T-Mobile Delivers Industry-Leading Growth in Customers, Service Revenues, Profitability and Cash Flows in Q3, Raises 2024 Guidance Across the Board
T-Mobile (TMUS) reported outstanding Q3 2024 results with industry-leading growth across all key metrics. The company achieved its highest Q3 postpaid phone net additions in a decade with 865,000 new customers and lowest Q3 postpaid phone churn at 0.86%. Financial highlights include: service revenues up 5% YoY to $16.7B, net income growing 43% YoY to $3.1B, and record Adjusted Free Cash Flow of $5.2B, up 29% YoY. The company reached 6 million broadband customers and returned $1.4B to stockholders in Q3. Following these strong results, T-Mobile raised its full-year 2024 guidance across all metrics.
T-Mobile (TMUS) ha riportato risultati eccezionali per il terzo trimestre del 2024, evidenziando una crescita leader del settore in tutti i principali indicatori. L'azienda ha raggiunto il massimo aumento netto di clienti telefonici postpagati nel terzo trimestre degli ultimi dieci anni con 865.000 nuovi clienti e il più basso tasso di abbandono postpagato nel terzo trimestre, pari al 0,86%. I punti salienti finanziari includono: entrate dai servizi aumentate del 5% rispetto all'anno precedente, arrivando a $16,7 miliardi, un utile netto cresciuto del 43% su base annua a $3,1 miliardi, e un record di Flusso di Cassa Libero Rettificato di $5,2 miliardi, aumentato del 29% rispetto all'anno scorso. L'azienda ha raggiunto 6 milioni di clienti broadband e ha restituito $1,4 miliardi agli azionisti nel terzo trimestre. A seguito di questi risultati positivi, T-Mobile ha innalzato le previsioni per l'intero anno 2024 in tutti i settori.
T-Mobile (TMUS) reportó resultados excepcionales en el tercer trimestre de 2024, con un crecimiento líder en la industria en todos los indicadores clave. La compañía alcanzó su mayor adición neta de clientes de telefonía postpaga en un tercer trimestre en diez años, con 865,000 nuevos clientes y la tasa de cancelación de telefonía postpaga más baja en un tercer trimestre, del 0.86%. Los puntos destacados financieros incluyen: ingresos por servicios aumentados un 5% anual a $16.7 mil millones, ingreso neto creciendo un 43% interanual a $3.1 mil millones, y un récord de Flujo de Caja Libre Ajustado de $5.2 mil millones, un aumento del 29% interanual. La compañía alcanzó 6 millones de clientes de banda ancha y devolvió $1.4 mil millones a los accionistas en el tercer trimestre. Tras estos sólidos resultados, T-Mobile elevó su pronóstico anual 2024 en todos los indicadores.
T-Mobile (TMUS)는 모든 주요 지표에서 업계 최고의 성장을 이룬 2024년 3분기 뛰어난 결과를 발표했습니다. 회사는 10년 만에 3분기 유료 전화 고객 순 증가에서 865,000명의 신규 고객을 기록했으며, 0.86%의 가장 낮은 유료 전화 고객 이탈률을 달성했습니다. 재무 하이라이트에는 다음이 포함됩니다: 서비스 수익은 전년 대비 5% 증가한 167억 달러, 순이익은 전년 대비 43% 증가한 31억 달러, 그리고 조정된 자유 현금 흐름은 전년 대비 29% 증가한 52억 달러의 기록을 세웠습니다. 회사는 600만 명의 광대역 고객을 확보했으며 3분기에 주주에게 14억 달러를 배당했습니다. 이러한 강력한 결과에 따라 T-Mobile은 2024년 전체 연도 가이던스를 모든 지표에서 상향 조정했습니다.
T-Mobile (TMUS) a annoncé des résultats exceptionnels pour le troisième trimestre 2024, montrant une croissance leader dans l'industrie sur tous les indicateurs clés. L'entreprise a atteint sa plus forte augmentation nette de clients mobiles postpayés au troisième trimestre depuis dix ans avec 865 000 nouveaux clients et le taux de résiliation postpayé le plus bas au troisième trimestre, à 0,86%. Les faits saillants financiers incluent : les revenus de services en hausse de 5% par rapport à l'année précédente, atteignant 16,7 milliards de dollars, le résultat net augmentant de 43% d'une année sur l'autre, à 3,1 milliards de dollars, et un chiffre record de Flux de Trésorerie Disponible Ajusté de 5,2 milliards de dollars, en hausse de 29% par rapport à l'année dernière. L'entreprise a atteint 6 millions de clients de haut débit et a retourné 1,4 milliard de dollars aux actionnaires au troisième trimestre. Suite à ces résultats solides, T-Mobile a relevé ses prévisions annuelles 2024 sur tous les indicateurs.
