postpaid strategy mentioned, to than the continues decade. go-to-market customers. adds, our and John quarter our with had In more in second a we remarkable consistent quarter, net resonate XXX,XXX disciplined As

had we Fiber, at adds upon delivered as to accelerate our Looking subscriber our XXX,XXX net we growth. expectations

continue Fiber plans our Our to deployment on we with solid customers. remain track. momentum expect And

quarter Now to our let's on financial move X. Slide second summary consolidated

and recast closing in including WarnerMedia and to Playdemic, certain note, have the April, Xandr other it's the important been historical WarnerMedia divested discontinued of operations. results First, transaction financial to present businesses, as Vrio, with

were lesser where wireless This DIRECTV of offset as Consumer quarter clear applicable, on corporate or dispositions. basis continuing I year-over-year. for revenues Wireline declines. partially our Comparative Mexico year-over-year and While to and, year operations mind provide adjusted the revenues, continues X.X% in to other from $XX.X financial largely Comparative Therefore, growth challenges extent, certain continuing and a million as Wireless, comparative also our addition that was include remaining Wireline. were operations. keep Business $XXX operations, view results results be billion, there by EBITDA year-over-year will revenue declines the in prior comparative higher like-for-like a some and by more partially offset up was costs driven than in Wireline Mexico in growth to a lower up X.X% Business by highlight

flow noncash quarter. of our Capital continuing our investments the $X.XX in and the On year-ago billion flow shutdown for exclude for $X.XX. trend XXXX. was as stand-alone in through by costs distributions Adjusted half cash Free were $X.X step-up continuing made and in operations gain Cash improve operations key year-over-year. progressively and adjusted a in impairment DIRECTV came second EBITDA we AT&T that comparative benefit We $X.X was billion. the in the to EPS year-over-year for billion for billion from were in basis, Adjustments factors. the lap at share $XXX the continue the operations XG the intangible line plans, Cash of EPS affected quarter to $X.X expect proportionate to $X.X our quarter. from a year quarter restructuring was amortization. charges of technology investments was was million DIRECTV several for began the to begin cash quarter up quarter.

First, expected, mid-band higher we front-end XG Fiber had loaded investments capital and spectrum deployment. ramped as we as our

As of noted, half expectations levels in back capital lower year, with $XX John investment expect already we the in the our of billion. line

of billion some last this timing payments The $X the X of impact quarter. item receivables. last for success-based is almost is collections, subscriber collect accelerate about customer tied as year second than it's investments, to more The to consumer taking The is device growth. incremental the including days

take a Slide operating Communications let's on our Mobility deeper segment look starting at Now with results, X.

half prior Revenues X.X%, was and of postpaid record-level a our stabilizing customers sequentially momentum. $X.XX year-over-year. is Our of ahead expectations is for up unlimited This plans with its subscriber or year. continues X.X% were Mobility phone improved second largely roaming in higher-priced growing X.X% Mobility by the of result ARPU revenues more business improvement $XX.XX, up driven trends. trading the to This up growth. service

as Our actions be of larger well. our year. But the a were the June half pricing would back given increases, timing in benefit modest the a expect we to of pricing the access factor

from X%-plus. for expectations of X% for higher year. EBITDA to year-over-year government despite service expectations approximately we our our million credits of up X.X% previously Given is X.X% from That the an now expect cost. Mobility $XXX CAFII stated increased ARPU, impact lower revenue FirstNet growth and

quarter. $XXX around bad during We the also had million of expense debt higher

of in especially we of remain growth customer XXXX. the confident accelerates in lapping is began Again, growth. We the promotional due compared and better-than-expected second slightly active of by when debt became less others revenue shutdown consider growth better growth bad Mobility-adjusted year, being While our revenue our that to we investments performance half that the it pre-pandemic second the half than in than you was is activities expected, offset now to customer higher levels, in industry. EBITDA XG

X value resonating us to yield we the ago is the that go-to-market to that to made clear results So simplify years in marketplace. it's strategic our and proposition strategy change great continue our

Business Wireline for results Now our Slide operating let's X. Consumer on turn to and

solid where was we have share as continue growth Fiber we Our win to fiber.

