Core Insights - T-Mobile, US, Inc. (TMUS) reported strong fourth-quarter 2024 results, with both net income and revenues exceeding Zacks Consensus Estimates, driven by significant postpaid customer growth [1][3][4] Financial Performance - Net income for Q4 2024 was $2.98 billion or $2.57 per share, a 48% increase from $2.01 billion or $1.67 per share in Q4 2023, surpassing the consensus estimate of $2.17 [3] - Total revenues for Q4 2024 reached $21.87 billion, up from $20.47 billion in the same quarter last year, beating the consensus estimate of $21.17 billion [4] - For the full year 2024, TMUS reported net income of $11.3 billion or $9.66 per share, compared to $8.4 billion or $6.93 per share in 2023 [3] Revenue Segments - Total service revenues were $16.92 billion in Q4 2024, up from $16.04 billion year-over-year, driven by strong demand for postpaid services [5] - Postpaid services generated $13.5 billion in revenues, reflecting an 8.3% year-over-year increase [5] - Equipment revenues increased to $4.69 billion from $4.17 billion in the prior year, attributed to a higher average revenue per device sold [8] Customer Growth - T-Mobile added 1.9 million postpaid net customers and 263,000 postpaid net accounts in Q4 2024, marking the best performance in the industry [6] - Postpaid phone net customer additions were 903,000, with a churn rate of 0.92% [6] - High-speed Internet net customer additions totaled 428,000 during the quarter [6] Cash Flow and Liquidity - Cash generated from operating activities in Q4 2024 was $5.54 billion, up from $4.85 billion in the prior year [11] - Adjusted free cash flow was $4.08 billion, down from $4.3 billion year-over-year [11] - As of December 31, 2024, TMUS had $5.4 billion in cash and cash equivalents and $72.7 billion in long-term debt [12] Future Outlook - For 2025, TMUS anticipates postpaid net customer additions between 5.5 million and 6 million [13] - Core adjusted EBITDA is projected to be between $33.1 billion and $33.6 billion [13] - The company expects cash from operating activities to be in the range of $26.8 billion to $27.5 billion [13]