T-Mobile (TMUS) meldete herausragende Ergebnisse für das dritte Quartal 2024 mit branchenführendem Wachstum in allen wichtigen Kennzahlen. Das Unternehmen erzielte die höchsten Netto-Neuzugänge an postpaid Telefonkunden im dritten Quartal seit einem Jahrzehnt mit 865.000 neuen Kunden und die niedrigste Churn-Rate für postpaid Telefone im dritten Quartal mit 0,86%. Die finanziellen Highlights umfassen: Dienstleistungsumsätze stiegen im Jahresvergleich um 5% auf 16,7 Milliarden USD, Nettoeinkommen wuchs um 43% im Jahresvergleich auf 3,1 Milliarden USD und ein Rekord von Bereinigtem Frei Cashflow von 5,2 Milliarden USD, was einer Steigerung von 29% im Jahresvergleich entspricht. Das Unternehmen erreichte 6 Millionen Breitbandkunden und gab im dritten Quartal 1,4 Milliarden USD an die Aktionäre zurück. Nach diesen starken Ergebnissen hob T-Mobile seine Jahresprognose 2024 in allen Kennzahlen an.
- Record Q3 postpaid phone net additions of 865,000, highest in a decade
- Net income increased 43% YoY to $3.1B
- Service revenues grew 5% YoY to $16.7B
- Record Adjusted Free Cash Flow of $5.2B, up 29% YoY
- Lowest Q3 postpaid phone churn rate in company history at 0.86%
- Returned $1.4B to stockholders through dividends and share repurchases
- Raised full-year 2024 guidance across all metrics
- None.
Insights
T-Mobile delivered exceptional Q3 results with remarkable growth across key metrics. Service revenues increased
The most impressive aspects include:
- Record Q3 postpaid phone net adds of 865,000
- Lowest-ever Q3 churn rate of
0.86% - Core Adjusted EBITDA growth of
9% to$8.2 billion - Record operating cash flow of
$6.1 billion
The company's strong capital return program, including
T-Mobile's market positioning continues to strengthen with industry-leading performance across all key metrics. The company's strategic focus on network quality and value proposition is yielding tangible results, particularly in the high-growth broadband segment where it reached 6 million customers. The combination of best-in-class network performance, validated by global recognition for 5G availability and competitive pricing is creating a sustainable competitive advantage.
The impressive customer metrics, including 315,000 new postpaid accounts and 1.6 million postpaid net additions, demonstrate T-Mobile's ability to capture market share while maintaining pricing discipline. This growth trajectory, coupled with declining churn rates, suggests strong potential for continued market share gains and revenue expansion.
