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T-Mobile's Q1 Earnings Beat Estimates on Solid Customer Growth
TMUST-Mobile(TMUS) ZACKS·2025-04-25 15:55

Core Insights - T-Mobile, US, Inc. reported strong first-quarter 2025 results, with both net income and revenues exceeding Zacks Consensus Estimates, driven by significant postpaid customer growth [1][2]. Financial Performance - Net income for Q1 2025 was 2.95billion,or2.95 billion, or 2.58 per share, reflecting a 24.4% year-over-year increase from 2.37billionor2.37 billion or 2 per share [2]. - Total revenues reached 20.88billion,upfrom20.88 billion, up from 19.59 billion in the same quarter last year, surpassing the consensus estimate of 20.57billion[2].SegmentResults−Totalservicerevenueswere20.57 billion [2]. Segment Results - Total service revenues were 16.92 billion, a 5.2% increase from 16.09billionyear−over−year,primarilydrivenbydemandforpostpaidservices[3].−Postpaidservicesgenerated16.09 billion year-over-year, primarily driven by demand for postpaid services [3]. - Postpaid services generated 13.59 billion in revenues, marking a 7.6% year-over-year growth [3]. - Prepaid services revenues increased to 2.64billionfrom2.64 billion from 2.4 billion in the previous year [5]. - Equipment revenues rose to 3.7billion,upfrom3.7 billion, up from 3.25 billion, attributed to a higher average revenue per device sold [6]. Customer Growth - T-Mobile added 1.3 million postpaid net customers and 205,000 postpaid net accounts, both leading the industry [4]. - The postpaid phone churn rate was recorded at 0.91%, with postpaid average revenues per account increasing to 146.22from146.22 from 140.88 year-over-year [4]. Operating Metrics - Total operating expenses increased to 16.08billionfrom16.08 billion from 15.59 billion, while operating income rose to 4.8billionfrom4.8 billion from 3.99 billion [7]. - Core adjusted EBITDA was 8.3billion,upfrom8.3 billion, up from 7.65 billion year-over-year [7]. Cash Flow and Liquidity - Cash generated from operating activities was 6.84billion,comparedto6.84 billion, compared to 5.08 billion in the prior year [8]. - Adjusted free cash flow increased to 4.39billionfrom4.39 billion from 3.34 billion year-over-year [8]. - As of March 31, 2025, T-Mobile had 12billionincashandcashequivalentsand12 billion in cash and cash equivalents and 76 billion in long-term debt [8]. Outlook - For 2025, T-Mobile anticipates postpaid net customer additions between 5.5 million and 6 million, with core adjusted EBITDA estimated at 33.2−33.2-33.7 billion [9]. - Expected cash from operating activities is projected to be within 27−27-27.5 billion, with adjusted free cash flow anticipated in the range of 17.5−17.5-18 billion [9].