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T-Mobile Announces Q1 2023 Results

T-Mobile Media Release | April 27, 2023

Industry-Leading Postpaid and Broadband Customer Growth(1)

  • Postpaid net account additions of 287 thousand, best in industry
  • Postpaid net customer additions of 1.3 million, more than AT&T and Verizon combined and raising guidance
  • Postpaid phone net customer additions of 538 thousand, higher share of industry net adds year-over-year
  • Postpaid phone churn of 0.89%, only operator to improve year-over-year
  • High Speed Internet net customer additions of 523 thousand, more than AT&T, Verizon, Comcast and Charter combined for the 4th consecutive quarter

Differentiated Growth Strategy with Disciplined Focus on Profitability

  • Service revenues of $15.5 billion grew an industry-leading 3% year-over-year, including industry-leading Postpaid service revenue growth of 6% year-over-year
  • Net income of $1.9 billion grew 172% year-over-year and diluted earnings per share (“EPS”) of $1.58 grew 177% year-over-year, best in industry growth
  • Core Adjusted EBITDA(2) of $7.1 billion grew 9% year-over-year, best in industry growth and raising guidance
  • Net cash provided by operating activities of $4.1 billion grew 5% year-over-year, higher margins year-over-year and raising guidance
  • Adjusted Free Cash Flow(2) of $2.4 billion grew 46% year-over-year, best in industry margins and raising guidance
  • Repurchased 33.0 million shares of common stock in Q1 2023 for $4.8 billion

T-Mobile Reigns as Nationwide Overall Network Leader and Largest, Fastest and Most-Awarded 5G Network

  • Clean sweep across every category for overall network performance for the second quarter in a row from Ookla and continued wins across 5G network categories from Ookla and umlaut
  • 5G network covers 98% of Americans and Ultra-Capacity 5G covers 275 million people

Bellevue, WA — April 27, 2023 — T-Mobile US, Inc. (NASDAQ: TMUS) reported first quarter 2023 results today, raising 2023 guidance while translating its disciplined approach to profitable growth into industry-leading growth in both customers and profitability. The company is celebrating 10 years of Un-carrier moves and three years since the merger with Sprint by continuing its commitment to eliminate customer pain points while leading the industry in overall network experience. In its latest Un-carrier move, T-Mobile is delivering Phone Freedom by giving Carrier customers the flexibility to break free from ever-expanding device contracts, while providing even more value with the new Go5G Plus rate plan.

“T-Mobile’s focused execution against our intentional growth plan delivered best-in-class postpaid and broadband customer and profitability growth in Q1 that gave us confidence to raise our 2023 guidance for customers and profitability,” said T-Mobile CEO Mike Sievert. “For more than ten years, the Un-carrier has put customers first and we will continue to do just that. Our unique ability to offer the best network and best value, coupled with moves like Phone Freedom and our new Go5G plans, will only continue to fuel our profitable future growth in this competitive environment.”

Industry-Leading Postpaid and Broadband Customer Growth(1)

  • Postpaid net account additions of 287 thousand decreased 61 thousand year-over-year, reflecting continued industry-leading share of net account additions in an environment of industry growth normalization toward pre-pandemic levels.
  • Postpaid net customer additions of 1.3 million decreased 25 thousand year-over-year, reflecting continued normalization of industry growth.
  • Postpaid phone net customer additions of 538 thousand decreased 51 thousand year-over-year while reflecting a higher share of industry net additions. Postpaid phone churn of 0.89% improved 4 bps year-over-year.
  • Prepaid net customer additions of 26 thousand decreased 36 thousand year-over-year, and Prepaid churn was 2.76%.
  • High Speed Internet net customer additions of 523 thousand increased 185 thousand year-over-year. T-Mobile ended the quarter with 3.2 million High Speed Internet customers.
  • Total net customer additions of 1.3 million decreased 61 thousand year-over-year. The total customer count increased to a record high of 114.9 million.

Differentiated Growth Strategy with Disciplined Focus on Profitability

  • Total service revenues increased 3% year-over-year to $15.5 billion, which included Postpaid service revenue growth of 6% year-over-year.
  • Net income increased 172% year-over-year to $1.9 billion, which included lower merger-related costs, net of tax, of $268 million. Diluted EPS increased 177% year-over-year to $1.58 per share.
  • Core Adjusted EBITDA increased 9% year-over-year to $7.1 billion, primarily due to Service revenue growth and increased synergy realization.
  • Net cash provided by operating activities increased 5% year-over-year to $4.1 billion, which included cash payments for merger-related costs of $484 million.
  • Cash purchases of property and equipment, including capitalized interest, decreased 11% year-over-year to $3.0 billion driven by increased capital efficiencies from accelerated investments in the nationwide 5G network in 2022.
  • Adjusted Free Cash Flow increased 46% year-over-year to $2.4 billion, which included cash payments for merger-related costs of $484 million.
  • Common stock repurchases of 33.0 million shares for $4.8 billion in Q1 2023. As of April 21, 2023, the cumulative total repurchased was 59.4 million shares for $8.5 billion with remaining authorization of up to $5.5 billion through the end of September 2023.