Un-carrier Delivers Highest Q3 Postpaid Phone Net Customer Additions in a Decade, Lowest Q3 Postpaid Phone Churn in Company History and Hits 6 Million Broadband Customer Milestone
Industry-Leading Customer Growth Fueled by Best Network and Best Value Combination(1)
- Postpaid net account additions of 315 thousand, best in industry
- Postpaid net customer additions of 1.6 million, best in industry
- Postpaid phone net customer additions of 865 thousand, best in industry, highest Q3 in a decade
-
Postpaid phone churn of
0.86% , record low for Q3 - High Speed Internet net customer additions of 415 thousand, best in industry
Translating Industry-Leading Customer Growth into Industry-Leading Financial Performance
-
Service revenues of
$16.7 billion 5% year-over-year, best in industry growth -
Postpaid service revenues of
$13.3 billion 8% year-over-year, best in industry growth -
Net income of
$3.1 billion 43% year-over-year, best in industry growth -
Diluted earnings per share (“EPS”) of
$2.61 43% year-over-year, best in industry growth -
Core Adjusted EBITDA(2) of
$8.2 billion 9% year-over-year, best in industry growth -
Net cash provided by operating activities of
$6.1 billion 16% year-over-year, best in industry growth -
Adjusted Free Cash Flow(2) of
$5.2 billion 29% year-over-year, best in industry growth -
Returned
$1.4 billion $644 million $758 million $891 million
Extending Overall Network Lead with Best Assets, Customer Centricity and Technology Leadership
- For the fourth year in a row, T-Mobile won best 5G availability in the world and was the only US operator to earn a 5G Global Winner award for this category from Opensignal
- Largest Voice over New Radio (VoNR) coverage with more than 300 million Americans covered, further improving performance and spectral efficiency
T-Mobile US, Inc. (NASDAQ: TMUS) reported third quarter 2024 results today, raising full-year guidance across the board while delivering industry-leading customer growth, including its highest Q3 postpaid phone net customer additions in a decade, lowest Q3 postpaid phone churn in company history, and hitting 6 million broadband customers. The company translated best-in-class customer growth into industry-leading growth in service revenues, profitability and cash flows. T-Mobile shared plans to drive long-term value creation well into the future at its recent Capital Markets Day, with continued industry-leading growth in profitability leading to cash flows supporting an approximately
“Delivering another quarter of industry-leading results, including our best Q3 postpaid phone net adds in a decade and record low Q3 churn, translated into outsized financial results and empowered us to raise our 2024 guidance yet again,” said Mike Sievert, CEO of T-Mobile. “Results like these prove that our powerful combination of best-in-class network, unmatched value and innovative experiences for customers is a winning formula and will enable us to keep pace with our ambitious multi-year plan for the future. It's an exciting time at T-Mobile as we have so much runway in front of us for profitable, industry-leading growth into the next era of Un-carrier.”
| ____________________ | ||
(1) |
AT&T Inc. does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net customer additions. Industry-leading claims are based on consensus expectations if results are not yet reported. |
|
(2) |
Core Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables. We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect Net income, including, but not limited to, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable. |
|
Industry-Leading Customer Growth Fueled by Best Network and Best Value Combination(1)
- Postpaid net account additions of 315 thousand decreased 71 thousand year-over-year.
- Postpaid net customer additions of 1.6 million increased 349 thousand year-over-year.
-
Postpaid phone net customer additions of 865 thousand increased 15 thousand year-over-year. Postpaid phone churn of
0.86% improved 1 basis point year-over-year. -
Prepaid net customer additions of 24 thousand decreased 55 thousand year-over-year. Prepaid churn of
2.78% improved 3 basis points year-over-year. - High Speed Internet net customer additions of 415 thousand decreased 142 thousand year-over-year. T-Mobile ended the quarter with 6.0 million High Speed Internet customers.
- Total net customer additions of 1.6 million increased 294 thousand year-over-year. Total customer connections increased to a record high of 127.5 million.
|
Quarter |
|
Nine Months Ended
|
||||||||||||
(in thousands, except churn) |
Q3 2024 |
|
Q2 2024 |
|
Q3 2023 |
|
2024 |
|
2023 |
||||||
Postpaid net account additions |
315 |
|
301 |
|
386 |
|
834 |
|
972 |
|
|||||
Total net customer additions |
1,599 |
|
1,517 |
|
1,305 |
|
4,288 |
|
4,309 |
|
|||||
Postpaid net customer additions |
1,575 |
|
1,338 |
|
1,226 |
|