Financial Data and Key Metrics - Q3 2024 was a strong quarter with consistent execution, enabling the company to raise its 2024 guidance again [5] - Core adjusted EBITDA growth of 9% led the industry by a wide margin, driven by profitable customer growth and industry-leading service revenue growth [9] - Full-year 2024 guidance for core adjusted EBITDA raised to $31.6 billion to $31.8 billion, up $50 million at the midpoint [10] - Adjusted free cash flow for 2024 is expected to be between $16.7 billion and $17 billion, up $50 million at the midpoint, driven by margin expansion and capital efficiency [11] - Postpaid ARPA (Average Revenue Per Account) is expected to grow around 3% year-over-year in 2024, with industry-leading service revenue growth accelerating [10] Business Line Performance - Mobile business delivered the best Q3 postpaid phone net adds in a decade, fueled by record-low Q3 postpaid phone churn and year-over-year growth in gross adds [6] - Broadband business reached a milestone of 6 million customers in just three years, halfway to the long-term target of 12 million customers by 2028 [8] - Digital mix of iPhone launch sales in Q3 increased by 40% year-over-year, with the majority of T-Mobile branded iPhone pre-orders being digital for the first time [7] - Enterprise segment saw double-digit growth quarter-over-quarter, with significant wins in government and retail sectors [38] Market Performance - The company continues to lead the industry in share of switchers and grew its share of households in both top 100 markets and rural areas [6] - Smaller markets and rural areas (SMRA) saw strong growth, with Q3 being the highest win share quarter ever, and Net Promoter Score (NPS) in these areas is now 20% higher than the next competitor [35][36] - The company’s 5G network was awarded the best 5G availability in the world by Opensignal, further differentiating its technology leadership [8] Strategic Direction and Industry Competition - The company is focused on evolving from a challenger to a champion, with a multi-year plan that emphasizes consistent execution and digital transformation [11] - Digitalization efforts are progressing, with a goal to reduce person-to-person customer service interactions by 75% and achieve majority digital activations [20][21] - The company is leveraging its 5G network leadership, with advanced technologies like voice over new radio and four-way carrier aggregation, to further extend its competitive advantage [8][52] - The company is exploring opportunities in AI-RAN and 6G, with a focus on driving future network efficiency and performance [73][74] Management Commentary on Operating Environment and Future Outlook - Management highlighted the company’s resilience and recovery efforts following hurricanes Helene and Milton, showcasing the team’s innovative use of technology to support affected communities [4] - The company remains optimistic about its growth trajectory, with a focus on underpenetrated areas and segments, particularly in rural markets and among customers who prioritize network attributes [6][35] - Management emphasized the importance of maintaining a balance between growth and profitability, with a strategy that prioritizes value, network quality, and customer experience [88][89] Other Important Information - The company is actively managing its spectrum portfolio, including recent transactions involving 3.45 GHz and 2.5 GHz spectrum, and exploring options for 800 MHz spectrum [23][24] - The company is progressing with several strategic transactions, including deals with US Cellular, Lumos, and Metronet, which are expected to close in 2025 [80][82] - The company is investing in customer-driven coverage, using AI-driven algorithms to optimize network deployment and capital allocation [59][60] Q&A Summary Question: Buyback Strategy and Wholesale Business Impact [13] - The company adjusted its buyback strategy to be more consistent and less reactive to short-term share price movements [15] - Wholesale revenue is expected to trough in 2025, with underlying growth in partnerships offsetting declines from ACP and TracFone transitions [16] Question: Spectrum Strategy and Digitalization Cost Savings [18] - The company is optimizing its spectrum portfolio, with 3.45 GHz not being part of its long-term plan, and exploring options for 800 MHz spectrum [23][24] - Digitalization efforts are expected to drive significant cost savings and revenue growth, with a detailed 14-quarter plan in place to track progress [19][20] Question: DT’s Ownership Stake and Postpaid Phone Net Adds [26] - DT’s ownership stake in T-Mobile may increase over time, but the governance structure and strategic alignment remain unchanged [27][28] - The company expects approximately 3 million postpaid phone net adds for the full year, with Q4 trends aligning with expectations [29] Question: SMRA Market Penetration and Postpaid ARPU Strength [34] - The company is seeing strong growth in smaller markets and rural areas, with record win share and high Net Promoter Scores [35][36] - Postpaid ARPU strength is driven by a mix of factors, including rate plan optimization and expansion of customer relationships [41] Question: 800 MHz Spectrum and AT&T’s Fiber Network [43] - The company has optionality with 800 MHz spectrum, which is not currently part of its financial or network plans [45] - The company is open to future opportunities in fiber but remains focused on its own fiber deployment strategy [47] Question: Handset Upgrade Rates and AI-Driven Device Cycle [49] - Current handset upgrade rates remain low due to the longevity and performance of existing devices, but the company is well-positioned for any future upgrade cycles [50][51] - The company’s standalone 5G network and advanced device capabilities provide a competitive edge in future upgrade cycles [52][53] Question: Network Upgrade Priorities for 2025 [57] - The company is using a customer-driven coverage model, leveraging AI and data to prioritize network upgrades and optimize capital allocation [59][60] - The company has a detailed plan for deploying C-band spectrum in 50 markets, with further capacity expansion not immediately needed [62] Question: Macroeconomic Indicators and Consumer Behavior [65] - The company does not see significant changes in consumer behavior or macroeconomic indicators affecting its core business, with steady growth in postpaid and prepaid-to-postpaid transfers [68][69] Question: Spectrum Costs and 6G Cycle [72] - The company is optimistic about the efficiency of future 6G cycles, with potential cost savings from AI-RAN and Open RAN technologies [73][74] - The company’s 5G strategy has benefited both consumers and the industry, with significant improvements in speed and data usage at similar price points [75] Question: US Cellular Deal and ARPU Growth Drivers [78] - The US Cellular deal is progressing well, with expected closure in mid-2025, and is expected to benefit both T-Mobile and US Cellular customers [80][83] - ARPA growth is driven by the expansion of customer relationships, with minimal impact from rate plan optimization [79] Question: Fixed Wireless Business and Growth Trends [94] - The company’s fixed wireless business continues to perform strongly, with consistent net adds and high customer satisfaction [95] - The majority of fixed wireless customers are coming from cable, with gross adds needing to increase to sustain growth towards the 12 million customer target by 2028 [95]

