AT&T ( NYSE: T ) reported their Q4 2020 earnings on January 27, 2021 and CEO John Stankey summed up the discussions with “resilient.” Despite the challenges with COVID, the adjusted earnings per share for AT&T was $0.75 vs $0.73 beating the expectations. In comparison to Q4 2019, operating income was down 26.5%.

Like most companies in 2020, COVID had an impact on earnings in comparison to prior years quarter, but was able to beat the analyst expectations of $44.55B. In comparison to 2019, however, revenues fell short by 2.4%.

Although earnings and revenue appear to be slightly lower than the prior year, AT&T had an overall solid quarter. Let’s look at one of the bright spots from Q4, giving us a look into AT&T’s future with subscriber growth.

One of the bright spots for AT&T is subscribers related to phone, fiber, and HBO. Phone subscribers grew from 63.5M in Q3 to 64.2M in Q4. Phones are an important add for AT&T, but I do not expect a high growth rate here. Regardless, with smartphones beginning to ride the 5G wave, my expectations are continued growth in phone subscribers.

With regards to Fiber subscribers, the net adds in Q4 were 273,000. The overall year added 1M+ subscribers and AT&T has gained 6% more market penetration since Q4 2019 to a total of 34% of the market.

I expect the fiber numbers to grow as more people continue to work from home and the economy begins to recover. In addition, those who are cutting the chords on the traditional TV services and opting for services like Youtube TV, will also have an impact on the need for faster connections.

Last but not least, HBO and HBO Max subscribers. Seven months after launching, HBO max had more than 41 million subscribers two years ahead of the company’s October 2019 plan. This is big news.

AT&T bought WarnerMedia in 2018 for $85 billion, which included DirectTV as a part of the deal. DirectTV was criticized by many and has not produced sufficient value for AT&T. Although, having HBO as a part of the deal, I believe with many loyal customers, in the long run it will be a good source of recurring revenue.

Our resilient portfolio of subscription businesses continued to generate strong cash flows, more than $27 billion, to support our ability to invest in our growth areas and sustain the dividend.

CEO, John Stankey

Moving forward, the subscriber growth is a key metric to keep an eye on. If we continue to see growth ub subscribers, it will lead to higher cashflow to support paying down the high levels of debt and invest where it matters most to shareholders.

At the time of publication, the author of this article holds shares of AT&T.