4,133 |
|
4,080 |
|
|||||
Postpaid phone net customer additions |
865 |
|
777 |
|
850 |
|
2,174 |
|
2,148 |
|
|||||
Postpaid other net customer additions (2) |
710 |
|
561 |
|
376 |
|
1,959 |
|
1,932 |
|
|||||
Prepaid net customer additions (2) |
24 |
|
179 |
|
79 |
|
155 |
|
229 |
|
|||||
Total customers, end of period (2) (3) |
127,492 |
|
125,893 |
|
117,907 |
|
127,492 |
|
117,907 |
|
|||||
Postpaid phone churn |
0.86 |
% |
0.80 |
% |
0.87 |
% |
0.84 |
% |
0.84 |
% |
|||||
Prepaid churn |
2.78 |
% |
2.54 |
% |
2.81 |
% |
2.69 |
% |
2.73 |
% |
|||||
High Speed Internet net customer additions |
415 |
|
406 |
|
557 |
|
1,226 |
|
1,589 |
|
|||||
Total High Speed Internet customers, end of period |
6,002 |
|
5,587 |
|
4,235 |
|
6,002 |
|
4,235 |
|
|||||
(1) |
AT&T Inc. does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net customer additions. Industry-leading claims are based on consensus expectations if results are not yet reported. |
|
(2) |
Includes High Speed Internet customers. |
|
(3) |
In the second quarter of 2024, we acquired 3,504,000 prepaid customers through our acquisition of Ka’ena, which includes the impact of certain base adjustments to align the policies of Ka’ena and T-Mobile. |
|
Translating Industry-Leading Customer Growth Into Industry-Leading Financial Performance(1)
-
Total service revenues of
$16.7 billion 5% year-over-year, and Postpaid service revenues of$13.3 billion 8% year-over-year. -
Net income of
$3.1 billion 43% year-over-year. -
Diluted EPS of
$2.61 43% year-over-year. -
Core Adjusted EBITDA of
$8.2 billion 9% year-over-year. -
Net cash provided by operating activities of
$6.1 billion 16% year-over-year, which included cash payments for Merger-related costs of$124 million -
Cash purchases of property and equipment, including capitalized interest, of
$2.0 billion 19% year-over-year. -
Adjusted Free Cash Flow of
$5.2 billion 29% year-over-year, which included cash payments for Merger-related costs of$124 million -
Stockholder Returns included 3.2 million shares of common stock repurchased for
$644 million $22.7 billion -
In Q4 through October 18, 2024, the company returned an additional
$891 million -
The remaining authorization for stock repurchases and quarterly cash dividends as of October 18, 2024 is
$6.4 billion -
The next dividend of
$0.88
-
In Q4 through October 18, 2024, the company returned an additional
|
Quarter |
Nine Months Ended
|
Q3 2024
|
Q3 2024
|
YTD 2024
|
|||||||||||||||||||
(in millions, except EPS) |
Q3 2024 |
Q2 2024 |
Q3 2023 |
2024 |
2023 |
|||||||||||||||||||
Total service revenues |
$ |
16,725 |
$ |
16,429 |
$ |
15,914 |
$ |
49,250 |
$ |
47,198 |
1.8 |
% |
5.1 |
% |
4.3 |
% |
||||||||
Postpaid service revenues |
|
13,308 |
|
12,899 |
|
12,288 |
|
38,838 |
|
36,220 |
3.2 |
% |
8.3 |
% |
7.2 |
% |
||||||||
Total revenues |
|
20,162 |
|
19,772 |
|
19,252 |
|
59,528 |
|
58,080 |
2.0 |
% |
4.7 |
% |
2.5 |
% |
||||||||
Net income |
|
3,059 |
|
2,925 |
|
2,142 |
|
8,358 |
|
6,303 |
4.6 |
% |
42.8 |
% |
32.6 |
% |
||||||||
Diluted EPS |
|
2.61 |
|
2.49 |
|
1.82 |
|
7.10 |
|
5.26 |
4.8 |
% |
43.4 |
% |
35.0 |
% |
||||||||
Adjusted EBITDA |
|
8,243 |
|
8,053 |
|
7,600 |
|
23,948 |
|
22,204 |
2.4 |
% |
8.5 |
% |
7.9 |
% |
||||||||
Core Adjusted EBITDA |
|
8,222 |
|
8,027 |
|
7,547 |
|
23,866 |
|
21,935 |
2.4 |
% |
8.9 |
% |
8.8 |
% |
||||||||
Net cash provided by operating activities |
|
6,139 |
|
5,521 |
|
5,294 |
|
16,744 |
|
13,700 |
11.2 |
% |
16.0 |
% |
22.2 |
% |
||||||||
Cash purchases of property and equipment, including capitalized interest |
|
1,961 |
|
2,040 |
|
2,424 |
|
6,628 |
|
8,214 |
(3.9 |
)% |
(19.1 |
)% |
(19.3 |
)% |
||||||||
Adjusted Free Cash Flow |
|
5,162 |
|
4,439 |
|
4,003 |
|
12,948 |
|
9,281 |
16.3 |
% |
29.0 |
% |
39.5 |
% |
||||||||
(1) |
Industry-leading claims are based on consensus expectations if results are not yet reported. |
|
Extending Overall Network Lead with Best Assets, Customer Centricity and Technology Leadership
T-Mobile’s combination of best network assets, customer centricity and technology leadership is expected to keep the company’s network years ahead of the competition well into the future. The company’s unique Customer-Driven-Coverage model employs AI based assessment of customer experiences utilizing T-Mobile’s network data in order to improve network performance, deliver higher customer satisfaction, and prioritize network investments where they matter most to customers. Additionally, T-Mobile operates the only scaled nationwide 5G stand-alone core with VoNR coverage now reaching more than 300 million people, further improving call quality, reducing latency and improving customer experiences. And as more new phones support advanced capabilities like VoNR and four-carrier aggregation to further increase spectral efficiency, the company will be able to further differentiate its network performance.