Core Insights - T-Mobile reported $21.87 billion in revenue for Q4 2024, a year-over-year increase of 6.8% and a surprise of +3.30% over the Zacks Consensus Estimate of $21.17 billion [1] - The EPS for the same period was $2.57, compared to $1.67 a year ago, with an EPS surprise of +18.43% over the consensus estimate of $2.17 [1] Financial Performance Metrics - Prepaid churn was reported at 2.9%, slightly above the six-analyst average estimate of 2.8% [4] - Postpaid phone churn matched the average estimate at 0.9% [4] - Total High-Speed Internet net customer additions were 428 thousand, exceeding the average estimate of 402.63 thousand [4] - Total postpaid customer net additions reached 1.93 million, surpassing the average estimate of 1.61 million [4] - Postpaid ARPU was $49.73, above the average estimate of $49.28 [4] - Prepaid ARPU was $35.49, slightly below the average estimate of $35.71 [4] - Total service revenues amounted to $16.93 billion, exceeding the average estimate of $16.71 billion, with a year-over-year change of +5.5% [4] - Equipment revenues were $4.70 billion, above the estimated $4.26 billion, representing a +12.6% change year-over-year [4] - Other revenues were reported at $245 million, slightly above the average estimate of $233.41 million, but showing a -6.1% change year-over-year [4] - Prepaid revenues reached $2.69 billion, compared to the average estimate of $2.68 billion, reflecting a +10.5% year-over-year change [4] - Wholesale and other service revenues were $738 million, exceeding the average estimate of $656.08 million, but showing a -35.2% year-over-year change [4] - Postpaid revenues were reported at $13.50 billion, above the average estimate of $13.37 billion, with an +8.3% change year-over-year [4]

Core Insights - T-Mobile reported quarterly earnings of $2.57 per share, exceeding the Zacks Consensus Estimate of $2.17 per share, and showing an increase from $1.67 per share a year ago, resulting in an earnings surprise of 18.43% [1] - The company achieved revenues of $21.87 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.30% and up from $20.48 billion year-over-year [2] Earnings Performance - T-Mobile has surpassed consensus EPS estimates in all four of the last quarters [2] - The company has also exceeded consensus revenue estimates three times over the last four quarters [2] Stock Performance and Outlook - T-Mobile shares have increased by approximately 0.2% since the beginning of the year, while the S&P 500 has gained 3.2% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Earnings Expectations - The current consensus EPS estimate for the upcoming quarter is $2.44, with expected revenues of $20.45 billion, and for the current fiscal year, the EPS estimate is $10.15 on revenues of $84.21 billion [7] Industry Context - The Wireless National industry, to which T-Mobile belongs, is currently ranked in the bottom 26% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact T-Mobile's stock performance [5]

T-Mobile US (TMUS) Q4 2024 Earnings Call January 29, 2025 08:00 AM ET Company Participants Cathy Yao - SVP - Investor RelationsMike Sievert - President and CEOPeter Osvaldik - Executive VP & CFOBenjamin Swinburne - Managing DirectorMike Katz - Chief Marketing OfficerDavid Barden - Managing DirectorJon Freier - President of Consumer GroupCallie Field - President of Business GroupJonathan Chaplin - Managing PartnerUlf Ewaldsson - President of TechnologyKannan Venkateshwar - Managing DirectorJanice Kapner - Ex ...

