ARPA growth was over 5%, the highest in 8 years, driven by customers self-selecting premium rate plans, including the new Experience Beyond plan.
Core adjusted EBITDA grew 6% year-over-year, and adjusted free cash flow reached a Q2 record of $4.6 billion, with a 26% conversion rate from service revenues.
Fiber broadband is ramping up with the launch of T-Fiber and acquisitions of Lumos and Metronet, targeting 100,000 fiber net additions this year.
Postpaid service revenues grew 9% year-over-year, accelerating from Q1, while total service revenues grew 6%, more than double the rate of closest competitors.
The business group led the industry in net additions, and 5G broadband led the industry for the 14th consecutive quarter in net additions.
T-Mobile delivered its best Q2 ever with record growth in postpaid phone nets, total postpaid net additions, and gross additions, all up double digits year-over-year.
Accelerated Fiber Deployment and 2030 Growth Targets
AT&T plans to accelerate fiber deployment to 4 million new locations annually by the end of 2026, supporting a target of approximately 50 million customer locations by 2030.
The company aims to reach over 60 million fiber locations including acquisitions and joint ventures, doubling its fiber reach from over 30 million locations.
This expansion is supported by pro-investment provisions in the One Big Beautiful Bill Act, which also facilitates spectrum pipeline development.
Communications segment revenue was $1.153 billion, up 14% year-over-year, with messaging growth accelerating for the fourth consecutive quarter and double-digit voice growth for the first time in two years.
Free cash flow was a record $263 million for the quarter.
GAAP income from operations was $37 million, marking the third consecutive quarter of GAAP operating profitability.
Non-GAAP gross profit was $623 million, up 8% year-over-year, with a gross margin of 50.7%, down 260 basis points year-over-year due to messaging mix, increased carrier fees, and FX impacts.
Non-GAAP income from operations reached a record $221 million, up 26% year-over-year, with a non-GAAP operating margin of 18%.
Segment revenue was flat at $75 million year-over-year but achieved non-GAAP income from operations of $6 million, surpassing the breakeven target.
Stock-based compensation was 12.1% of revenue, slightly up quarter-over-quarter but down year-over-year.
Twilio reported record Q2 2025 revenue of $1.228 billion, up 13% year-over-year on both reported and organic bases.
Twilio repurchased $177 million of shares in Q2, totaling $307 million year-to-date.
The sale involved extensive negotiations over several years, highlighting a major strategic pivot for the company.
The transaction included spectrum assets, which are expected to be monetized further through upcoming sales to AT&T and Verizon, projected to generate $2 billion in proceeds.
The completion of this sale is seen as a key milestone in the company's transformation and focus on infrastructure assets.
Capital expenditures were $20.7 million in Q2, with higher CapEx expected in 2025 to support 5G standards and corporate facilities investment.
Cash and cash equivalents stood at $79.3 million with net leverage at 3.6x OEBITDA, expected to reduce below 2x by 2030.
Commercial broadband revenue declined 6% to $12.7 million due to a shift from primary service to companion backup VSAT plans with lower ARPU.
Commercial IoT revenue grew 8% to $44.8 million, reflecting broad adoption across consumer and commercial applications.
Commercial service revenue increased 2% to $128.8 million, led by IoT growth, while voice and data revenue rose 1% to $56.8 million with stable subscribers.
Engineering and support revenue rose significantly to $41.9 million from $25.8 million, driven by work with the Space Development Agency and new U.S. contracts.
Government service revenue increased modestly to $26.8 million, reflecting a step-up in the EMSS contract with the U.S. government.
Operational EBITDA was up 6% in the second quarter to $121.3 million, driven by revenue from engineering and support and recurring services.
Posting and other data services revenue was $14.5 million, up 1%, driven by rising PNT revenue offset by other data service contracts.
Pro forma free cash flow for 2025 is projected at just over $300 million, representing a 61% conversion rate of OEBITDA to free cash flow and a yield approaching 10%.
Subscriber equipment sales declined 15% to $19.5 million but full-year sales are expected to be in line with 2024.
Advertising and marketing services (AMS) revenue declined 4% year-over-year to $288 million, impacted by macroeconomic headwinds and a change in reseller partnership with Gray Media.
Cash and cash equivalents totaled $757 million at quarter end, with net leverage at 2.8x.
Distribution revenue was flat year-over-year at $370 million, supported by contractual rate increases despite subscriber declines.
Excluding the Gray Media impact, underlying AMS revenue declined 2% year-over-year.
Non-GAAP operating expenses decreased 3% year-over-year due to cost-cutting initiatives, primarily in compensation and outside services, partially offset by increased programming expenses.
Total adjusted EBITDA decreased 14% year-over-year to $151 million, reflecting revenue declines partially offset by cost savings.
Total company revenue for Q2 2025 decreased 5% year-over-year to $675 million, within the guidance range of down 4% to 7%.
Significant Market Share Gains in Europe and U.S. Tier 2 Carriers
European market strength, particularly in Germany and Italy, with ongoing momentum and new customer wins.
U.S. Tier 2 carriers contributed to market share growth, with approximately 10-11 new carriers added in fiber access during the quarter.
Strategic focus on replacing Eastern vendors and expanding customer base in Tier 2 and Tier 3 segments, with about 50% of new business involving cross-selling of optical and fiber access products.
Adjusted EBITDA was a $400,000 profit, outperforming guidance which forecasted a loss between $2.1 million and $600,000.
GAAP gross margin was 33.2%, and cash gross margin was 38.4%, both within guidance ranges but lower year-over-year due to revenue mix.
Operating cash flow was $7 million, and free cash flow was $4.6 million, representing a 12.9% free cash flow margin for the quarter.
Security Solutions accounted for approximately 90% of total revenue and was the primary driver of growth.
Telos reported second quarter 2025 revenue of $36 million, a 26% year-over-year increase, exceeding guidance of $32.5 million to $34.5 million.
Year-to-date free cash flow was $8.4 million or 12.6% margin, with significant improvements driven by revenue growth, cost discipline, and working capital management.
The move away from bulk hardware sales is part of a broader effort to align revenue with customer buying cycles, which should benefit revenue predictability starting in 2026.
This transition has caused a temporary decline in hardware margins but is expected to improve overall margin profile as SaaS and recurring revenues grow.
The company booked over 24,000 new units in Q2, the highest in over a year, indicating early positive traction from the new sales approach.
Dafinchi