T-Mobile is the overall network leader, with the company continuing to earn third-party recognition for its overall network performance:
- Opensignal: In its latest 5G Global Mobile Network Experience report, for the fourth year in a row, T-Mobile was crowned the global leader in 5G availability and was the only US operator to win a 5G Global Winner award for any category.
Note: See 5G device, coverage, and access details at T-Mobile.com. Ookla awards: Based on analysis by Ookla® of Speedtest Intelligence® data for the |
Raising 2024 Guidance Across the Board
- Postpaid net customer additions are expected to be between 5.6 million and 5.8 million, an increase from prior guidance of 5.4 million to 5.7 million.
-
Core Adjusted EBITDA, which is Adjusted EBITDA less lease revenues, is expected to be between
$31.6 billion $31.8 billion $31.5 billion $31.8 billion -
Net cash provided by operating activities, including payments for Merger-related costs, is expected to be between
$22.0 billion $22.3 billion $21.8 billion $22.2 billion -
Cash purchases of property and equipment, including capitalized interest, are expected to be between
$8.8 billion $9.0 billion $8.7 billion $9.1 billion -
Adjusted Free Cash Flow, including payments for Merger-related costs, is expected to be between
$16.7 billion $17.0 billion $16.6 billion $17.0 billion
(in millions, except Postpaid net customer additions and Effective tax rate) |
Previous |
Current |
Change
|
|||||||||||
Postpaid net customer additions (thousands) |
|
5,400 |
|
5,700 |
|
5,600 |
|
5,800 |
|
150 |
||||
Net income (1) |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
||||
Effective tax rate |
|
|
|
|
~ |
(50) bps |
||||||||
Core Adjusted EBITDA (2) |
$ |
31,500 |
$ |
31,800 |
$ |
31,600 |
$ |
31,800 |
$ |
50 |
||||
Net cash provided by operating activities |
|
21,800 |
|
22,200 |
|
22,000 |
|
22,300 |
|
150 |
||||
Capital expenditures (3) |
|
8,700 |
|
9,100 |
|
8,800 |
|
9,000 |
|
— |
||||
Adjusted Free Cash Flow (4) |
|
16,600 |
|
17,000 |
|
16,700 |
|
17,000 |
|
50 |
||||
(1) |
T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income, including, but not limited to, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable. |
|
(2) |
Management uses Core Adjusted EBITDA as a measure to monitor the financial performance of Company operations, excluding the impact of lease revenues from related device financing programs. Guidance ranges assume lease revenues of approximately |
|
(3) |
Capital expenditures means cash purchases of property and equipment, including capitalized interest. |
|
(4) |
Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024. |
|
Financial Results
For more details on T-Mobile’s Q3 2024 financial results, including the Investor Factbook with detailed financial tables, please visit T-Mobile US, Inc.’s Investor Relations website at https://investor.t-mobile.com.
Earnings Call Information
Date/Time
- Wednesday, October 23, 2024, at 4:30 p.m. (EDT)
Pre-registration link for dial-in access
Participants can pre-register for the conference call here in order to receive dial-in information.
Access via Phone (audio only)
Please plan on accessing the call 10 minutes prior to the scheduled start time.
- Toll Free: 1-866-777-2509
- International: 1-412-317-5413
Access via Webcast
The earnings call will be broadcasted live and can be replayed via the Investor Relations website at https://investor.t-mobile.com.