Core Insights - T-Mobile US reported strong fourth-quarter results for 2024, exceeding analyst expectations in net income and revenue [1][5] - The company achieved a net income of $2.98 billion, or $2.57 per share, on revenue of $21.87 billion, surpassing estimates of $2.63 billion in profits and $21.31 billion in revenue [1][5] Company Performance - T-Mobile's CEO highlighted the company's record low churn rate for postpaid phone subscribers and noted three consecutive years of over 3 million postpaid phone net additions [2][3] - The company added 903,000 postpaid phone subscribers and 428,000 net internet customers, both exceeding analyst expectations of 859,810 and 402,000, respectively [3] Future Outlook - For 2025, T-Mobile anticipates adding between 5.5 million to 6 million net new customers but refrained from providing a profit forecast due to unpredictable factors affecting net income [4] - T-Mobile's stock rose over 6% in premarket trading and has increased by 35% over the past year [5]

Financial Performance - Net income for Q4 2024 was $3.0 billion, with diluted earnings per share at $2.57, compared to $2.0 billion and $1.67 in Q4 2023[39] - Net income for Q4 2024 was $2,981 million, compared to $2,014 million in Q4 2023, reflecting a 48% year-over-year increase[64] - Net income for Q4 2023 was $2,014 million, compared to $1,940 million in Q1 2023, with an expected increase to $2,981 million by Q4 2024[82] - Net income for Q4 2023 was $2,981 million, with a total net income of $8,317 million for the year ended December 31, 2023, representing a year-over-year increase of 11.5%[89] - Operating income for the year ended December 31, 2024, was $18,010 million, compared to $14,266 million in 2023, marking a 26% increase[64] - Adjusted EBITDA for Q4 2023 reached $8,243 million, contributing to a total of $31,864 million for the year, reflecting a 8.3% increase compared to the previous year[89] - Adjusted EBITDA for Q4 2023 was $7,224 million, reflecting a margin of 45.0%, with projections of $7,916 million and a margin of 46.8% for Q4 2024[82] - Core Adjusted EBITDA for 2025 is guided to be between $33.1 to $33.6 billion[57] - Adjusted Free Cash Flow for Q4 2023 was $4,084 million, with a total of $17,032 million for the year, marking a 25.5% increase year-over-year[93] - Adjusted Free Cash Flow guidance for FY 2025 is projected to be between $17,300 million and $18,000 million[94] Revenue Growth - Service revenues increased by 6% year-over-year, primarily driven by an 8% increase in postpaid service revenues[26] - Total revenues for Q4 2024 reached $21,872 million, an increase of 6.8% compared to $20,478 million in Q4 2023[64] - Postpaid revenues increased to $13,502 million in Q4 2024, up from $12,472 million in Q4 2023, representing an 8.2% growth[64] - Total service revenues for Q4 2023 were not explicitly stated but are implied to have increased, contributing to the improved net income and EBITDA figures[89] Customer Metrics - Total postpaid customers reached 104,118 thousand by the end of Q4 2024, up 6.5% from 98,052 thousand in Q4 2023[73] - Total postpaid customer additions for 2023 reached 5,650, while the guidance for 2024 is 6,066, indicating a growth of approximately 7.4%[76] - The total number of postpaid customer accounts increased from 28,813 in Q1 2023 to 30,894 by the end of 2024, reflecting a steady growth trajectory[79] - The total number of prepaid customers increased to 25,410 thousand by the end of Q4 2024, a growth of 17.5% from 21,648 thousand in Q4 2023[75] - Postpaid phone churn decreased by 4 basis points year-over-year, indicating improved customer retention[16] - Prepaid churn decreased from 2.86% in Q4 2023 to an expected 2.85% in Q4 2024, indicating improved customer retention in the prepaid segment[76] Debt and Cash Flow - Total debt, excluding tower obligations, at the end of Q4 2024 was $80.6 billion, with net debt at $75.2 billion[55] - Long-term debt increased to $72,700 million in 2024 from $69,903 million in 2023, indicating a 4% rise[62] - Net cash provided by operating activities for the year ended December 31, 2024, was $22,293 million, an increase of 20% from $18,559 million in 2023[68] - The company reported a net cash used in investing activities of $9,072 million for the year ended December 31, 2024, compared to $5,829 million in 2023, reflecting increased capital expenditures[68] - Cash purchases of property and equipment increased by 39% year-over-year, primarily due to planned timing of capital purchases[49] - Cash purchases of property and equipment, including capitalized interest, are expected to remain constant at $9,500 million for FY 2025[94] Stockholder Returns - The company returned a total of $31.4 billion to stockholders since initiating its stockholder return program in Q3 2022[56] - Total stockholder returns for 2023 amounted to $13,954 million, with projections of $14,408 million for 2024[85] - The company repurchased common stock worth $4,687 million in Q4 2024, significantly higher than $560 million in Q3 2024[71] - The company repurchased a total of 32,963,940 shares in Q1 2023, with cumulative repurchases reaching 173,663,375 shares by the end of 2024[85] Operational Efficiency - The company noted that Core Adjusted EBITDA is used to monitor financial performance, excluding lease revenues from device financing programs[14] - T-Mobile's retained earnings increased significantly to $14,384 million in 2024 from $7,347 million in 2023, showing a substantial growth in profitability[62] - Core Adjusted EBITDA margin improved to 49.2% in Q4 2023, up from 46.0% in Q4 2022, indicating enhanced operational efficiency[89] - The company continues to focus on operational efficiencies and strategic cost management, as evidenced by the reduction in merger-related costs and improved margins[89] Future Outlook - Postpaid net customer additions for 2025 are projected to be between 5.5 to 6.0 million[57] - Net cash provided by operating activities for FY 2025 is estimated to be between $26,800 million and $27,500 million[94] - The company faces risks including competition, market changes, and geopolitical instability that could impact future performance[102] - T-Mobile operates a transformative nationwide 5G network, enhancing connectivity and service quality for customers[103] Legal and Compliance - Legal-related recoveries from litigation associated with the August 2021 cyberattack were noted, contributing positively to the financial results[91] - The company is focused on maintaining effective internal control over financial reporting and compliance with regulatory frameworks[102]

