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AT&T Beats Subscriber Forecasts as iPhone Deals and Bundled Plans Boost Growth

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AT&T added more new wireless customers than expected in the third quarter, lifted by bundled service discounts and aggressive iPhone 17 promotions that helped it compete in a crowded U.S. telecom market. However, the company’s shares fell about 2% on Wednesday after slightly missing revenue estimates due to weaker equipment sales.

The September quarter is a key period for wireless carriers, coinciding with Apple’s annual iPhone release, when firms battle fiercely to win subscribers. AT&T rolled out generous trade-in offers and upgrade incentives to draw new users and push existing ones toward higher-tier plans.

The company reported 405,000 new postpaid wireless subscribers, surpassing FactSet’s estimate of 334,100, while equipment revenue from its mobility division rose 6.1% to $4.79 billion, slightly below Visible Alpha’s forecast of $4.93 billion. Operating costs climbed 3.8%, driven by pricier phones and heavier marketing expenses.

Analysts said the fourth quarter could see an even sharper rise in customer upgrades during the holiday season, pressuring profit margins. MoffettNathanson noted that “a normalization of upgrade rates” could increase churn and reduce average revenue per user (ARPU).

To retain customers, AT&T has leaned on its bundled fiber and wireless offerings, offering discounts to multi-service subscribers. The strategy is paying off: over 41% of AT&T’s fiber broadband customers now also use its mobile service, and broadband net additions of 558,000 marked the company’s best performance in over eight years.

Still, revenue from AT&T’s business wireline unit fell 7.8%, reflecting ongoing declines in legacy voice and data products.

On an adjusted basis, the company earned $0.54 per share, matching analyst expectations. Total revenue came in at $30.7 billion, just shy of the $30.87 billion forecast.

While the results highlight AT&T’s subscriber momentum, analysts warn that the coming upgrade surge could test the sustainability of its current growth strategy.

Tesla Set for Strong Quarter as Buyers Rush to Beat Expiring U.S. EV Tax Credit

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Tesla is expected to post a strong third-quarter performance, boosted by a surge in U.S. sales as customers rushed to buy electric vehicles before the $7,500 federal EV tax credit expired. The results, due later on Wednesday, will be closely watched for signals on how CEO Elon Musk plans to sustain growth amid tightening competition and political controversy.

The company’s new, cheaper “Standard” versions of its Model 3 and Model Y have driven fresh demand. These models are roughly $5,000 to $5,500 cheaper than earlier trims, featuring smaller batteries, weaker motors, and stripped-down interiors that omit rear screens and seat pockets. Tesla also temporarily reduced lease prices on premium versions to clear inventory.

However, these aggressive price cuts and feature reductions have squeezed profit margins, a growing concern for investors. Analysts estimate Tesla’s automotive gross margin, excluding regulatory credits, will fall to 15.6%, down from 17.05% a year earlier.

Tesla’s overall revenue is expected to rise 4.2% year-on-year to $26.24 billion, according to LSEG data, though analysts will also look for signs that sales of pollution credits — which Tesla sells to gasoline carmakers — have tapered off following Trump administration policy changes.

Beyond financials, investors are eager for updates on Tesla’s robotaxi rollout, which Musk has described as the company’s next growth engine. He has claimed Tesla’s robotaxis could serve half the U.S. population by year-end, though specifics remain elusive. Analysts at Cantor Fitzgerald said the top questions now involve “fleet size, cumulative miles, and service territories” expected by Q4 and 2026.

Despite a slowdown in sales of its aging lineup and consumer backlash linked to Musk’s far-right political rhetoric, Tesla shares have risen nearly 10% this year, buoyed by a proposed $1 trillion pay package for Musk. Still, Tesla remains one of the weaker performers among the “Magnificent 7” tech giants.

The earnings call, set for 5:30 p.m. EDT, may offer a clearer view of how Musk plans to balance his AI and robotics ambitions with Tesla’s core vehicle business — the source of most of its revenue today.

Synopsys Misses Q3 Revenue Estimates, Shares Plunge 18%

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Chip design software provider Synopsys (SNPS.O) reported third-quarter revenue that fell short of Wall Street expectations, dragged down by weakness in its Design IP business, sending its stock down nearly 18.5% after hours.

Results and Outlook

  • Q3 Revenue: $1.74 billion vs. $1.77 billion expected (LSEG data)

  • Adjusted EPS: $3.39 vs. $3.74 expected

  • Q4 Guidance: $2.23–$2.26 billion revenue (above $2.09 billion consensus)

Key Pressures

  • Design IP Weakness: Includes interface, security, and embedded processor IP, plus implementation services.

  • Deal Fallout: Several deals failed to close due to:

    • U.S. export restrictions on China disrupting design starts

    • A major foundry customer canceling projects amid market and client-related challenges

  • CEO Sassine Ghazi: Said Synopsys had invested heavily in building IP for the foundry, but returns expected in 2H 2025 will now not materialize.

Strategic Moves

  • Ansys Acquisition: Completed $35B cash-and-stock purchase of engineering design firm Ansys in July after global antitrust reviews, including conditional approval in China.

  • Customer Base: Partners include Nvidia, Intel, and Qualcomm, among others.

Market Context

  • Rival Cadence Design Systems (CDNS.O): Raised its 2025 sales and profit forecast in July, highlighting diverging performance in the EDA software sector.

  • Synopsys’ miss underscores ongoing geopolitical risks and dependence on key customers in a competitive industry where regulatory headwinds are reshaping chip design markets.