Submit Questions via X
Send a post to @TMobileIR or @MikeSievert using $TMUS
Contact Information
- Media Relations: mediarelations@t-mobile.com
- Investor Relations: investor.relations@t-mobile.com
T-Mobile Social Media
Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We also intend to use certain social media accounts as a means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR X account (https://x.com/TMobileIR), the @MikeSievert X account (https://x.com/MikeSievert), which Mr. Sievert also uses as a means for personal communications and observations, and the @TMobileCFO X account (https://x.com/tmobilecfo), and our CFO’s LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr. Osvaldik also uses as a means for personal communication and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.
About T-Mobile US, Inc.
T-Mobile US, Inc. (NASDAQ: TMUS) is America’s supercharged Un-carrier, delivering an advanced 4G LTE and transformative nationwide 5G network that will offer reliable connectivity for all. T-Mobile’s customers benefit from its unmatched combination of value and quality, unwavering obsession with offering them the best possible service experience and undisputable drive for disruption that creates competition and innovation in wireless and beyond. Based in
Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including information concerning T-Mobile US, Inc.’s future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions.
Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity; criminal cyberattacks, disruption, data loss or other security breaches; our inability to take advantage of technological developments on a timely basis; our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture; system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems; the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use; the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp. (“SoftBank”) and DISH with the
T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
This Press Release includes non-GAAP financial measures. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below. T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP net income, including, but not limited to, Income tax expense and Interest expense. Adjusted EBITDA and Core Adjusted EBITDA should not be used to predict Net income as the difference between either of these measures and Net income is variable.
Adjusted EBITDA and Core Adjusted EBITDA are reconciled to Net income as follows:
|
Quarter |
|
Nine Months Ended
|
|||||||||||||||||||||||||||||||||
(in millions) |
Q1 2023 |
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
2023 |
|
2024 |
|||||||||||||||||||
Net income |
$ |
1,940 |
|
$ |
2,221 |
|
$ |
2,142 |
|
$ |
2,014 |
|
$ |
2,374 |
|
$ |
2,925 |
|
$ |
3,059 |
|
$ |
6,303 |
|
$ |
8,358 |
|
|||||||||
Adjustments: |
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
Interest expense, net |
|
835 |
|
|
861 |
|
|
790 |
|
|
849 |
|
|
880 |
|
|
854 |
|
|
836 |
|
|
2,486 |
|
|
2,570 |
|
|||||||||
Other (income) expense, net |
|
(9 |
) |
|
(6 |
) |
|
(41 |
) |
|
(12 |
) |
|
(20 |
) |
|
8 |
|
|
(7 |
) |
|
(56 |
) |
|
(19 |
) |
|||||||||
Income tax expense |
|
631 |
|
|
717 |
|
|
705 |
|
|
629 |
|
|
764 |
|
|
843 |
|
|
908 |
|
|
2,053 |
|
|
2,515 |
|
|||||||||
Operating income |
|
3,397 |
|
|
3,793 |
|
|
3,596 |
|
|
3,480 |
|
|
3,998 |
|
|
4,630 |
|
|
4,796 |
|
|
10,786 |
|
|
13,424 |
|
|||||||||
Depreciation and amortization |
|
3,203 |
|
|
3,110 |
|
|
3,187 |
|
|
3,318 |
|
|
3,371 |
|
|
3,248 |
|
|
3,151 |
|
|
9,500 |
|
|
9,770 |
|
|||||||||
Stock-based compensation (1) |
|
173 |
|
|
155 |
|
|
152 |
|
|
164 |
|
|
140 |
|
|
147 |
|
|
143 |
|
|
480 |
|
|
430 |
|
|||||||||
Merger-related costs (gain), net (2) |
|
358 |
|
|
276 |
|
|
152 |
|
|
248 |
|
|
130 |
|
|
(9 |
) |
|
— |
|
|
786 |
|
|
121 |
|
|||||||||
Legal-related (recoveries) expenses, net (3) |
|
(43 |
) |
|
— |
|
|
— |
|
|
1 |
|
|
— |
|
|
15 |
|
|
1 |
|
|
(43 |
) |
|
16 |
|
|||||||||
(Gain) loss on disposal group held for sale |
|
(42 |
) |
|
17 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(25 |
) |
|
— |
|
|||||||||
Other, net (4) |
|
153 |
|
|
54 |
|
|
513 |
|
|
13 |
|
|
13 |
|
|
22 |
|
|
152 |
|
|
720 |
|
|
187 |
|
|||||||||
Adjusted EBITDA |
|
7,199 |
|
|
7,405 |
|
|
7,600 |
|
|
7,224 |
|
|
7,652 |
|
|
8,053 |
|
|
8,243 |
|
|
22,204 |
|
|
23,948 |
|
|||||||||
Lease revenues |
|
(147 |
) |
|
(69 |
) |
|
(53 |
) |
|
(43 |
) |
|
(35 |
) |
|
(26 |
) |
|
(21 |
) |
|
(269 |
) |
|
(82 |
) |
|||||||||
Core Adjusted EBITDA |
$ |
7,052 |
|
$ |
7,336 |
|
$ |
7,547 |
|
$ |
7,181 |
|
$ |
7,617 |
|
$ |
8,027 |
|
$ |
8,222 |
|
$ |
21,935 |