Core Insights - Motti Sapir is an economist and financial analyst with over 15 years of experience in financial markets, focusing on market trends and data analysis [1] - He aims to simplify complex financial concepts for investors, emphasizing actionable insights and clear communication [1] - Sapir writes for Seeking Alpha, providing insights on stocks, bonds, economic trends, and specific sectors to help investors make informed decisions [1] Company and Industry Analysis - The article highlights the importance of understanding financial data and market trends to uncover potential investment opportunities [1] - Motti Sapir's approach includes creating clear visuals to make financial data more accessible and understandable for investors [1] - The focus on practical investment strategies indicates a trend towards more transparent and straightforward investment advice in the financial industry [1]

Core Viewpoint - T-Mobile is expected to report fourth-quarter 2024 results on January 29, with anticipated revenue growth driven by increased demand for postpaid services and innovative product launches [1][2][10] Group 1: Financial Performance Expectations - Total service revenues are estimated at $16.75 billion, reflecting a year-over-year growth of 4.4% [9] - Equipment revenues are projected at $4.05 billion, indicating a year-over-year decrease of 2.8% [9] - The Zacks Consensus Estimate for total revenues stands at $21.17 billion, an increase from $20.48 billion reported in the same quarter last year [10] - Adjusted earnings per share are expected to be $2.17, up from $1.67 reported a year ago [10] Group 2: Product Innovations and Market Strategy - T-Mobile launched three new 5G Internet plans aimed at home and small business customers, featuring price locks and no equipment charges [3] - The introduction of the 5G On Demand service allows for rapid establishment of 5G connectivity, supporting high bandwidth applications [4] - High-profile events have utilized T-Mobile's products to enhance video transmission and fan experiences, likely contributing to revenue growth [5][6] Group 3: Competitive Landscape and Challenges - The U.S. wireless market is experiencing intensified competition, which is impacting T-Mobile's margins [7] - T-Mobile is trading at a premium valuation compared to the industry, raising concerns for investors [7] Group 4: Strategic Collaborations - T-Mobile has initiated a beta program for direct-to-cell satellite service in collaboration with Starlink, initially supporting text messaging for postpaid voice customers [8]

Wall Street expects a year-over-year increase in earnings on higher revenues when T-Mobile (TMUS) reports results for the quarter ended December 2024. While this widely-known consensus outlook is important in gauging the company's earnings picture, a powerful factor that could impact its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on January 29, 2025, might help the stock move higher if these key numbers are better than exp ...