T-Mobile US Q3 Earnings Call Highlights

Key Points

• Strong Q3 operating performance: T-Mobile added 274,000 postpaid accounts and led the industry in postpaid phone and 5G broadband additions. Postpaid service revenue rose 9%, total service revenue increased 6%, and core adjusted EBITDA grew 11%.
• Full-year outlook raised: The company now expects about 1 million net account additions, approximately $76.8 billion in service revenue, and $18.7 billion–$18.8 billion in adjusted free cash flow for 2026. Full-year postpaid ARPA growth guidance increased to about 3.5%.
• Growth investments and shareholder returns continue: T-Mobile remains focused on expanding 5G broadband and fiber, developing AI-enabled network technologies, and investing in spectrum. It had repurchased $10.3 billion of shares through Oct. 23 and raised its dividend per share by 15%.

T-Mobile US NASDAQ: TMUS said its third-quarter performance was led by postpaid phone and 5G broadband customer gains, higher service revenue and continued expansion in average revenue per account, while management raised portions of its full-year financial outlook.

President and CEO Srini Gopalan said the company recorded 274,000 postpaid net account additions during the quarter and led the industry in postpaid phone and 5G broadband net additions. Postpaid average revenue per account, or ARPA, increased more than 4% from a year earlier, while 5G broadband ARPU rose both year over year and sequentially.

Financially, T-Mobile reported 9% growth in postpaid service revenue, 6% growth in total service revenue and 11% growth in core adjusted EBITDA. Adjusted free cash flow margin was 26%, Gopalan said.

Updated Full-Year Outlook

Chief Financial Officer Peter Osvaldik said the company now expects approximately 1 million net account additions for 2026. T-Mobile projected full-year service revenue of about $76.8 billion, representing 8% growth, supported by postpaid momentum but partly offset by declines in wholesale and other revenue and ongoing prepaid trends.

• Full-year postpaid ARPA growth is now expected to be about 3.5%, up from the prior 2.5% to 3% outlook.
• Fourth-quarter postpaid organic service revenue growth is expected to be approximately 7% year over year.
• Core adjusted EBITDA is forecast at $37.35 billion to $37.45 billion, an increase of $100 million at the midpoint from prior guidance.
• Cash capital expenditures are still expected to be about $10 billion for 2026.
• Adjusted free cash flow is projected at $18.7 billion to $18.8 billion, up $150 million at the midpoint.

Osvaldik said the improved ARPA outlook reflected adoption of premium-rate plans, deeper customer relationships and rate-plan modernization initiatives. He also said 60% of lines for new accounts are on premium plans, while port-in ARPAs are 20% higher than port-out ARPA.

Management said wholesale and other service revenue has faced pressure as TracFone and Boost MVNO business has rolled off faster than expected. On prepaid, Osvaldik said some higher-value customers have increasingly engaged directly with postpaid brands, including through the company’s existing prepaid-to-postpaid migration efforts.

Broadband, Digital Adoption and Fiber

Gopalan said T-Mobile remains on pace to reach 15 million 5G broadband customers by the end of the decade, though the company did not disclose quarterly broadband subscriber additions. Chief Commercial Officer André Almeida said T-Mobile had industry-leading fixed wireless access net additions during the quarter.

The company said its 5G broadband customers have the highest net promoter scores among broadband connectivity categories, including fiber. Gopalan added that its fiber business has reached approximately 20% penetration over a 12-month period, with customer growth accelerating sequentially and year over year. T-Mobile remains on track for 3 million to 4 million fiber customers by 2030.

Management said it is pursuing fiber opportunities based on standalone financial returns rather than a broader need for fixed-mobile convergence. Gopalan said the company would consider fiber acquisitions that meet its return thresholds, particularly in first-to-fiber or near-first-to-fiber areas, but would not pursue a predetermined number of homes passed.

The company also highlighted increased digital activity through its T-Life app. Monthly active users rose to 32 million from more than 30 million in June, Gopalan said. More than 80% of upgrades and half of phone-line activations in the third quarter were completed digitally, either by customers themselves or with assistance from associates.

Network and AI Initiatives

T-Mobile said its median network speeds were about 60% to 70% faster than those of its two largest competitors, based on Ookla data. Gopalan said OpenSignal named the company a global winner in 5G Coverage, adding that T-Mobile has received that designation every year the program has existed.

The company also discussed its work in artificial intelligence-enabled networks and so-called physical AI applications. Gopalan said T-Mobile completed what it described as the world’s first AI-RAN call on its live network in Bellevue and is working with Amazon Web Services to develop Kinetic Edge, a distributed infrastructure combining 5G Advanced connectivity, edge computing and AWS cloud and AI services.

Gopalan said early physical-AI commercialization has focused on selling integrated solutions rather than separately selling connectivity or computing capacity. He said these solutions can reduce device costs by enabling customers to offload some computing needs from devices.

Chief Technology Officer John Saw said T-Mobile incorporates expected spectral-efficiency improvements into network planning and has seen gains from AI-based radio-resource planning in field testing in New York. He said the company expects AI-RAN technology to improve the experience for fixed wireless customers and is monitoring radio uplink capacity in dense areas as connected AI devices expand.

Capital Allocation and Fourth-Quarter Factors

Osvaldik said T-Mobile had completed $10.3 billion of share repurchases through Oct. 23, exceeding the $9.9 billion repurchased during all of 2025. The company also increased its dividend per share by 15%.

Looking ahead, he said T-Mobile’s capital allocation priorities remain investment in the core business, leverage management, spectrum opportunities, accretive acquisitions and shareholder returns. He said upcoming spectrum auctions in 2027 and 2028 could require a larger portion of the company’s capital allocation capacity.

Gopalan said the company evaluates spectrum by balancing the strategic benefits of network leadership against the economics of buying spectrum versus network densification. He said T-Mobile welcomes additional spectrum coming to market but would not pay uneconomic prices.

Management said fourth-quarter results could be affected by normal holiday-season promotional intensity, a staggered iPhone launch, higher device prices, availability of certain handset variants and inventory constraints that shifted some activity from the third quarter into the fourth quarter. Osvaldik also said account churn typically rises sequentially in the fourth quarter and that the company expects a muted residual churn effect from rate-plan optimization initiatives.

About T-Mobile US (NASDAQ:TMUS)

T-Mobile US, Inc NASDAQ: TMUS is a wireless communications company that provides mobile voice, messaging and data services to consumers, businesses and government customers in the United States, Puerto Rico and the U.S. Virgin Islands. Its offerings include postpaid and prepaid wireless plans, connected devices, broadband internet and other communications services.

The company operates a nationwide wireless network, including 5G services, and sells smartphones, tablets, connected devices and related accessories through retail stores, online channels and third-party distributors.

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