T-Mobile Reigns as Nationwide Overall Network Leader and Largest, Fastest and Most-Awarded 5G Network

T-Mobile’s 5G network covers 326 million people with more geographic coverage than AT&T and Verizon combined. 275 million people nationwide are covered by T-Mobile’s super-fast Ultra Capacity 5G, and the Un-carrier plans to reach 300 million people with Ultra Capacity this year – nearly everyone in the country.

T-Mobile’s 5G leadership has translated into overall network leadership while 5G is increasingly becoming the overall network experience for customers. The Un-carrier continues its third-party report winning streak for overall network and 5G:

  • Ookla: In its latest Speedtest Global Index Market Analysis, T-Mobile repeated wins in every single category for overall network performance for the second consecutive quarter. T-Mobile’s network once again earned the top ranking for fastest speeds, most consistent, best video, lowest latency, best 5G performance and 5G availability.
  • umlaut: In its latest 5G Network Performance Audit Report, T-Mobile received top honors with the overall highest 5G score and was once again named as the most reliable 5G network in the country with the best 5G coverage, stability, and speeds.

Raising 2023 Guidance

  • Postpaid net customer additions are expected to be between 5.3 million and 5.7 million, an increase from prior guidance of 5.0 million to 5.5 million.
  • Core Adjusted EBITDA, which is Adjusted EBITDA less lease revenues, is expected to be between $28.8 billion and $29.2 billion, an increase from prior guidance of $28.7 billion to $29.2 billion.
  • Merger synergies are expected to be between $7.3 billion and $7.5 billion, an increase from prior guidance of $7.2 billion to $7.5 billion.
  • Merger-related costs are expected to be approximately $1.0 billion before taxes. These costs are excluded from Core Adjusted EBITDA but will impact Net income, Net cash provided by operating activities and Adjusted Free Cash Flow.
  • Net cash provided by operating activities, including payments for Merger-related costs, is expected to be between $17.9 billion and $18.3 billion, an increase from prior guidance of $17.8 billion to $18.3 billion.
  • Cash purchases of property and equipment, including capitalized interest, are expected to be between $9.4 billion and $9.7 billion.
  • Adjusted Free Cash Flow, including payments for Merger-related costs, is expected to be between $13.2 billion and $13.6 billion, an increase from prior guidance of $13.1 billion to $13.6 billion. Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization.

Doing Good — The Un-carrier Way — Industry Leader in Building a More Connected and Sustainable Future

T-Mobile continues to stay true to its commitment to use its network, scale and resources for good, building a more connected, equitable and sustainable future:

  • T-Mobile earned an A- (leadership level) on the 2022 CDP Climate Change assessment. The company also earned a place on the 2022 Supplier Engagement Leaderboard with an A rating, landing among the top 8% of companies assessed for supplier engagement around climate change.
  • The Un-carrier continued to lead the U.S. wireless industry in renewable energy use. T-Mobile sourced 100% of its purchased electricity from renewable energy in 2022.(1)
  • T-Mobile made progress on the DE&I Promises in its Equity In Action Plan, achieving over half of the Promises by the end of 2022 and remaining on track to achieve the remaining Promises by 2025.
  • T-Mobile launched the fifth Changemaker Challenge, a nationwide contest that gives young leaders an opportunity to turn their innovative ideas into solutions that create a more inclusive, equitable and sustainable future.

Financial Results

For more details on T-Mobile’s Q1 2023 financial results, including the Investor Factbook with detailed financial tables, please visit T-Mobile US, Inc.’s Investor Relations website at https://investor.t-mobile.com.

Earnings Call Information

Date/Time

  • Thursday, April 27, 2023, at 4:30 p.m. (EDT)

Access via Phone (audio only)

Please plan on accessing the call 10 minutes prior to the scheduled start time.

  • US/Canada: 877-390-2342
  • International: +1 309-216-6532

Access via Webcast

The earnings call will be broadcasted live and can be replayed via the Investor Relations website at https://investor.t-mobile.com.

Submit Questions via Twitter

Send a tweet to @TMobileIR or @MikeSievert using $TMUS

Contact Information

T-Mobile Social Media
Investors and others should note that we announce material financial and operational information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We also intend to use certain social media accounts as a means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR Twitter account (https://twitter.com/TMobileIR), the @MikeSievert Twitter account (https://twitter.com/MikeSievert), which Mr. Sievert also uses as a means for personal communications and observations, and the @TMobileCFO Twitter Account (https://twitter.com/tmobilecfo), and our CFO’s LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr. Osvaldik also uses as a means for personal communication and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.

About T-Mobile US, Inc.
T-Mobile US, Inc. (NASDAQ: TMUS) is America’s supercharged Un-carrier, delivering an advanced 4G LTE and transformative nationwide 5G network that will offer reliable connectivity for all. T-Mobile’s customers benefit from its unmatched combination of value and quality, unwavering obsession with offering them the best possible service experience and undisputable drive for disruption that creates competition and innovation in wireless and beyond. Based in Bellevue, Wash., T-Mobile provides services through its subsidiaries and operates its flagship brands, T-Mobile and Metro by T-Mobile. For more information please visit: https://www.t-mobile.com.

