T-Mobile US (TMUS) Q3 2024 earnings summary

Executive summary

• Achieved highest Q3 postpaid phone net customer additions in a decade and record low churn, with total net customer additions reaching 1.6 million and total customer connections at a record 127.5 million.

• Service revenues grew 5% year-over-year to $16.7 billion, and net income rose 43% to $3.1 billion.

• Maintained industry leadership in 5G network performance, digital sales, and broadband net adds, reaching 6 million broadband customers.

• Completed Ka'ena Acquisition (Mint Mobile, Ultra Mobile), adding 3.5 million prepaid customers and enhancing prepaid market position.

• Announced pending $4.4 billion acquisition of UScellular wireless operations and major fiber joint ventures (Lumos, Metronet) to expand service offerings.

Financial highlights

• Q3 core adjusted EBITDA grew 9% year-over-year to $8.2 billion, with a margin of 49.2%.

• Adjusted Free Cash Flow hit a record $5.2 billion, up 29% year-over-year, and net cash from operating activities reached $6.1 billion, up 16%.

• Diluted EPS grew 43% year-over-year to $2.61.

• Service revenues increased 5% year-over-year to $16.7 billion, driven by postpaid and prepaid growth.

• Cash CapEx guidance remains $8.8–$9.0 billion for 2024, reflecting capital efficiencies.

Outlook and guidance

• 2024 guidance raised for postpaid net customer additions (5.6–5.8 million), ARPA, core adjusted EBITDA ($31.6–$31.8 billion), and free cash flow ($16.7–$17.0 billion).

• Net cash from operating activities guidance raised to $22.0–$22.3 billion.

• Capital expenditures expected to decrease as 5G build nears completion; future capex to focus on C-band deployment and integration.

• Anticipates closing UScellular and fiber joint ventures in 2025, with $1 billion in annual run-rate cost synergies from UScellular integration.

• Continued focus on profitable growth, digitalization, and expanding customer relationships.