T-Mobile Maintains Unprecedented Momentum in Q3 and Sets the Stage for the First Nationwide 5G Network Launch in 2019

T-Mobile Press Release | October 28, 2019

Total Net Additions of 1.7M, Record-Low Q3 Branded Postpaid Phone Churn of 0.89%, Record Service Revenues of $8.6B, Record Q3 Net Income of $870M and Record Q3 Adj. EBITDA of $3.4B

Strong Customer Growth

• 1.7 million total net additions in Q3 2019 – record 26th consecutive quarter of more than 1 million total net additions
• 1.1 million branded postpaid net additions in Q3 2019 – best in the industry
• 754,000 branded postpaid phone net additions in Q3 2019 – best in the industry
• 62,000 branded prepaid net additions in Q3 2019, up 27,000 YoY
• Record-low Q3 branded postpaid phone churn of 0.89% in Q3 2019, down 13 bps YoY

Record Q3 Financial Performance (all percentages year-over-year)

• Record Service revenues of $8.6 billion, up 6% in Q3 2019 with Branded postpaid revenues up 10%
• Record Q3 Total revenues of $11.1 billion, up 2% in Q3 2019
• Record Q3 Net income of $870 million, up 9% in Q3 2019
• Record Q3 Diluted earnings per share (“EPS”) of $1.01, up 9% in Q3 2019
• Record Q3 Adjusted EBITDA(1) of $3.4 billion, up 5% in Q3 2019
• Record Q3 Net cash provided by operating activities of $1.7 billion, up 91% in Q3 2019
• Record Q3 Free Cash Flow(1) of $1.1 billion, up 27% in Q3 2019

Taking Major Steps Towards Nationwide 5G

• Accelerated the planned launch of the first nationwide 5G network, utilizing 600 MHz spectrum, to this year, forming the foundational 5G coverage layer for New T-Mobile
• 600 MHz now reaching nearly 8,300 cities and towns in 48 states and Puerto Rico
• 4G LTE on 600 MHz now covers 200 million people and 1.4 million square miles
• More than 26 million 600 MHz compatible devices already on our network

Continued Strong Outlook for 2019

• Branded postpaid net additions of 4.1 to 4.3 million, up from prior guidance of 3.5 to 4.0 million
• Net income is not available on a forward-looking basis(2)
• Adjusted EBITDA target of $13.1 to $13.3 billion, which includes leasing revenues of $550 to $600 million, up at the midpoint from prior guidance of $12.9 to $13.3 billion(1)
• Cash purchases of property and equipment, excluding capitalized interest of approximately $450 million (up from prior guidance of $400 million), are expected to be $5.9 to $6.0 billion, up $200 to $300 million from the high end of the prior guidance range, reflecting the rapid rollout of 600 MHz spectrum, which sets the foundation for our accelerated plan to launch the first nationwide 5G network this year. Cash purchases of property and equipment, including capitalized interest, are expected to be $6.35 to $6.45 billion, up from the prior guidance of $5.8 to $6.1 billion
• Three-year compound annual growth rate (“CAGR”) from FY 2016 to FY 2019 for Net cash provided by operating activities, excluding payments for merger-related costs, is expected to be at 36% to 37%, an increase and narrowing from the prior target range of 33% to 35%
• Three-year CAGR from FY 2016 to FY 2019 for Free Cash Flow, excluding payments for merger-related costs, is unchanged at 46% to 48%(1)
• In Q4 2019, pre-close merger-related costs are expected to be $125 million to $150 million before taxes

(1) Adjusted EBITDA and Free Cash Flow are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables.
(2) We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income including, but not limited to, Income tax expense, stock-based compensation expense and Interest expense. Adjusted EBITDA should not be used to predict Net income as the difference between the two measures is variable.

BELLEVUE, Wash. – October 28, 2019 – T-Mobile US, Inc. (NASDAQ: TMUS) reported another strong quarter in Q3 2019 as we continue to maintain our unprecedented momentum and set even more performance records. America’s Un-carrier reported record high service revenues and record third-quarter financial results including net income, Adjusted EBITDA, net cash provided by operating activities and free cash flow. In addition, we reported our 26th consecutive quarter with more than 1 million total customer net adds and continue to lead the industry in postpaid phone net adds.
Customers show that they want to do business with a company that treats them right and changes the rules of the industry in their favor, and that’s what differentiates the Un-carrier from the competition. T-Mobile is known for its unrivaled customer experience obsession and the best customer care in the industry, with Team of Experts, and this has resulted in record-low Q3 branded postpaid phone churn and all-time high customer satisfaction scores.
T-Mobile continues to invest in building its nationwide 4G LTE network and continues to roll out 600 MHz spectrum, which now covers 200 million Americans and is live in nearly 8,300 cities and towns across 48 states and Puerto Rico. In addition, T-Mobile accelerated plans to launch America’s first nationwide 5G network on 600 MHz spectrum, which we expect will be live later this year. Our 600 MHz spectrum will be the foundational layer for the New T-Mobile’s 5G Network that once combined with Sprint’s spectrum, will result in a broad and deep nationwide 5G experience for everyone, everywhere.
“Q3 2019 was another blockbuster quarter for T-Mobile! Once again we set new records, including our 26th quarter in a row with more than 1 million net additions. And the Un-carrier is leading the industry in postpaid phone net adds – again,” said John Legere, CEO of T-Mobile. “Our team has been hard at work deploying 600 MHz spectrum and we have accelerated our plans to launch a foundational layer of 5G nationwide later this year. On top of that, the tremendous benefits of our merger with Sprint are just as compelling today as when we announced the deal and we look forward to completing the remaining steps so the New T-Mobile can get started delivering the incredible benefits to American consumers!”
Strong Customer Growth
T-Mobile continues to deliver strong customer growth, and in Q3 2019 set a record of 26 consecutive quarters of more than 1 million total net customer additions. We once again led the industry in branded postpaid phone net customer additions.

• Total net customer additions were 1.7 million in Q3 2019, up 117,000 from Q3 2018, bringing our total customer count to 84.2 million, and marking the 26th straight quarter in which T-Mobile generated more than 1 million total net customer additions.
• Branded postpaid net customer additions were 1.1 million in Q3 2019, down 5,000 from Q3 2018. We led the industry in this category.
• Branded postpaid phone net customer additions were 754,000 in Q3 2019, down 20,000 from Q3 2018. Q3 2019 was the 23rd consecutive quarter in which T-Mobile led the industry in this category.

Link to complete T-Mobile Press Release

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