Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Book Value (P/BV) since 2005
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Profitability Ratios (Summary)
AT&T Inc., profitability ratios
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 profitability metrics demonstrate a period of volatility followed by substantial improvement. Initial figures reveal a decline in profitability between 2021 and 2022, with a subsequent recovery and continued growth through 2025. The gross profit margin exhibits consistent strength, while operating and net profit margins show more pronounced fluctuations.
- Gross Profit Margin
- The gross profit margin experienced an increase from 52.74% in 2021 to 57.89% in 2022, and continued to rise, peaking at 59.77% in 2024 before a slight decrease to 59.55% in 2025. This indicates improving efficiency in production or procurement costs over the period.
- Operating Profit Margin
- The operating profit margin decreased significantly from 13.83% in 2021 to -3.80% in 2022, suggesting increased operating expenses or decreased revenue. A strong recovery occurred in 2023, reaching 19.16%, followed by a decrease to 15.57% in 2024 and a further increase to 19.23% in 2025. This suggests successful cost management and revenue growth following the initial downturn.
- Net Profit Margin
- Mirroring the trend in operating profit, the net profit margin declined from 11.89% in 2021 to -7.06% in 2022. A substantial recovery was observed in 2023, reaching 11.76%, and continued growth to 8.95% in 2024 and a significant increase to 17.47% in 2025. This indicates improved overall profitability, influenced by both operational efficiency and potentially other income or expense factors.
- Return on Equity (ROE)
- The return on equity followed a similar pattern to the profit margins, decreasing from 12.07% in 2021 to -8.74% in 2022, then recovering to 13.94% in 2023, 10.49% in 2024, and reaching a high of 19.86% in 2025. This suggests increasing effectiveness in generating profits from shareholder investments.
- Return on Assets (ROA)
- The return on assets decreased from 3.64% in 2021 to -2.12% in 2022, then recovered to 3.54% in 2023, 2.77% in 2024, and increased to 5.22% in 2025. This indicates improving efficiency in utilizing assets to generate earnings.
Overall, the period began with a significant decline in profitability across all measured ratios, followed by a consistent and substantial recovery and growth trend through 2025. The improvements in operating and net profit margins, ROE, and ROA suggest successful strategic adjustments and improved financial performance in the later years of the observed period.
Return on Sales
Return on Investment
Gross Profit Margin
AT&T Inc., gross profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Gross profit | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Gross profit margin1 | ||||||
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
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).
1 2025 Calculation
Gross profit margin = 100 × Gross profit ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The gross profit margin exhibited an overall positive trend between 2021 and 2025, despite fluctuations in gross profit and operating revenues. Initial observation reveals a significant decrease in both gross profit and operating revenues from 2021 to 2022, followed by relative stability and modest growth through 2025.
- Gross Profit Margin Trend
- The gross profit margin increased from 52.74% in 2021 to 57.89% in 2022. This increase occurred concurrently with a substantial decline in operating revenues, suggesting a potentially aggressive cost management strategy or a shift in revenue mix towards higher-margin products or services. The margin continued to improve, reaching 59.06% in 2023 and peaking at 59.77% in 2024. A slight decrease to 59.55% was observed in 2025, but the margin remained significantly higher than the 2021 level.
- Gross Profit Analysis
- Gross profit decreased considerably from US$89,057 million in 2021 to US$69,893 million in 2022. However, it demonstrated resilience, increasing to US$72,305 million in 2023 and continuing to grow to US$73,115 million in 2024, before reaching US$74,828 million in 2025. This indicates a recovery and subsequent growth in the company’s ability to generate profit from its core operations, despite the initial revenue decline.
- Operating Revenues Analysis
- Operating revenues experienced a substantial decrease from US$168,864 million in 2021 to US$120,741 million in 2022. Following this decline, revenues showed modest growth, reaching US$122,428 million in 2023 and remaining relatively stable at US$122,336 million in 2024. A further increase to US$125,648 million was observed in 2025, suggesting a stabilization and eventual recovery in revenue generation.
