Stock Analysis on Net
Stock Analysis on Net

AT&T Inc. (NYSE:T)

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Common-Size Income Statement

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

Microsoft Excel
12 months ended: Dec 31, 2025 Dec 31, 2024 Dec 31, 2023 Dec 31, 2022 Dec 31, 2021
Service
Equipment
Operating revenues
Equipment
Broadcast, programming and operations
Other cost of revenues, exclusive of depreciation and amortization
Cost of revenues
Gross profit
Selling, general and administrative
Asset impairments and abandonments and restructuring
Depreciation and amortization
Operating income (loss)
Interest expense
Equity in net income of affiliates
Other income (expense), net
Other income (expense)
Income (loss) from continuing operations before income taxes
Income tax expense on continuing operations
Income (loss) from continuing operations
Loss from discontinued operations, net of tax
Net income (loss)
Net income attributable to noncontrolling interest
Net income (loss) attributable to AT&T
Preferred stock dividends and redemption gain
Net income (loss) attributable to common stock

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.