T-Mobile US (TMUS) Q4 2025 earnings summary

Executive summary

• Achieved industry-leading customer and service revenue growth in Q4 2025, with 2.4M net postpaid customer additions, 558K broadband net additions, and recognition for best network quality by J.D. Power and Opensignal.

• Service revenues grew 10% year-over-year to $18.7B in Q4 2025, with postpaid service revenues up 14% and core Adjusted EBITDA up 7% to $8.4B, margin at 45.2%.

• Net income for Q4 2025 was $2.1B, with diluted EPS of $1.88, impacted by $293M in severance and $208M in impairment expenses.

• Raised 2026 and 2027 guidance, now expecting $77B in service revenue for 2026 (8% growth) and $80.5–$81.5B for 2027 (5% growth), with $40–$41B in adjusted EBITDA by 2027.

• Focused on network, value, and customer experience differentiation, leveraging AI, digitalization, and unique engagement platforms.

Financial highlights

• Total revenues for Q4 2025 were $24.3B, up from $21.9B in Q4 2024; net cash from operating activities was $6.7B, up 20% year-over-year.

• Free cash flow conversion from service revenue at 22% in Q4 and 25% for the year; Adjusted Free Cash Flow for Q4 2025 was $4.2B, up 2% year-over-year.

• Equipment revenues increased 14% year-over-year, driven by higher average revenue per device and increased high-end phone mix.

• Cost of services (excl. D&A) and SG&A expenses both rose 23% year-over-year, reflecting merger, restructuring, and severance costs.

• Free cash flow guidance: $18–$18.7B in 2026, $19.5–$20.5B in 2027.

Outlook and guidance

• 2026 guidance: $77B service revenue (8% growth), $37–$37.5B adjusted EBITDA, $18–$18.7B free cash flow, and capital expenditures around $10B.

• 2027 guidance: $80.5–$81.5B service revenue (5% growth), $40–$41B adjusted EBITDA, $19.5–$20.5B free cash flow.

• Postpaid net account additions expected at 900,000–1 million in 2026, with 2.5 million postpaid phone net adds implied.

• Postpaid ARPA growth guided at 2.5–3% annually.

• $52B capital allocation envelope for 2026–2027, with up to $30B for shareholder returns and $22B for strategic investments.