Forward-Looking Statements
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including information concerning T-Mobile US, Inc.’s future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions.

Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: competition, industry consolidation and changes in the market for wireless communication services and other forms of connectivity; criminal cyberattacks, disruption, data loss or other security breaches; our inability to take advantage of technological developments on a timely basis; our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture; system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems; the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use; the difficulties in maintaining multiple billing systems following the Merger (as defined below) and any unanticipated difficulties, disruption, or significant delays in our long-term strategy to convert Sprint’s legacy customers onto T-Mobile’s billing platforms; the impacts of the actions we have taken and conditions we have agreed to in connection with the regulatory proceedings and approvals of the Transactions (as defined below), including the acquisition by DISH Network Corporation (“DISH”) of the prepaid wireless business operated under the Boost Mobile and Sprint prepaid brands (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Personal Communications Company LLC (“Shentel”) and Swiftel Communications, Inc.), including customer accounts, inventory, contracts, intellectual property and certain other specified assets, and the assumption of certain related liabilities (collectively, the “Prepaid Transaction”), the complaint and proposed final judgment agreed to by us, Deutsche Telekom AG (“DT”), Sprint Corporation, now known as Sprint LLC (“Sprint”), SoftBank Group Corp. (“SoftBank”) and DISH with the U.S. District Court for the District of Columbia, which was approved by the Court on April 1, 2020, the proposed commitments filed with the Secretary of the Federal Communications Commission (“FCC”), which we announced on May 20, 2019, certain national security commitments and undertakings, and any other commitments or undertakings entered into, including but not limited to, those we have made to certain states and nongovernmental organizations (collectively, the “Government Commitments”), and the challenges in satisfying the Government Commitments in the required time frames and the significant cumulative costs incurred in tracking and monitoring compliance over multiple years; adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in inflation or interest rates, supply chain disruption, impacts of current geopolitical instability caused by the war in Ukraine; our inability to manage the ongoing commercial and transition services arrangements entered into in connection with the Prepaid Transaction, and known or unknown liabilities arising in connection therewith; the timing and effects of any future acquisition, divestiture, investment, or merger involving us; any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business; our inability to fully realize the synergy benefits from the merger (the “Merger”) with Sprint, pursuant to the Business Combination Agreement with Sprint and the other parties named therein (as amended, the “Business Combination Agreement” and the other transactions contemplated by the Business Combination Agreement (collectively, the “Transactions”) in the expected time frame; our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms or to comply with the restrictive covenants contained therein; changes in the credit market conditions, credit rating downgrades or an inability to access debt markets; restrictive covenants including the agreements governing our indebtedness and other financings; the risk of future material weaknesses we may identify, or any other failure by us to maintain effective internal controls, and the resulting significant costs and reputational damage; any changes in regulations or in the regulatory framework under which we operate; laws and regulations relating to the handling of privacy and data protection; unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings; our offering of regulated financial services products and exposure to a wide variety of state and federal regulations; new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations; our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked; our exclusive forum provision as provided in our Certificate of Incorporation; interests of DT, our controlling stockholder, that may differ from the interests of other stockholders; future sales of our common stock by DT and SoftBank and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the FCC; our 2022 Stock Repurchase Program may not be fully consummated, our share repurchase program may not enhance long-term stockholder value and other risks as disclosed in our most recent annual report on Form 10-K, 10-Q and other filings with the Securities and Exchange Commission (the “SEC”).

For our environmental, climate, or other “Environmental, Social, and Governance (ESG)” targets, goals and commitments outlined in this communication, we face additional risks and uncertainties, including unexpected delays, difficulties, and expenses in executing against such targets, goals and commitments, as well as changes in laws or regulations affecting us, such as changes in cybersecurity, data privacy, environmental, safety and health laws, and other risks as disclosed in our most recent annual report on Form 10-K, 10-Q and other filings with the SEC. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.

In addition, some of the statements contained in this communication may rely on third-party information and projections that management believes to be reputable; however, we do not independently verify or audit this information. This communication also contains ESG-related statements based on hypothetical scenarios and assumptions as well as estimates that are subject to a high level of uncertainty, and these statements should not necessarily be viewed as being representative of current or actual risk or performance, or forecasts of expected risk or performance. In addition, historical, current, and forward-looking environmental and social-related statements may be based on standards for measuring progress that are still developing, and internal controls and processes that continue to evolve. Forward-looking and other statements in this communication may also address our corporate responsibility and sustainability progress, plans, and goals, and the inclusion of such statements is not an indication that these contents are necessarily material for the purposes of complying with or reporting pursuant to the U.S. federal securities laws and regulations, even if we use the word “material” or “materiality” in this communication in relation to those statements. Website references throughout this communication are provided for convenience only, and the content on the referenced websites is not incorporated by reference into this communication.

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