The consistent improvement in gross profit margin, despite the initial revenue contraction, warrants further investigation into the underlying factors driving this performance. The modest revenue growth in the later years, coupled with a sustained high gross profit margin, suggests improved operational efficiency or a favorable shift in the company’s product/service portfolio.
Operating Profit Margin
AT&T Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income (loss) | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Operating Profit Margin, Sector | ||||||
| Telecommunication Services | ||||||
| Operating Profit Margin, Industry | ||||||
| Communication Services | ||||||
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).
1 2025 Calculation
Operating profit margin = 100 × Operating income (loss) ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial profitability declined sharply before recovering and stabilizing at a higher level. A detailed examination of the trends is presented below.
- Operating Profit Margin - Overall Trend
- The operating profit margin began at 13.83% in 2021. It experienced a substantial decrease in 2022, falling to -3.80%, indicating an operating loss. A strong recovery followed in 2023, with the margin rising to 19.16%. This upward trend continued, albeit at a slower pace, reaching 15.57% in 2024. The margin concluded the period with a further increase to 19.23% in 2025, demonstrating a return to levels comparable to those observed in 2023.
- Operating Income (Loss) and Revenue Relationship
- The negative operating profit margin in 2022 coincided with a reported operating loss of US$4,587 million, despite operating revenues of US$120,741 million. This suggests significant cost pressures or revenue declines that outweighed any cost-saving measures. Conversely, the positive margins in 2021, 2023, 2024, and 2025 were supported by positive operating income figures, with operating revenues remaining relatively stable between US$120,741 million and US$125,648 million.
- Volatility and Stabilization
- The period was characterized by considerable volatility in the operating profit margin, particularly between 2021 and 2024. However, the margin appears to have stabilized in the most recent year, 2025, with a value nearly identical to that of 2023. This stabilization may indicate the successful implementation of strategies to improve operational efficiency or a more predictable revenue environment.
In summary, the operating profit margin experienced a period of disruption followed by a recovery and eventual stabilization. The fluctuations were closely tied to changes in operating income, while operating revenues remained relatively consistent throughout the period.
Net Profit Margin
AT&T Inc., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| Net Profit Margin, Sector | ||||||
| Telecommunication Services | ||||||
| Net Profit Margin, Industry | ||||||
| Communication Services | ||||||
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).
1 2025 Calculation
Net profit margin = 100 × Net income (loss) attributable to AT&T ÷ Operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited significant fluctuation over the five-year period. Initial profitability decreased substantially before recovering and ultimately surpassing the initial level. A detailed examination of the trends is presented below.
- Net Profit Margin - Overall Trend
- The net profit margin began at 11.89% in 2021. A marked decline was observed in 2022, resulting in a negative margin of -7.06%. Subsequent years demonstrated recovery, with the margin increasing to 11.76% in 2023, 8.95% in 2024, and culminating in a substantial increase to 17.47% in 2025. This indicates a return to, and then an exceeding of, prior profitability levels.
- Net Income and Revenue Relationship
- The decrease in net profit margin in 2022 coincided with a significant reduction in operating revenues, from US$168,864 million in 2021 to US$120,741 million. While revenues experienced a modest increase in both 2023 and 2024, the substantial improvement in net profit margin in 2025 occurred alongside a further revenue increase to US$125,648 million. This suggests that factors beyond revenue growth, such as cost management or other income sources, played a crucial role in the margin expansion in 2025.
- Volatility and Recovery
- The period demonstrates considerable volatility in profitability. The negative margin in 2022 represents a period of loss, while the subsequent years show a clear recovery trajectory. The 2025 margin represents the highest level of profitability within the observed timeframe, indicating a potentially improved operational efficiency or a favorable shift in the business environment.