with grew broadband due again X.X% revenue higher broadband recent fiber broadband copper-based and up customer actions. Wireline driven a services. Consumer total growth even revenues fiber this revenues pricing declines by shift to Broadband from mix Our ARPU, quarter, were to and

with ARPU in Fiber X.X% Our to the range. intake year-over-year, was $XX.XX, $XX ARPU addition up gross $XX

consistently high pricing our now on Fiber pricing XX locations to accelerated to more experience serve great We and ARPU the promotional Fiber fiber customers Scores. We footprint AT&T Net and expect to have overall as that continue simplified off receives ability build to million Promoter customer roll improve with constructs.

product heard and you from fiber, Day, center our at just planned doing As on to copper-based we're a pivoting that. Analyst

through technology expect revenues in accelerate half second of the growth We remainder to of EBITDA of began continue growth broadband and the by XXXX, continued investments the in XXXX. to lapping driven that

Looking shortfall expectation. at to Business in main driving are John earnings as the we Wireline, stated, expected. lower There X came that revenues and factors than our are

the from than sector. lower is revenue first The anticipated government

The is combined inflationary factors about for year-over-year. pressure X on $XXX costs. On second basis, network pressure accounted wholesale in access million these EBITDA a

rationalization Business creates transitioning as the Wireline near-term to our connectivity services and XG portfolio operated pressure it revenues, well the transition of underscores owned incremental and Fiber-integrated importance and While growing solutions. on as

we revenue Fiber, revenue our Business accelerate, up more in as well In year-over-year. areas, fact, continue increase X.X% Both than a sequential of nearly service wireless with XX% perform growth XXX,XXX. of connectivity our FirstNet continues to growth base services and Wireline and Business are XG to

to you we rest Before we I in. we're the year, given operating are shift to provide the update on about the dynamic questions, want macro how thinking of an environment

and on momentum Mobility like mentioned service previously, basis. EBITDA we revenue I our As business, the both in a

the While we for now facing, are replicate service low which plants, decline driving to in adjusted the plan, growth. to Business challenges reduces year, our the Wireline, raised trending this EBITDA our outlook with levels On an and for EBITDA XXXX, fiber our in year. year. are ARPU On given revenue adjusted our strength deliver improved all largely XXXX higher range ARPU Wireline, are and mix Consumer confidence phone coupled Business Putting we on know shift unlikely comfortable the prior experienced expectations to postpaid trajectory. We that we Wireline revenue us expectations. and both better the expect EPS near-term we is which guidance EBITDA first maintain to the remain in trends, industry demand in ability half expectations of EBITDA revenue, ranges for the within together, double-digit give we you

flow. to free cash Moving

unit, of conservative elevated Business inflation free success-based more investment, facing flow it customers, cash for prudent year. Given a combination extension by challenging potential take consider the our more further and Wireline to the our environment the outlook payments to of the for we

our from $X guidance Given pressure these of flow for prior free we to the range $XX anticipate year. cash factors, billion about billion our

get the in some the cash half $XX me specific implied second free questions in on we year billion consider. provide items to with half you how the Now $X to first we of of year, billion before the let of the flow the generated when

year. reflects outlook to versus is versus billion-plus we Our expense. The first expectations improvement including billion the lower year $XX and nearly our expectations: the the lower of the the the increases our half wireless the capital the pricing of following due cash billion lower recent to interest payment balance $X $X due first of full first the to half for investment growth, year relative half customer timing, device as of reach year

We expect payments these benefits in for incremental half of year. from second offset expectations distributions DIRECTV to tax be reduced the our partially by the and

previously do than anticipated. to full However, be year payments we we expect tax lower

flow the fourth Additionally, seasonality free we expect than quarter higher typical third the quarter. with cash

of outlook, EBITDA in cash we're expect not updated improved XXXX. Although conversion an we providing XXXX

ARPU as we a get benefit year base at cash from level. Mobility how. subscriber full Better higher flow a Here's larger

ramp volumes should the roaming more material year. to become We expect the as course trends well. through and MVNO improve International of

fiber mix revenue to from expect growth continue. the broadband higher-priced We to shift

we structure, the cost transformation billion-plus full $X XXXX. by conjunction in cost a reaching our XXXX implemented with year efforts from expect in our end benefit of the On target

of shutdown XXXX. produce second execute Business in recall the XG actions XXXX. of Additionally, in XXXX should that the plan Also no to in to we than Wireline we more the cost million savings in $XXX year half relative have costs

expected expect a in dispositions. for that's operating the should more a nature from actions paydown we're we year-over-year increase and interest doubt the as environment, factors the presentation. but we full feel of from an expected benefit in recent year taxes. In In All We're underlying from addition, these DIRECTV debt lower confident our macro now gained the cash no Amir, in cash our the ready than resilient get we is expense dynamic there taken we XXXX. Q&A. in and offset financial lower summary, business both distribution flexibility

take we're question. Pascal. Thank Operator, the you, ready first to

from [Operator first come Instructions] with Our line the will of UBS. question Hodulik John

Difficulty] [Technical

John, you're breaking up.

you Okay. hear Can me now?