|
$ |
23,866 |
|
|||||||||
(1) |
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense in the Condensed Consolidated Financial Statements. Additionally, certain stock-based compensation expenses associated with the merger with Sprint Corporation (the “Merger”) have been included in Merger-related costs (gain), net. |
|
(2) |
Merger-related costs (gain), net, for the nine months ended September 30, 2024, includes the |
|
(3) |
Legal-related (recoveries) expenses, net consists of the settlement of certain litigation associated with the August 2021 cyberattack, net of insurance recoveries. |
|
(4) |
Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, including severance and related costs associated with the August 2023 workforce reduction, not directly attributable to the Merger, which are not reflective of T-Mobile’s core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA. |
|
Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain expenses, gains and losses, which are not reflective of our ongoing operating performance (“Special Items”). Special Items include Merger-related costs (gain), net, (Gain) loss on disposal groups held for sale, certain legal-related recoveries and expenses, restructuring costs not directly attributable to the Merger (including severance), and other non-core gains and losses. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Core Adjusted EBITDA and Adjusted EBITDA are non-GAAP financial measures utilized by T-Mobile’s management to monitor the financial performance of our operations. T-Mobile uses Core Adjusted EBITDA and Adjusted EBITDA as benchmarks to evaluate T-Mobile’s operating performance in comparison to its competitors. T-Mobile also uses Core Adjusted EBITDA internally as a measure to evaluate and compensate its personnel and management for their performance. Management believes analysts and investors use Core Adjusted EBITDA and Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of T-Mobile’s ongoing operating performance and trends by excluding the impact of Interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation, and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the related depreciation expense on leased devices, which is excluded from the definition of Adjusted EBITDA. Core Adjusted EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for Net income or any other measure of financial performance reported in accordance with
T-Mobile US, Inc.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued)
(Unaudited)
Adjusted Free Cash Flow is calculated as follows:
|
Quarter |
|
Nine Months Ended
|
|||||||||||||||||||||||||||||||||
(in millions, except percentages) |
Q1 2023 |
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
2023 |
|
2024 |
|||||||||||||||||||
Net cash provided by operating activities |
$ |
4,051 |
|
$ |
4,355 |
|
$ |
5,294 |
|
$ |
4,859 |
|
$ |
5,084 |
|
$ |
5,521 |
|
$ |
6,139 |
|
$ |
13,700 |
|
$ |
16,744 |
|
|||||||||
Cash purchases of property and equipment, including capitalized interest |
|
(3,001 |
) |
|
(2,789 |
) |
|
(2,424 |
) |
|
(1,587 |
) |
|
(2,627 |
) |
|
(2,040 |
) |
|
(1,961 |
) |
|
(8,214 |
) |
|
(6,628 |
) |
|||||||||
Proceeds from sales of tower sites |
|
6 |
|
|
2 |
|
|
2 |
|
|
2 |
|
|
— |
|
|
— |
|
|
— |
|
|
10 |
|
|
— |
|
|||||||||
Proceeds related to beneficial interests in securitization transactions |
|
1,345 |
|
|
1,309 |
|
|
1,131 |
|
|
1,031 |
|
|
890 |
|
|
958 |
|
|
984 |
|
|
3,785 |
|
|
2,832 |
|
|||||||||
Adjusted Free Cash Flow |
$ |
2,401 |
|
$ |
2,877 |
|
$ |
4,003 |
|
$ |
4,305 |
|
$ |
3,347 |
|
$ |
4,439 |
|
$ |
5,162 |
|
$ |
9,281 |
|
$ |
12,948 |
|
|||||||||
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) |
|
26.1 |
% |
|
27.7 |
% |
|
33.3 |
% |
|
30.3 |
% |
|
31.6 |
% |
|
33.6 |
% |
|
36.7 |
% |
|
29.0 |
% |
|
34.0 |
% |
|||||||||
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) |
|
15.4 |
% |
|
18.3 |
% |
|
25.2 |
% |
|
26.8 |
% |
|
20.8 |
% |
|
27.0 |
% |
|
30.9 |
% |
|
19.7 |
% |
|
26.3 |
% |
|||||||||
Adjusted Free Cash Flow - Net cash provided by operating activities less Cash purchases of property and equipment, plus Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions. Adjusted Free Cash Flow is utilized by T-Mobile’s management, investors and analysts to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
Adjusted Free Cash Flow margin - Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow Margin is utilized by T-Mobile’s management, investors, and analysts to evaluate the company’s ability to convert service revenue efficiently into cash available to pay debt, repurchase shares and provide further investment in the business.
