T-Mobile(US:TMUS)2025-10-23 11:02Acquisitions and Mergers - T-Mobile completed the acquisition of UScellular's wireless operations for approximately $4.4 billion, including the assumption of up to $2.0 billion in debt[234]. - The UScellular acquisition is expected to yield annual run rate cost synergies of $1.2 billion, comprising $950 million in operating expenses and $250 million in capital expenditures[246]. - T-Mobile launched exchange offers for UScellular's senior notes, with an aggregate outstanding principal balance of $1.7 billion, to be exchanged for T-Mobile notes[240]. - The company incurred UScellular merger-related costs totaling $73 million for the three months ended September 30, 2025, a 356% increase from $16 million in the same period of 2024[243]. - T-Mobile acquired Vistar Media Inc. for $621 million, enhancing its technology solutions for digital-out-of-home advertisements[248]. - The acquisition of Blis Holdco Limited was completed for $180 million, expanding T-Mobile's advertising solutions capabilities[250]. - T-Mobile's merger with Ka'ena Corporation involved a total payment fair value of $956 million, including $420 million in cash and stock[251]. - The company anticipates restructuring and integration costs from the UScellular acquisition to be completed by the end of fiscal year 2027[245]. Financial Performance - Total revenues increased by $1.8 billion, or 9%, for the three months ended September 30, 2025, and increased by $4.4 billion, or 7%, for the nine months ended September 30, 2025[263]. - Postpaid revenues rose by $1.6 billion, or 12%, for the three months ended September 30, 2025, and increased by $3.7 billion, or 10%, for the nine months ended[264]. - Prepaid revenues decreased by $91 million, or 3%, for the three months ended September 30, 2025, but increased by $200 million, or 3%, for the nine months ended[264]. - Total operating expenses increased by $2.1 billion, or 13%, for the three months ended September 30, 2025, and increased by $3.3 billion, or 7%, for the nine months ended[268]. - Selling, general and administrative expenses increased by $829 million, or 16%, for the three months ended September 30, 2025, and increased by $1.4 billion, or 9%, for the nine months ended[271]. - Adjusted EBITDA was $8.684 billion for the three months ended September 30, 2025, representing a 5% increase compared to the same period in 2024[262]. - Net cash provided by operating activities was $7.457 billion for the three months ended September 30, 2025, a 21% increase from the prior year[262]. - Operating income decreased by $266 million, or 6%, for the three months ended September 30, 2025, while it increased by $1.1 billion, or 8%, for the nine months ended[276]. - Net income for the three months ended September 30, 2025, was $2.7 billion, down from $3.1 billion in 2024, while net income for the nine months ended was $8.9 billion, up from $8.4 billion in 2024[284]. Customer Metrics - Postpaid accounts increased by 3,348,000, or 11%, from 30,631,000 in 2024 to 33,979,000 in 2025, including acquisitions from UScellular and others[296]. - Postpaid net account additions increased by 81,000, or 26%, for the three months ended September 30, 2025, and by 85,000, or 10%, for the nine months ended[298]. - Total net customer additions for the nine months ended September 30, 2025, increased by 1,255,000, or 29%, totaling 5,543 compared to 4,288 in 2024[304]. - Net customer additions for the three months ended September 30, 2025, increased by 791,000, or 49%, totaling 2,390, compared to 1,599 in 2024[303]. - Fiber customers included in postpaid other customers reached 934,000 as of September 30, 2025[302]. Capital Expenditures and Investments - The company invested $932 million to acquire a 50% equity interest in the Lumos joint venture, gaining 97,000 fiber customers[257]. - The company invested $4.6 billion to acquire a 50% equity interest in the Metronet joint venture, gaining 713,000 residential fiber customers[258]. - T-Mobile's capital expenditures are primarily driven by investments in spectrum licenses and network infrastructure, with expectations to maintain investment levels in 2025 compared to 2024[371]. - Cash purchases of property and equipment, including capitalized interest, increased by 35% to $2,639 million for the three months ended September 30, 2025, and by 13% to $7,486 million for the nine months[336]. Debt and Financing - Total debt and financing lease liabilities as of September 30, 2025, were $86.5 billion, with $77.9 billion classified as long-term debt[344]. - During the nine months ended September 30, 2025, the company issued long-term debt for net proceeds of $8.3 billion and redeemed short- and long-term debt totaling $4.6 billion[345]. - The company has a revolving credit facility with a commitment amount of $7.5 billion, with no outstanding balance as of September 30, 2025[340]. Stockholder Returns - T-Mobile's stockholder return programs may not fully utilize share repurchases and dividends, potentially impacting stockholder value[236]. - The 2025 Stockholder Return Program is authorized for up to $14.0 billion, including share repurchases and cash dividends, with $3.6 billion remaining for repurchases and dividends as of September 30, 2025[373][378]. - T-Mobile paid $987 million and $3.0 billion in cash dividends during the three and nine months ended September 30, 2025, respectively[377]. - The company repurchased 10,204,072 shares at an average price of $242.01 for a total of $2.5 billion during the three months ended September 30, 2025[378]. - T-Mobile has approximately $50.0 billion allocated for share repurchases and cash dividends, with an additional $19.0 billion for discretionary activities[383]. Impairment and Expenses - The company recognized an impairment expense of $278 million for the three months ended September 30, 2025, which was not present in the same period of 2024[271]. - Impairment expense was $278 million for the three and nine months ended September 30, 2025, related to capitalized software development costs[274]. - Interest expense increased by $88 million, or 11%, for the three months ended and by $192 million, or 7%, for the nine months ended September 30, 2025, primarily due to higher average debt outstanding[277]. Tax and Effective Tax Rate - The effective tax rate was 23.7% for the nine months ended September 30, 2025, compared to 23.1% for the same period in 2024[284].