In summary, the net profit margin experienced a period of substantial decline followed by a robust recovery and eventual outperformance. The relationship between revenue and net income suggests that factors beyond revenue generation contributed significantly to the observed margin improvements, particularly in the final year of the period.
Return on Equity (ROE)
AT&T Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Stockholders’ equity attributable to AT&T | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| ROE, Sector | ||||||
| Telecommunication Services | ||||||
| ROE, Industry | ||||||
| Communication Services | ||||||
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).
1 2025 Calculation
ROE = 100 × Net income (loss) attributable to AT&T ÷ Stockholders’ equity attributable to AT&T
= 100 × ÷ =
2 Click competitor name to see calculations.
The return on equity (ROE) exhibited significant fluctuation over the five-year period. Initial values demonstrated a substantial decline followed by a recovery and subsequent increase, culminating in a peak in the final year examined.
- ROE Trend
- In 2021, the ROE stood at 12.07%. A marked decrease was observed in 2022, with the ROE falling to -8.74%, indicating a net loss relative to shareholders’ equity. A strong recovery occurred in 2023, as the ROE rose to 13.94%. This positive trend continued into 2024, with a ROE of 10.49%. The most significant increase occurred between 2024 and 2025, with the ROE reaching 19.86%.
- Net Income Relationship
- The fluctuations in ROE closely mirror the changes in net income attributable to the company. The negative ROE in 2022 directly corresponds to the reported net loss of US$8,524 million. The subsequent increases in ROE in 2023, 2024, and 2025 align with the positive net income figures of US$14,400 million, US$10,948 million, and US$21,953 million, respectively. This suggests that profitability is a primary driver of the observed ROE changes.
- Stockholders’ Equity Relationship
- Stockholders’ equity attributable to the company experienced a decrease from US$166,332 million in 2021 to US$97,500 million in 2022. It then began to recover, reaching US$103,297 million in 2023 and continuing to grow to US$104,372 million in 2024 and US$110,533 million in 2025. While equity fluctuations influence ROE, the substantial swings in net income appear to have had a more pronounced effect on the overall ROE values during this period.
Overall, the ROE demonstrates a volatile pattern, heavily influenced by net income performance. The substantial improvement in the final year suggests a strengthening of profitability relative to the equity base.
Return on Assets (ROA)
AT&T Inc., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to AT&T | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| T-Mobile US Inc. | ||||||
| Verizon Communications Inc. | ||||||
| ROA, Sector | ||||||
| Telecommunication Services | ||||||
| ROA, Industry | ||||||
| Communication Services | ||||||
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).
1 2025 Calculation
ROA = 100 × Net income (loss) attributable to AT&T ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited considerable fluctuation over the five-year period. Initial profitability, as measured by ROA, decreased significantly before recovering and ultimately demonstrating substantial improvement.
- Overall Trend
- The ROA began at 3.64% in 2021. A marked decline was observed in 2022, resulting in a negative ROA of -2.12%. Subsequent years showed recovery, with ROA increasing to 3.54% in 2023 and 2.77% in 2024. The most significant increase occurred between 2024 and 2025, with ROA reaching 5.22%.
- Net Income Impact
- The negative ROA in 2022 directly correlates with a net loss attributable to the company during that year. Conversely, the positive ROA values in 2021, 2023, 2024, and 2025 align with periods of net income. The substantial increase in ROA from 2024 to 2025 is associated with a notable increase in net income during that period.
- Asset Base Consideration
- Total assets decreased from 2021 to 2022, then remained relatively stable between 2022 and 2024. A slight increase in total assets was observed in 2025. While asset fluctuations influenced the ROA calculation, the primary driver of the observed trends appears to be changes in net income rather than significant shifts in the asset base.
In summary, the ROA demonstrates a volatile pattern, heavily influenced by net income performance. The company experienced a period of unprofitability in 2022, but subsequently returned to, and exceeded, its initial ROA level by 2025.