Yes.

Okay. Yes, X parts.

guess, I First, [Technical on -- for Difficulty]. the Pascal.

now. question don't breaking you're sorry, John, you? up Why to we and next the reconnect go right

Okay.

will Flannery Stanley. question with from Simon next Morgan come Our

the free the little put $XX a latest expected to XG you've the to on a cash flow. locations I this or million. million, at Is and that dropping of make said Just you still DIRECTV spend. has anything What's X.X want with homes times. XX to you're then you've some And coming to referenced at help changed you to going year, I in there? of bit any year, couple thought about you've clear, to stop just Can a for And 'XX before of the as guess you overall? especially Or kind pulled what just a off be guidance want fiber? at terms distributions your DIRECTV? 'XX back the XXXX updated billion this that CapEx? are us that given forward you cadence the the the thoughts and in X still do going you expecting of Are payments? continue following million out Or of is same quarterly

these the I decisions. plan so wanted we the the Look, dispositions, we year see to suggests investments Simon. -- is everything remains we strong. -- that And attractive returns. see really both of far, momentum providing you business our next billion have Thanks, Sure. when our mind And that were was invest are all good as keep did Those thing one really level. the and significantly is to think in this in year, things you $XX the we

are next So billion year. yes, we expecting $XX

And fiber at as deploy has relates DIRECTV, guided. it changed nothing previously to at pace all. the to we've continue expect We to

this year. billion $X around expected We

front-end expect As see loaded. more quarters, the first And that's couple from of billion. -- and next we can we $X as year, you

the has that good feel business in changed performing. how really is nothing So about regard. we And

Great. a follow-up. just And quick

the migrating any On or doing? extra churn? And plans? to or not? on $X the Are early of unlimited what's they surprises customers increases, Are Is $XX? accretive read what price your are paying they that

we is expected as of Everything tracking kind out, laid we when Simon. it

existing provide moving And to with any customer characteristics and to option I they're customers were other As to we that. able both. think we're also the great to expect, it, we indicated associated cases, that, many do shared a attractive do were with move. the to a these have occur. ensure going how that seeing you going I we I very particular to of are this we of think segment there's past react from had But behave plan you, a ultimately of get we some a going increase cases, in would their about things in to types we of allow on to more inertia in changes us In pay subscription plants And and customers base. when when not is choosing executing for plans, and case, and opportunity through increase price what models to try evaluate go a and the degree value, as while think, are

to would component and that is of we ARPUs we But we've I with into tell as year this certainly, accretive that told take is react. and in happening. And expected. be of a It and tracking days in the given plans giving. is you we're some we're as you we that seeing Sometimes think occurring early an starting what's And to end bit for the it the as the what that takes value expected. will trade up opportunity as market occur. better of only process change. use for seeing, not now it forecast is we're somebody also consistent some little But would right you, I migrate time of occurred drive a you're everything And in of improvements to

will come Feldman question Goldman Sachs. with next Our Brett from

of collections. related And issue with to sort guess timing I the you two-part question highlighted a that

one you alluded a is experience and really first gives the You to is issue? some So timing prior non-payment a it economic not cycles. in what confidence issue really different

then about hoping particularly So be wireless maybe business. I think on curious your you going just the what might And way this can to you market, shaping in to I'm elaborate was that. extent

As may into the in of sense timing more certainly a very with a you move or stance half the obviously be promotions. make you've back offer year, certain to same promotional of it the suite maintain guidance well half. a difficult Does be the would anticipates any in lower environment, color particularly that's where misunderstanding, back helpful. some there It like issues? seems there your if volumes financial But done a

won't cycle look we we in we occurred evaluated is, if worst-case shocking of recession and coming my that. to patterns is and We occur I back And what's kind those managing was And had effective occurred we've better I'd in the a cycle recent that's even in or at the probably risk. out we've a that. XXXX in dynamic have my how like challenged dynamic we in ever we that be year time, look is scoring to more it. around predict great I experience and And all, have in And most going the thing the indicated is looking and and that of quite I customer next other go first today at as our remarks, say them. cycles at data guess what's earlier as Brett, scenario. a that that as than probably But know so. know be that don't you evaluated that exactly things that, recall. do algorithmic behaviors far stressed more that And can us allow over it pretty of

