T-Mobile US, Inc. (TMUS)·Q2 2025 Earnings Summary

Executive Summary

• T-Mobile delivered a record Q2 with service revenues up 6% YoY to $17.44B, net income up 10% YoY to $3.22B, and diluted EPS at $2.84 (+14% YoY), translating outsized customer growth into financial strength . Management raised full-year guidance for total postpaid net adds, Core Adjusted EBITDA, operating cash flow, and adjusted FCF .
• Best-ever Q2 total postpaid and postpaid phone net adds (1.73M and 830k, respectively); 5G broadband net adds of 454k and total customers reaching 132.78M . Postpaid ARPA rose to $149.87 and postpaid phone ARPU to $50.62 .
• Guidance catalysts and strategic updates: multi-year SMB MVNO partnership with Charter and Comcast (launch in 2026), commercial launch of T‑Satellite, UScellular closing targeted for Aug 1, and fiber expansion via Lumos and Metronet JV (targeting ~100k fiber net adds in 2025) .
• Street consensus via S&P Global for Q2 2025 was unavailable through our tool; estimate comparisons could not be made. Results and guidance upgrades are likely estimate-raising catalysts for sell-side models (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well

• Record customer growth and ARPA momentum: “Our results were…fantastic…we smashed our own records,” with ARPA growth “up over 5%, our highest growth in eight years” and “customers…selecting our new Experience Beyond plan at more than double the rate of Go5G Next” .
• Network leadership and new services: First nationwide 5G Advanced and commercial T‑Satellite launch, widening network lead and enabling differentiated enterprise slicing and priority services .
• Strong cash generation and shareholder returns: Adjusted FCF of $4.60B (+4% YoY) and $3.5B returned in Q2 (buybacks + dividend), cumulative returns $38.3B since program inception .

What Went Wrong

• Churn and prepaid softness: Postpaid phone churn rose 10 bps YoY to 0.90% (rate plan optimization impact); prepaid net adds fell YoY to 39k .
• Equipment cost pressure: Cost of equipment sales up 14% YoY due to higher average cost per device with a mix shift to high-end phones; equipment revenues decreased 7% sequentially .
• Wholesale headwinds: Decrease in wholesale and other service revenues YoY driven by lower MVNO (DISH, TracFone) and ACP revenues, partially offset by other growth areas .

Financial Results

Note: We attempted to retrieve S&P Global consensus via our estimates tool; data was unavailable for Q2 2025.

Guidance Changes

Context: CFO noted 2026 cash tax benefit of ~$1.5B from recent legislation; guidance excludes UScellular and includes Metronet, with Q3 Core Adj. EBITDA guide ~$8.5B amid accelerated investments .

Earnings Call Themes & Trends

Management Commentary

• “We led the industry in both customer growth and in financial growth…we smashed our own records.” — Mike Sievert, CEO .
• “We now expect core adjusted EBITDA to be between $33.3–$33.7B…Q3 core adjusted EBITDA ~ $8.5B as we accelerate investments.” — Peter Osvaldik, CFO .
• “We launched our groundbreaking T‑Satellite service commercially…further extending our network to connect customers in the 500,000 sq mi…not covered terrestrially by anyone.” — Mike Sievert .
• “Postpaid ARPA growth…fabulously well…customers are really appreciating the value…self-selecting up the tiers to our most premium tier.” — Peter Osvaldik .
• “Charter and Comcast…entered into a multi-year exclusive agreement with T‑Mobile to utilize its network to deliver mobile services to their business customers.” — Press release .

Q&A Highlights

• Churn outlook: Q2 churn elevated due to rate plan optimizations; sequential improvement expected in Q3; YoY flat to slightly up .
• Fiber plan and contribution: ~100k fiber net adds in 2025 (JVs + wholesale); retail experience fully owned; neutral to EBITDA/FCF in 2025; distributions expected from JV before 2030 under Metronet case .
• SMB MVNO: Exclusive Charter/Comcast MVNO for <1,000-line SMB customers; incremental to TMUS exposure; consumer MVNO not in scope .
• 800 MHz licenses: Agreement with Grain for $2.9B cash plus 600 MHz licenses; potential ~$850M incremental income taxes; accretive and outside base guidance .
• 5G Broadband model: Fallow capacity remains center of gravity; ongoing innovations (L4S, SA slicing) to extract more capacity; 12M customer target for 2028 remains .

Estimates Context

• We attempted to retrieve S&P Global consensus for Q2 2025 (EPS, revenue, EBITDA, estimate counts). Data was unavailable via our tool for the specified period; therefore, we cannot quantify beats/misses versus consensus (S&P Global consensus unavailable).

Key Takeaways for Investors

• Durable growth flywheel intact: ARPA/ARPU up, premium tier adoption accelerating, and record net adds translate into higher service revenue and margin stability .
• Guidance raise across customer and cash metrics indicates momentum likely to carry into 2H, with Q3 EBITDA investment cadence flagged; expect Street models to drift higher (estimates unavailable) .
• Strategic catalysts: SMB MVNO with Charter/Comcast, commercial T‑Satellite, UScellular closing, and T‑Fiber scaling provide multi-year revenue and share gains across consumer and enterprise .
• Watch churn normalization: Temporary churn elevation from plan optimizations should abate in Q3; monitor sequential churn and net add quality (CLV) .
• Equipment cost/mix pressure persists (high-end phones); offset by pricing/ARPU dynamics; monitor equipment margins and SG&A (spectrum sale gains netted) .
• Wholesale/MVNO headwinds remain, but underlying growth and T‑Ads/Vistar trajectory help diversify; 2025 remains the wholesale trough year per prior commentary .
• Capital allocation flexibility: 2.5x leverage target maintained; ongoing buybacks, dividends, and portfolio moves (spectrum trades, fiber JVs) support shareholder returns while funding growth .

Non‑GAAP note: Core Adjusted EBITDA and Adjusted Free Cash Flow are non‑GAAP measures; reconciliations provided in press release and 8‑K exhibits .