Stock Analysis on Net
Stock Analysis on Net

AT&T Inc. (NYSE:T)

Common-Size Income Statement 

AT&T Inc., common-size consolidated income statement

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12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Service 80.51 81.85 81.39 81.03 86.69
Equipment 19.49 18.15 18.61 18.97 13.31
Operating revenues 100.00% 100.00% 100.00% 100.00% 100.00%
Equipment -20.21 -18.19 -18.90 -19.88 -14.08
Broadcast, programming and operations 0.00 0.00 0.00 0.00 -14.68
Other cost of revenues, exclusive of depreciation and amortization -20.23 -22.05 -22.04 -22.23 -18.50
Cost of revenues -40.45% -40.23% -40.94% -42.11% -47.26%
Gross profit 59.55% 59.77% 59.06% 57.89% 52.74%
Selling, general and administrative -23.03 -23.22 -23.58 -23.99 -22.47
Asset impairments and abandonments and restructuring -0.67 -4.15 -0.97 -22.77 -2.90
Depreciation and amortization -16.62 -16.82 -15.34 -14.93 -13.54
Operating income (loss) 19.23% 15.57% 19.16% -3.80% 13.83%
Interest expense -5.42 -5.52 -5.48 -5.06 -4.08
Equity in net income of affiliates 1.51 1.63 1.37 1.48 0.37
Other income (expense), net 6.17 1.98 1.16 4.81 5.83
Other income (expense) 2.26% -1.92% -2.95% 1.24% 2.13%
Income (loss) from continuing operations before income taxes 21.49% 13.65% 16.21% -2.56% 15.96%
Income tax expense on continuing operations -2.88 -3.63 -3.45 -3.13 -3.24
Income (loss) from continuing operations 18.61% 10.02% 12.76% -5.69% 12.72%
Loss from discontinued operations, net of tax 0.00 0.00 0.00 -0.15 0.00
Net income (loss) 18.61% 10.02% 12.76% -5.84% 12.72%
Net income attributable to noncontrolling interest -1.14 -1.07 -1.00 -1.22 -0.83
Net income (loss) attributable to AT&T 17.47% 8.95% 11.76% -7.06% 11.89%
Preferred stock dividends and redemption gain -0.05 -0.17 -0.17 -0.17 -0.12
Net income (loss) attributable to common stock 17.42% 8.78% 11.59% -7.23% 11.77%

Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).

The common-size income statement reveals significant fluctuations in profitability and cost structure over the five-year period. Operating revenues are consistently represented as 100%, allowing for a clear view of how each line item contributes to the overall financial performance. A notable shift occurs in the composition of revenues, with service revenue decreasing from 86.69% to 80.51% while equipment revenue increases from 13.31% to 19.49%.

Cost of Revenues
Cost of revenues as a percentage of operating revenues demonstrates improvement, decreasing from -47.26% in 2021 to -40.45% in 2025. This suggests increasing efficiency in managing direct costs associated with providing services and equipment. However, the 'Other cost of revenues' component remains relatively stable, fluctuating between -18.50% and -22.23% before decreasing to -20.23% in 2025.
Gross Profit
As a result of the decreasing cost of revenues, gross profit improves considerably, rising from 52.74% in 2021 to 59.55% in 2025. This indicates a strengthening core business profitability.
Operating Income
Operating income exhibits substantial volatility. It begins at 13.83% in 2021, plunges to -3.80% in 2022, then recovers to 19.23% in 2025. The significant decline in 2022 is largely attributable to a substantial increase in 'Asset impairments and abandonments and restructuring' which reached -22.77% of operating revenues. This item returns to a much lower level in subsequent years.
Net Income
Net income mirrors the trend in operating income, experiencing a loss of -5.84% in 2022 before recovering to 18.61% in 2025. Net income attributable to AT&T follows a similar pattern, moving from 11.89% to -7.06% and then to 17.47%. The impact of preferred stock dividends remains relatively consistent, representing a small percentage of operating revenues.
Interest Expense
Interest expense remains relatively stable as a percentage of operating revenues, fluctuating between -4.08% and -5.52%. This suggests consistent debt financing costs over the period.
Other Income
Other income demonstrates considerable fluctuation. 'Other income (expense), net' increases from 5.83% to 6.17% over the period, while 'Other income (expense)' itself shows a shift from positive to negative values before returning to positive in 2025. This suggests changes in non-operating income sources.
Tax Rate
The effective tax rate, calculated as income tax expense divided by income before taxes, remains relatively consistent, fluctuating between -3.13% and -3.63% of operating revenues. This indicates a stable tax burden.

Overall, the financial performance demonstrates a recovery from a challenging 2022, driven by improved cost management and a reduction in significant restructuring charges. The increasing proportion of equipment revenue suggests a potential shift in the company’s business model. However, the volatility in operating income highlights the sensitivity of profitability to non-recurring items and external factors.