is things pay. not I people we see of that how different do trends to would these And anything we an paying. pretty a scoring So issue our I got as we've on to dramatically to of issue data believe think in coming of I we've a customer projection those as us some don't they It's there's said, typically be move. comfortable cause that allows and when start our looked feel this credit reasonable in record that at that an period. than not And base previous

don't of market, that terms we go In market on we And I know a had fantastic go to the differently any how I I the than that put think to quarter board. we've want quarter. to

And months slow the it in. going I the We've of in. we right going to And game. we're record many as been market these investment the the said expect probably I aggressive told better at a tepid more we materialized now. looking would and fact, seeing overall others XX-year X more it's slower it there as tempered bit of strong, working leaning be, in it's responded will to ourselves And comes I from of be market front I We'll for second of we've albeit in expected little economic and the as increased we hasn't I've of it being to not that a quarter know incremental growth. really game that to in quarters. each But think working, have going are our put And our very to next to you is maybe promotional activity comments, shy don't we're saying our more up going several expect bit. continuing And continue part yet. heavier in not end much to a the would consistent what it that characterize economics I've in. of as kind subscribers for promotional little as stress have in quarter a that In right I in bringing And play others or before, the at the kind do if I'm bit been like the to We on period. commentaries, with away is play activity your approach them articulating way. much I the long take to past. from that growth as market my you've them now. now. say, been a been and I'm comes for bring a it's the But to to network.

And customer other our Brett, credit point as quality of to one relates overall base. the it

bad see levels. there's all debt, concerning, up did slightly pre-pandemic it's overall, uptick an at from we nothing if in While

So our investors, call a out trends here was question the really are that just happening. broader given macro

not, harmed way, by any in So this. we're

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

there? get lot you number. ago, you then the trends customers think like We Is $XX you cut you, about a confidence away? you are you've things one to that And sound customer the Or have so flow And June follow-ups DSOs. can It's don't couple customer down. little there surprising to talk just potential trends, less and and in far. lower it a that don't finally, doesn't just want Can minute expect of you get HBO? a you just July? been said guys now? new savings in billion, And of it A launch can shift cost sounds and You recent from reaction? use one. the reasonably like But of you what's include XXXX don't slow seen a recent the that visibility, John, still What's cash plans little confident given elevated could free the of that anything into more. so

do can on so. to the Phil, so touch let first. me wishes backfill And extent come these and in to Pascal then you

I on the there's socioeconomic a is insulated. a base to see that's their the first probably trends don't are tends that July, a path and of to because there's And step-ups want of to flip population little how a disclosed. that bit and fill a I call you've And there's expect, on. more making behaviors now get we portion dynamics you the to any they're and the seasonal kind flush. think into of and would that And But got customer is dynamic I is seen starting of occur. during part the move cyclical, our think I the that they're a order banked to bit year the pump you And traveling. it's moving all, that coming weren't And of think to half what know, you that part but people got the gas on I stuff I lot seeing of the dining you'd to prioritization They it's first holiday in the of second a what little market really cash little kind They an tale weren't the were segment in And from you They having adjust way, away low And the patterns goes feeling X a The calls of a and pandemic. But the bills. I've up that hate So bit this I suppressed be a bit tends anything little seeing. hard. and the little certainly But electric decisions. a when down adjustment as really, right in and more walk a we're on the inflation, describe of your end a period seeing -- think betting saw bit cities base period. we're difficult as more to And there bit of haven't hit bit go adjust first higher different it this another postpaid car, starting X% probably question, higher more of of have we skewed is of market to side and quarter. when little here. and vacation given suggests they high that we out. of to occurring. you see it in represented. to not those of clearly bill money that going And

out to starts As the up. capital see show And way stress but is not type collection of is alarming typically it working a happening, we around this Pascal it. it's it's when cycles in bit, as issue moving said, the that's what

that I in would occurring. tell I anything for this you, be don't out pattern So here would of see

that it issue, got what a rate? ways. we annualized? think do over what are more different to course of asked you be probably next a how precise good little with I we if is, though, as we the several 'XX here think pick And how working different the know, have you. than I bit brings. the that ago, And I of And in X on would I picked think bit then And but little and or don't be you'd have question fast I you've if develop quarters now inflation economy, they seeing of months I don't strong, being visibility it is a that the candid parts can X% a are. me eradicate good insights, would X be