The current guidance range for Adjusted Free Cash Flow is calculated as follows:
|
FY 2024 |
|||||||
(in millions) |
Guidance Range |
|||||||
Net cash provided by operating activities |
$ |
22,000 |
|
$ |
22,300 |
|
||
Cash purchases of property and equipment, including capitalized interest |
|
(8,800 |
) |
|
(9,000 |
) |
||
Proceeds related to beneficial interests in securitization transactions (1) |
|
3,500 |
|
|
3,700 |
|
||
Adjusted Free Cash Flow |
$ |
16,700 |
|
$ |
17,000 |
|
||
(1) |
Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024. |
|
The previous guidance range for Adjusted Free Cash Flow was calculated as follows:
|
FY 2024 |
|||||||
(in millions) |
Guidance Range |
|||||||
Net cash provided by operating activities |
$ |
21,800 |
|
$ |
22,200 |
|
||
Cash purchases of property and equipment, including capitalized interest |
|
(8,700 |
) |
|
(9,100 |
) |
||
Proceeds related to beneficial interests in securitization transactions (1) |
|
3,500 |
|
|
3,900 |
|
||
Adjusted Free Cash Flow |
$ |
16,600 |
|
$ |
17,000 |
|
||
(1) |
Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2024. |
|
T-Mobile US, Inc.
Operating Measures
(Unaudited)
The following table sets forth company operating measures ARPA and ARPU:
|
Quarter |
|
Nine Months Ended
|
||||||||||||||||||||||||
(in dollars) |
Q1 2023 |
|
Q2 2023 |
|
Q3 2023 |
|
Q4 2023 |
|
Q1 2024 |
|
Q2 2024 |
|
Q3 2024 |
|
2023 |
|
2024 |
||||||||||
Postpaid ARPA |
$ |
138.04 |
$ |
138.94 |
$ |
139.83 |
$ |
140.23 |
$ |
140.88 |
$ |
142.54 |
$ |
145.60 |
$ |
138.94 |
$ |
143.02 |
|||||||||
Postpaid phone ARPU |
|
48.63 |
|
48.84 |
|
48.93 |
|
48.91 |
|
48.79 |
|
49.07 |
|
49.79 |
|
48.80 |
|
49.22 |
|||||||||
Prepaid ARPU |
|
37.98 |
|
37.98 |
|
38.18 |
|
37.55 |
|
37.18 |
|
35.94 |
|
35.81 |
|
38.05 |
36.27 |
||||||||||
Postpaid Average Revenue Per Account (Postpaid ARPA) - Average monthly postpaid service revenue earned per account. Postpaid service revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period.
Average Revenue Per User (ARPU) - Average monthly service revenue earned per customer. Service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period.
Postpaid phone ARPU excludes postpaid other customers and related revenues.
View source version on businesswire.com: https://www.businesswire.com/news/home/20241022177290/en/
Media Relations: mediarelations@t-mobile.com
Investor Relations: investor.relations@t-mobile.com
Source: T-Mobile US, Inc.
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