Record iPhone activations helped AT&T (NYSE: T), the US’s largest phone company, report a third-quarter profit that beat analyst expectations. The company Q3 profits came in at $3.19 billion, or $0.54 a share, a slight dip from last year’s $3.23 billion, or $0.55 a share. Revenues were down 1.6 percent compared to last year to $30.9 billion. Analysts had expected $0.50 a share on $30.9 billion in revenue.

The wireless network provider gained 2 million new subscribers, lured once again by the iPhone. Analysts had been expecting 1.4 million. AT&T reported a “record” 3.2 million iPhone activations, its largest quarterly total to date, with nearly 40 percent of those activations coming from new subscribers to the network. AT&T now has a total of 81.6 million subscribers.

iPhone subscribers, however, come at a cost to AT&T in the form of subsidies as well as the need for infrastructure upgrades, but the company said those expenses were being offset by among other things “solid revenue growth, churn improvements…and growth in the company’s base of high-quality… subscribers.”