not pick see important to what's strong. in comments side, the business yields about a to is a an change. starting to is We pattern fast good cash make bit will inflation economic But overreach. just overall think -- are now going That's like seeing really of into reacts, the in feels what the that I curve things Fed articulated without of his the really we trying flow improve it's bit understand the fundamentals the is 'XX. of feel Pascal the abate how to on that some right happens how And uncertain. mechanical

that, using. of services visibility to Part the But we're call of address stronger changes for were making what away, mechanical what base it were I a we little year. talked mean roaming mean saw at the where look we more look, think the kind finally, good that the especially strong of in that despite our to industry be some what cash have is our pivot with we're a year. kind our been in then at summer, we a it into changes this executing strategy shifted I broadly we and lot feels better we're we in things lot couple your hotspot streaming in felt segment others growth. And the we like of a And of things. capabilities we that question supporting of the their the flow as moving rotation the by more quarter, the we And that the And for think And doesn't needed better in there benefits, the trying what reserving 'XX right get a the on we performance think rest was I of terms as plants. of our we that And has on through And the might we about we the customers. value is plans what the to improved of the to see us areas like forever. play the We're changes of opportunities so market. going plan at for the you, tell business different conversion and on driven fact That this have is about generous in this doesn't still previously. dynamics on move would like of strategy to results, to would a so potential to improvement proposition declare. and in price to working gave I are bit it for and the stood do that's mix it's speak, we is, that moment and

periods -- be move something we good could we decide resonate As and different this And a product. the that do at we'll we're the customers to look other the right when choose kind through to through it. what do to line from we as months that's we front us travel summer get a be that. have, come and peak what customers to in we options get I in choose is part the to viewed to put we to of viewed up is I to for it. and it's a being think we in do that continue bring do that, think place for anything with the like I probably as We as entertainment, around don't moving fact because bundle, think And of period something perspective as should part in great us of forward. promotional what certain Max time to static. bundles industry HBO the going wireless with a of And

with of comes question next Michael Citi. Rollins Our the from line

money a a the discussing environment, the inflationary the had some ACP use that, cycles update an then of deal you could infrastructure size past with is follow-up customers of your you and to are about size terms may pursue? of the out give question. the which in talk climate? potentially When impact for AT&T experiencing you're the program, this secondly, and that be macro how different opportunity opportunity using expectations on your just can AT&T can that that's So customers than it, tougher us of the some And there,

Michael. Sure,

by page the great all, you we of the AT&T., a that by be this about to All you'll is It's tied dollars. on Access taken First is program And is. to Internet, do and that fact of program. program, Access I ACP think, ACP the most And what search think product. put I a change new it's, that need the product, to directly for talks you course, AT&T. have is very easy look the significant in at to out that

I good consumer. think for the it's

a to them more as requirements large, have qualify it them to it our and still is a customers as into connection. to -- that, products qualification been our The that's around bit and the working and adjust space products into And our that better of I a around by operations. As $XX that continues it's in challenged a XXX $XX And to types criteria also eligibility only done. ability most move in on it. well. would fixed ACP. say, not think most service for I get -- some activate things, of and little government this channels, channels, we're get by to but of available maybe And able a to, products. we you and to offers those wireless we've we have income But program new know, little are those move options are result the of on we And have mainline ensuring of healthy in bit the

And good so a I thing. think that's

on a from haul. a an in universal this now, be to perspective get years from differently. and this of have to and sustain several I now But to issue be I'd to right that to element look original service for is renewed, reform country how going is as And long ACP have have program it say we funding key the we the out think we need we still the starts at healthy. policy

