AT&T's Pascal Desroches Lifts 2026 Buyback to US$10bn

AT&T has turned a strong second quarter into a bigger payout for shareholders. On the group's earnings call on 22 July, Chief Financial Officer Pascal Desroches told investors the telco would lift its 2026 share buyback to roughly US$10bn, up from US$8bn, after free cash flow beat its own guidance.

Consolidated revenue rose 2.3% year on year and service revenue 2.7%, while adjusted earnings climbed more than 20% to US$0.65 a share. 

"Earlier this year, we provided an outlook for accelerated growth and execution of our strategy. That's exactly what we delivered in the second quarter," says John Stankey, Chairman and CEO of AT&T.

The case for buying back more

Pascal says the larger programme pulls forward repurchases the company had planned through 2028, taking advantage of what management sees as a gap between AT&T's operating performance and its share price.

Combined with the dividend, shareholder returns should reach about US$18bn this year, roughly matching free cash flow.

That call fits the arc of Pascal's tenure. Since 2021 he has pointed AT&T back at its core, overseeing the separation of DirecTV, the exit from media through the WarnerMedia-Discovery deal, a reset dividend and a steady paydown of debt, while pushing spending towards 5G and fibre. The buyback is the payoff of that repair, cash returned once the balance sheet could bear it.

He frames the finance job in the same spirit, as a partner to the business rather than a gatekeeper. "You can't be in an organisation where everybody's terrified of the CFO, it just doesn't work," he says.

Room to spend, then repair

AT&T ended the quarter with net debt at 2.68 times adjusted EBITDA, little changed on the first. Pascal says leverage would climb towards 3.2 times once the company closes its purchase of spectrum licences from EchoStar, expected by the end of July, before returning to a target near 2.5 times within about three years.

Behind the results is AT&T's bet on fibre and fixed wireless. Its Advanced Connectivity operation, which Pascal says accounts for more than 90% of service revenue, drove the quarter, helped by more than a million net new subscribers across fibre, fixed wireless and postpaid phones.

A parting act

The buyback raise is among the last big calls of Pascal's tenure. AT&T has confirmed he will retire on 31 December after more than five years as CFO, with Jennifer Biry, most recently CFO and Chief Operating Officer of McAfee and herself a former long-serving AT&T executive, succeeding him on 1 January.

"Along the way, I've learned that progress isn't linear," says Pascal in a LinkedIn post announcing his retirement. "It takes discipline, resilience, and, at times, the willingness to make difficult decisions in service of something bigger and longer term."

He leaves having steered AT&T's retreat from media back to telecoms and, in his final year, launched a capital-return plan aimed at a market he thinks undervalues the result.