T-Mobile(US:TMUS)2025-04-24 20:07Mergers and Acquisitions - As of March 31, 2025, net cash payments for Sprint Merger-related costs were $61 million, compared to $293 million for the same period in 2024[187]. - T-Mobile invested $926 million to acquire a 50% equity interest in the Lumos joint venture, with an expected additional capital contribution of approximately $500 million in 2027 or 2028[190]. - The acquisition of Metronet is expected to close in mid-2025, with T-Mobile planning to invest approximately $4.9 billion for a 50% equity interest[191]. - T-Mobile completed the acquisition of Ka'ena Corporation for a total payment fair value of $956 million, including $420 million in cash and stock[193]. - The UScellular acquisition is valued at approximately $4.4 billion, with expected annual run rate cost synergies of $1.0 billion upon integration[198]. - T-Mobile acquired Vistar Media Inc. for $621 million, enhancing its technology solutions for digital-out-of-home advertisements[200]. - The acquisition of Blis Holdco Limited was completed for $180 million, expanding T-Mobile's advertising solutions capabilities[202]. - The company completed the acquisition of Vistar Media Inc. for $621 million and Blis Holdco Limited for $180 million in early 2025[277][278]. - The company entered into a securities purchase agreement to acquire UScellular's wireless operations for approximately $4.4 billion, expected to close in mid-2025[273]. Financial Performance - Total revenues increased by $1.3 billion, or 7%, from $19.6 billion in Q1 2024 to $20.9 billion in Q1 2025[205]. - Postpaid revenues rose by $963 million, or 8%, while prepaid revenues increased by $240 million, or 10%[206]. - Total operating expenses increased by $490 million, or 3%, with cost of services decreasing by $86 million, or 3%[207]. - Operating income grew by $802 million, or 20%, reaching $4.8 billion in Q1 2025[209]. - Net income for Q1 2025 was $2.95 billion, a 24% increase from $2.37 billion in Q1 2024[215]. - Adjusted EBITDA rose by $607 million, or 8%, reaching $8.26 billion in Q1 2025[215]. - Net cash provided by operating activities increased by $1.76 billion, or 35%, totaling $6.85 billion[215]. - Equipment revenues increased by $453 million, or 14%, totaling $3.7 billion in Q1 2025[205]. - Income tax expense increased by $121 million, or 16%, with an effective tax rate of 23.0% for Q1 2025[215]. - Adjusted EBITDA increased by $607 million, or 8%, to $8,259 million for the three months ended March 31, 2025[244]. - Core Adjusted EBITDA rose by $641 million, or 8%, to $8,258 million, reflecting improved operational performance[246]. - Net income for the period increased by $579 million, or 24%, to $2,953 million[244]. Customer Metrics - The number of postpaid accounts increased by 1,084 thousand, or 4%, from 30,015 thousand in Q1 2024 to 31,099 thousand in Q1 2025[227]. - Total postpaid customers increased by 6,183, or 6%, reaching 105,455, while prepaid customers rose by 3,855, or 18%, totaling 25,455 as of March 31, 2025[230]. - Total net customer additions increased by 210,000, or 18%, driven by higher net additions from postpaid other customers and prepaid customers[231]. - Postpaid net account additions decreased by 13,000, or 6%, for the three months ended March 31, 2025, primarily due to higher account deactivations[228]. - Postpaid phone churn increased by 5 basis points to 0.91%, while prepaid churn decreased by 7 basis points to 2.68%[233]. - Postpaid Average Revenue per Account (ARPA) increased by $5.34, or 4%, to $146.22, reflecting higher revenue realization[237]. - Postpaid phone Average Revenue per User (ARPU) rose by $0.59, or 1%, to $49.38, while prepaid ARPU decreased by $2.51, or 7%, to $34.67[238]. Cash Flow and Liquidity - Net cash provided by operating activities increased by $1.8 billion, or 35%, to $6.847 billion for the three months ended March 31, 2025, compared to $5.084 billion in 2024[251]. - Net cash used in investing activities rose by $1.6 billion, or 91%, totaling $(3.409) billion, primarily due to $2.5 billion in purchases of property and equipment for the 5G network build-out[251][253]. - Adjusted Free Cash Flow increased by $1.0 billion, or 31%, reaching $4.396 billion, with an Adjusted Free Cash Flow margin of 26%, up from 21%[255]. - As of March 31, 2025, total cash and cash equivalents were $12.0 billion, significantly up from $5.4 billion at December 31, 2024[252]. - The company’s liquidity sources include cash and cash equivalents, cash generated from operations, and proceeds from debt issuance[249]. - A revolving credit facility of $7.5 billion was maintained with no outstanding balance as of March 31, 2025[258]. - The company expects to enter into up to $1.2 billion in financing lease commitments during the year ending December 31, 2025, with $10.2 billion already executed as of March 31, 2025[284]. Debt and Capital Expenditures - Total debt and financing lease liabilities amounted to $88.0 billion, with $77.5 billion classified as long-term debt[262]. - The company remains in compliance with all restrictive debt covenants as of March 31, 2025[283]. - The company plans to maintain its capital expenditures in 2025 at levels comparable to 2024, primarily driven by the deployment of acquired spectrum licenses[285]. Stockholder Returns - The 2025 Stockholder Return Program is authorized for up to $14.0 billion, which includes share repurchases and cash dividends through December 31, 2025[287]. - During the three months ended March 31, 2025, the company paid $1.0 billion in cash dividends and repurchased 10,091,227 shares for a total of $2.5 billion[290][291]. - As of March 31, 2025, the company had $10.5 billion remaining under the 2025 Stockholder Return Program for share repurchases and dividends[291]. - The company has approximately $50.0 billion allocated for share repurchases and cash dividends, with an additional $19.0 billion for discretionary activities[296]. Risks and Challenges - The company faces risks related to competition, market conditions, and regulatory approvals that could affect future performance[184]. - T-Mobile's substantial level of indebtedness may impact its ability to service debt obligations[184]. - The company incurred substantial expenses related to the Sprint Merger, with cash expenditures extending beyond 2024[282]. - As of March 31, 2025, the company derecognized net receivables of $1.6 billion from off-balance sheet arrangements[280].