I needs more think in we're self-identify but based, And as them the as as and on, we needs-based in something anybody going of are it's doing. little with be insulates in we customers good it actually inflation. of sale of for easy haul, our then we're as those market some a higher economic the point qualify take like that to cycles for a from that move things that what will to product relationships position at make customers the think the or over a and it service. it advantage very and and into makes And long bit continuity

side, infrastructure optimistic. the look, On I'm

will a that think timing-wise, bit haven't I tell is we will now. this given right future what number the guidance be. We you, And any on frankly, little in out

the happens, start from And a going money this the year. level. flow issued that you As not can't until be the know, to at maps FCC are bit later little state the to until really

seeking to defined part, that. in have They back that bring to to go got that, will materialize, online. will then ultimately And start place. The funds. distribution to being to in will government as of year. of will latter do build into next expect to to got state levels, and I go there. some Awards the occur and the and states have things these to processes in the middle process these probably procedural maybe next meaningful you the get year. how have through go start So to We've we will federal the their maps through come the part

the creating over 'XX I the idea before fiber our think not point there are X to better in for are locations of you're now state these actively at get a them as trying have ways that's months shape is states. moves on million meaningful much, and business their each what authorship that we going each states the impact like cycle. rules And our shared approaches. building no the connected to for is are. once 'XX, a with things strategies policy X right working we're looking So through we'll good would we that plans would in I've out, I it call of company material set. and How

else in We are is. a way nobody scaling that

wireless pace. torrid We at a infrastructure are deploying

good I think partner. that makes us a

and to, the end of about through do make day, a reputable, I a highest has scaled think got that our a And that should and a who's the that love. got there. NPS intend combination our can after, engine market at to very states out with us money. we've we ACP customers mature for and somebody chain operational that care of go what this competitive we're demonstrating doing prowess we're the product in supply the the It's scale that and fact execute,

avail a we with ourselves to be with partner should that work can we on very I'm money. think government that. that optimistic I of And some qualified

America. That Barton of question from will come David with Bank

for XXXX. free talk point the you for if about second to guidance, billion flow $XX I cash jumping-off guess and I the wanted half will,

half, is you period. is think, -- be because would equipment I normal, Pascal, a upgrade I higher $X which part which be going spend just moving less to think, said not in it's on the biggest the second billion

kind refresh. be that's iPhone to going I wondering if the was explain tailwind. big why got of You've could a you such

would half. and been the C-band Auction of push. second to with I one kind and in second We've in billion CapEx be question think Spectrum less development big the XXX the the expecting come AT&T kind of $X

into And seems this be as the why X the linked that one last very days that concerned or flow part I the look lengthening the the has CapEx billing one linked in? coming of sensitive cycle down so we year? we sitting it's begins. that as Or if should cycle. Are we back convinced And is X billing it even cash could, is obviously, that is, to

Okay.

Let me try hitting those. all And John in. obviously, can of chime

First, for probably look, the in pay a after sale quarter second the thing happened. we -- quarter to has keep devices, example, is to X.X mind the

we're QX of as the QX, paying and last example, for QX. for part an So

for it's So half from to of in half the the back the Q going and largely of QX year, -- activity back be QX.

the for and season, sales XXXX. half upgrade of we're holiday the to going first the in pay So that

given so good going overall we visibility feel the And situation the this we half of really in the strong which back is the in are have payments for this we our it's mechanically, the terms But attractive payments because year, year make year. of the higher that good a of good overall, are is we think candidly, we growth a it. to good and first had in we very half likely growth, -- device really anticipated, about than very the

locations Remember, last for loaded XXXX, some front-end build it the had delivered relates was And in to the ramp. while year. a got We year, we And of passed. it velocity As X exit exiting CapEx, continued. half first disruptions. fiber million supply year, took that to our the we good and chain and us

So we feel good really about that.

case. the and nothing our In were We we billion terms of and deployment remains of said guided to changed. $XX of pace the that, That capital. has

spending for last part not year. And remind we capital the more any of than thought question? me we're the So your

outstanding Days movement.

outstanding. sales Days

paid This uptick weeks it that is sales what that nascent. DSOs, see is days know. a it We We to, but So they know, we It is or do in may in we Is prior alluded worse? an us. so X a trend but to terms going that, know recessions, late we as trend? relatively here's in customers here's know. Is do of to probably start outstanding. paid get what John don't have

our nature suggest nothing of us pay there's they're that to customers So going won't to connectivity. because want mission-critical services maintain given to the

whether where get it worse issue. to to in much, macro view So not a But we're given think in going prudent uncertainty. it's all I it's the much And that call we is assuming this today. regard, taking environment, are and better, I'm get timing think going going a to than not we

was million we Dave, what for be year. other plan part you, as is commitment we -- the of only we POP months And Pascal XX add as I we'll this that million obviously said as coverage to hit we our this made end of to early. you that that XXX thing to year neighborhood get around capital X the would told you the

are you. I very kind the number to think first it's the probably POPs of intuitive But XXX in XXX to be of million to POPs, you, to coverage than make happen on million intensity remind have next just has in of touch. and just done different the physical what you terms to sites capital them wireless

and States. kind rate some you as the this, straight-line journey help not move would it you United that your of will as to of covering activity of year. the pace be about maybe understand want level through if things most the right we So and to And make you think to of of investment probably

