T Mobile US ((TMUS)) has held its Q3 earnings call. Read on for the main highlights of the call.
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T-Mobile US recently held its earnings call, revealing a robust quarter characterized by record-breaking customer growth, industry-leading financial performance, and significant strides in broadband. Despite increased costs associated with mergers and network expenses, the company remains optimistic about its growth trajectory, as evidenced by its raised guidance for 2025.
Record-Breaking Customer Growth
T-Mobile achieved unprecedented postpaid customer account growth, adding over 1 million postpaid phone net additions, marking the best third quarter in over a decade. This milestone underscores the company’s strong market presence and ability to attract new customers.
Industry-Leading Financial Growth
The company reported a 12% year-over-year increase in postpaid service revenue, with total service revenue rising by 9% and core adjusted EBITDA growing by 6%. T-Mobile’s free cash flow conversion stood at an impressive 26%, highlighting its financial strength and operational efficiency.
Significant Advancements in Broadband
T-Mobile led the industry with over 500,000 customer additions on 5G broadband and more than 50,000 on fiber. The company noted that the 5G broadband ARPUs and customer lifetime values are comparable to those of the postpaid phone business, indicating a successful expansion into broadband services.
Increased Guidance for 2025
The company raised its expectations for total postpaid net additions to between 7.2 and 7.4 million, with postpaid phone net additions projected to reach 3.3 million. T-Mobile also anticipates postpaid ARPA growth of at least 3.5% for the full year, reflecting confidence in continued market momentum.
Increased Costs Due to Mergers
T-Mobile expects approximately $300 million in costs in the fourth quarter related to merger activities with UScellular. These expenses will be excluded from the core adjusted EBITDA, indicating a strategic focus on long-term growth despite short-term financial impacts.
Additional Network Expenses
The company anticipates around $160 million in additional expenses in the fourth quarter related to cell site decommissioning as part of its network transformation initiatives. This investment is aimed at enhancing network capabilities and supporting future growth.
Forward-Looking Guidance
During the earnings call, T-Mobile’s management provided an optimistic outlook for the future. They increased their guidance for total postpaid net additions and postpaid phone net additions, driven by strong market momentum. The company also raised its fiber customer net additions guidance, reflecting the success of its T-Fiber rollout. Financially, T-Mobile expects robust cash conversion and financial health, with adjusted free cash flow projected to range from $17.8 billion to $18 billion.
In summary, T-Mobile’s earnings call conveyed a positive sentiment, highlighting record-breaking customer growth and industry-leading financial performance. Despite increased costs from mergers and network expenses, the company’s raised guidance for 2025 underscores its confidence in continued success and market leadership.