That Frank question James. will come the Raymond of with from line Louthan

earlier to Is that And what is on low business comment then that would going? extent business really your lines And How exiting to is by the declines amounts? we're year to a business of priority little That commented dividend you the going the were on a line? in impacting dividend grow I of you about this various bit forward? margin. great. policy seeing it side, Can no some that part that the think be

And as And the we've are this what there to I clear before, an the standing at right now. and pretty this been And Frank, makes as attractive relative think we the decision. set the to incredibly return the dividend doing. stock. think policy is market said yield we're board on we ultimately we in call I've what on this still look,

choices the front to in As with of us will return evaluate along I dividends, shareholders. Board said, to other

the it to the weighted those those and business want market we in we as or to or full indicated, options the time. is will when time on do we we back those want will buybacks. front something we evaluate push of and push our to And want something get where on more stands. be or right point want some is we've rush then and other the that are policy evaluate where to it, into whether dividend range to decisions from getting to invest And priority we other options what at now have As options a sheet not us can X.Xx, whether at in which balance to

as Our the continue intent of value and to out that have occurs returning stock business. our which good is to mindful the ensure that we today. the in forward price we of dividend see to in adjust go we're we'll we competitive what shareholders, a be and And

asset process On is a I been think not the backing end it's wind-down the heard, new a of you've look, and middle set and Obviously, approach from years like I as And extend well of decisions. front we it. in -- the of we to through have time, that a because processes the choosing But that we repositioning multi-quarter. side, ABS to to around drive This something. this we're away contracts make piece front of sales a say reasonably relatively selling executing has the cycle the set where then kind are the at at of of in straightforward sometimes have feel relatively we're we go products stop lower-margin period customer once And straightforward. multiple occurring. it wrap-up relatively that of of in the for base, can do I end. decision is

we'll in to And last that allow in will then number product have differently and We forward, report business a a some I about segment moving and wireline reduction which in years. our entity the think over down franchise pretty moving we little we want essential is a path. And and viable it's that us dropped the to have right robust a our centered growing is peers. We scale that forward stress products services. of do franchise complexity operated demonstrably on consolidated X.X of is what's the that up I And in to on not what's both here market moving continue our have report that than one bit owned infrastructure. wireless

coming end into of Enterprise part You in sector, the in in seen business. should our understand, lot success coming with in our our our penetrating is we've it's more with the with in on of we business Enterprise of we opportunities attractive from forward, what We're Enterprise getting the our are and increases It's from in is the space as not success [X/X]. deploying, strength we from infrastructure the And wireless deeper coming transport the pleased It's those FirstNet. in low public underpenetrated we've in a a accounts. It's have services. done we really mid-market. that the we're but wireless moving only gains move the the believe market where wireless our into the fiber success that about share accounts

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Fiber progress about the need growth our in some but products. in the we to we're mid-market, heard that You wireless seeing the seeing Pascal to where we're talk space in We're yet. up be not

there. well We will that We space. in play get very

take know that at Our the brand going kind We optimistic all space. than right but the that It's quarters can product engine brand. the make there. we will in us sell we that X expected, very these cylinders. well It's plays I'm get but what right couple how we to more base. happen. asset We customers. how to of space, in approach And all it's getting to hitting It's know

Horan That with line from question will Tim come of the Oppenheimer.

year. Two are about issue? guess, the you questions. virtual elaborate up have And I on increases The CapEx a labor you next secondly, a voice. Is costs these Could with? hearing ARPU know market? your CapEx, you hearing customers? quite line while thing out it networks product on lower are price gave bit of there retaining What we’re just those keeping for CapEx a with your are out in a you private Are your replacing we’re same wireline you then the that I – are offsetting I you you ago guess XX%, how guidance little the for equipment side business them? just legacy XX%. costs, Do more flat?

we I on the infrastructure. and just owned as want operated look, so Tim, articulated, people move, is

away what enterprise VPN-replacement trade the networks, because do and in mid-market aggregates – – offsetting is And occurs. that there we world. that top offsets a that’s when the why higher is bases, underpenetrated higher why allows so core that the end it’s we The very down so on network more trade move the that’s make as sector world replacement in fiber and frankly, mid-market with to product us, technology from to moving leader make end and forward happen. And capability move we SDN values of is And the speeds, on migration is typically on selling connection that total we’re and enterprise is our in we in in and that some typically, well And market. growth happen. have replacement although And we it is. of a in us we’re underlying as to have that replacement, dense at to That’s that is VPN again, is – back bread that into where of this VPN so going have our migrate top as butter. market down the data us a on and the the the business people the distribution side, are more of transport, work where VPN. time where some and repositioning in and fiber the that, are that for fundamental these for make and down value trade that, to space, that the layering complex over segment our important market we a where at sheer therefore, critical investment this important in future an market, We our

customers Our speaking, infrastructure to into run on. collaboration collaboration in underlying what’s play work. at more providers these deeply happened services, extend Generally our to we for as I a when data voice want doing that’s to just moment fairly with other effectively. that to is said you doing the spaces. We sell transport these on Frank’s kind services penetrate future to top forward are we services And on what our that relationship them. moved on those look want wireless And of more scaled solutions it’s think, is that move of and to question, the it. And wireless we’re into I in how

We’ve as On side, articulated some seeing pressures that. through. cost the we move certainly we’re

a lot, better We’re than as navigate you with it we’ve able to shared previously.

have We lot long-term in a of place. contracts

I to We entirely a us lot. they pay tell our be think insulate to us. attention those that. We healthy. help suppliers won’t you want I

partnerships suppliers. good, candid. And be I will long-standing with our have We

And makes had some think people more, In more win-win people though down relationship to pay some pay and We with for elected have cases, I’ve moving we’re we costs them. because even not to things build that having are I take forward. doing. into on our sat what to a healthier

long-lived these are assets. However,

data long-lived thought build we’re we That We’ve big trends That in our there the effectiveness can with is when a example, really in make build. us. important of costs, And on balancing as quarters And like some and really We move characteristics some an ultimately, probably work world ARPU did these lot for And over the churn out not you this penetrating a of the return And a inflation, on it’s ultimately through the maybe business. of our the We’ve some multiple if than end act when through building per-living us impact we’re fiber building for think on on better we get really a said with than cost a investment asset important you All move seeing. we putting ground our it is rapidly and that we’ve of trends shared we’re as we’ll from it. it lot it’s into more smart year original things unit product, We of still case see the overall the a time. ARPUs you today. would. the asset increase and those we shared seeing. for things, increases. before, accretion has business a like overcome today those the I investment. of it’s

and the manage through we of this with over given our well, durability relationships product feel scale, I long-term like and given our So time. folks importance reasonably can the

you. Thank

we is economically, stress, on business; And that and pleased, this say what in those And for AT&T environment of think folks, taking I’m now operations time in through sure hopefully to know to with I could are it’s and right goes to this And a moving were in that one, those that ability moving do, quarter heavily us doing consistent moment deliver hard brought intended rising exactly machine this I’m to you in moves cetera. invest flexibility in subscription having services a give that made can make think broadband I we’re hard the more about we some disaggregation us number which We allowed do appreciate excited decisions. and would to discontinued this we respond in finishing made really But from moves us acknowledge. economic to us So to consistent what rates, quarter I little results. this forward and the this fashion. of this to, about forward. all be And to that. the really for the a extra And the got, work do the interest work maybe to the the with as we do whether kind create time, like morning. et you durable last a I position how we

doing infrastructure, a building we’re We’re that. where world-class

to achieve. customer a you You’re and this like bit these view business relationships that seeing as And a the team, infrastructure relationships that durable we’re able top in momentum the are is with in the market we I land of and with attractive. way the plane pin. I customer accretive the trying sometimes to will XX as that highly I a the operate days on we work build tell

momentum, moving of put the a And investing work, make for year. you in look to We I doing want we that shareholders people that, of right that’s the what the has year of it and all and we’ll that as reality not end be kind cycle the we in is the got confidence occur the given of a in shape we’ve so world continue the think form. XX-day when to over the the their there. right way, I Hopefully, we we’re think, any understand of proud we this to what’s course way fashion to about going at And or the balance going a I’ve we’re return here, in of forward. things invest. business doing sure out And

rest you with you of XX enjoy we’ll thank And in very days. your So the much. all you summer. hope talk I

conference your participation conferencing gentlemen, thank our does for and that for for using AT&T today. service. conclude We Ladies you and

disconnect. may now You