Un-carrier Reaches Network Milestone by Covering 300 Million People with Ultra Capacity 5G Months Ahead of Schedule and Delivers its Lowest Q3 Postpaid Phone Churn in Company History
BELLEVUE, Wash.–(BUSINESS WIRE)–T-Mobile US, Inc. (NASDAQ: TMUS):
Industry-Leading Customer Growth Fueled by Best Network and Value Combination(1)
- Postpaid net account additions of 386 thousand, best in industry
- Postpaid net customer additions of 1.2 million, best in industry and raising guidance
- Postpaid phone net customer additions of 850 thousand, best in industry
- Postpaid phone churn of 0.87%, record low for Q3
- High Speed Internet net customer additions of 557 thousand, best in industry
Translating Customer Growth Into Industry-Leading Financial Growth
- Service revenues of $15.9 billion grew 4% year-over-year and Postpaid service revenues of $12.3 billion grew 6% year-over-year, both best in industry growth
- Net income of $2.1 billion grew 322% year-over-year and diluted earnings per share (“EPS”) of $1.82 grew 355% year-over-year, both best in industry growth
- Core Adjusted EBITDA(2) of $7.5 billion grew 12% year-over-year, best in industry growth and raising guidance
- Net cash provided by operating activities of $5.3 billion grew 21% year-over-year, best in industry growth and raising guidance
- Adjusted Free Cash Flow(2) of $4.0 billion grew 94% year-over-year, best in industry growth and raising guidance
- Repurchased $2.7 billion of common stock in Q3 2023 and $14.7 billion cumulatively as of October 20th
T-Mobile Reaches Major Network Milestone and Continues Reign as Nationwide Overall Network Leader
- 300 million Americans now covered by Ultra Capacity 5G, achieving the year-end goal more than two months ahead of schedule, while the total 5G network covers more than 330 million people (98% of Americans)
- Clean sweep across every category for overall network performance for the fourth quarter in a row from Ookla and best 5G availability in the world from Opensignal
T-Mobile US, Inc. (NASDAQ: TMUS) reported third quarter 2023 results today, outpacing the industry on customer growth, fueled by its best network and value combination across its unique growth opportunities. The Company continues to translate its industry-leading customer growth into best-in-class growth in service revenues, profitability and cash flow, while raising full-year 2023 guidance. T-Mobile continues delivering on its plan to return value to stockholders, buying back $2.7 billion of common stock throughout the quarter, while announcing the second tranche of its substantial capital return program and introducing a dividend for the first time in Company history. The Company also announced its Ultra Capacity 5G network now covers 300 million people with dedicated mid-band spectrum, reaching its 2023 goal over two months ahead of schedule.
“I’ve said it before and I’ll say it again: in this competitive environment, only T-Mobile can deliver the type of stellar results we saw in Q3 because only we can consistently deliver the best network and best value combination that customers want,” said Mike Sievert, CEO of T-Mobile. “This quarter’s best-in-class customer and financial growth, including our industry-leading postpaid net customer AND account adds and highest cash flow in Un-carrier history, paint a clear picture of a durable and differentiated strategy that is working. Our unmatched offering is bringing more and more consumers and businesses to the Un-carrier, including, for the first time ever, the highest share of postpaid switchers in smaller markets and rural areas. At the same time, we’re delivering significant shareholder value that will propel us into a future where we have plenty of room to run.”
___________________________________________________________
|
(1) |
AT&T Inc. historically does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net customer additions. Industry-leading claims are based on consensus expectations if results are not yet reported. |
|
|
(2) |
Core Adjusted EBITDA and Adjusted 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 GAAP financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables. 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 Net income, including, but not limited to, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable. Starting in Q1 2023, we renamed Free Cash Flow to Adjusted Free Cash Flow. This change in name did not result in any change to the definition or calculation of this non-GAAP financial measure. |
Industry-Leading Customer Growth Fueled by Best Network and Value Combination(1)
- Postpaid net account additions of 386 thousand were relatively flat year-over-year, reflecting continued industry-leading share of net account additions despite fewer High Speed Internet only net account additions.
- Postpaid net customer additions of 1.2 million decreased 401 thousand year-over-year. Postpaid net customer additions continue to reflect industry-leading net additions in postpaid phone and High Speed Internet, partially offset by deactivations of lower ARPU mobile internet devices in the educational sector that were originally activated during the Pandemic and no longer needed.
- Postpaid phone net customer additions of 850 thousand were relatively flat year-over-year, reflecting increased gross additions and lower churn, offset by increased deactivations from a customer base that grew 4%. Postpaid phone churn of 0.87% improved 1 basis point year-over-year.
- Prepaid net customer additions of 79 thousand decreased 26 thousand year-over-year, and Prepaid churn was 2.81%.
- High Speed Internet net customer additions of 557 thousand decreased 21 thousand year-over-year, reflecting continued growth in gross additions driven by increasing customer demand and lower churn, offset by increased deactivations from a customer base that doubled year-over-year, ending the quarter at 4.2 million customers.
- Total net customer additions of 1.3 million decreased 427 thousand year-over-year. The total customer count increased to a record high of 117.9 million.
|
|
Quarter |
|
Nine Months Ended |
|||||||||||
|
(in thousands, except churn) |
Q3 2023 |
|
Q2 2023 |
|
Q3 2022 |
|
2023 |
|
2022 |
|||||
|
Postpaid net account additions |
386 |
|
|
299 |
|
|
394 |
|
|
972 |
|
|
1,122 |
|
|
Total net customer additions |
1,305 |
|
|
1,685 |
|
|
1,732 |
|
|
4,309 |
|
|
4,914 |
|
|
Postpaid net customer additions |
1,226 |
|
|
1,561 |
|
|
1,627 |
|
|
4,080 |
|
|
4,601 |
|
|
Postpaid phone net customer additions |
850 |
|
|
760 |
|
|
854 |
|
|
2,148 |
|
|
2,166 |
|
|
Postpaid other net customer additions (2) |
376 |
|
|
801 |
|
|
773 |
|
|
1,932 |
|
|
2,435 |
|
|
Prepaid net customer additions (2) |
79 |
|
|
124 |
|
|
105 |
|
|
229 |
|
|
313 |
|
|
Total customers, end of period (2)(3) |
117,907 |
|
|
116,602 |
|
|
111,755 |
|
|
117,907 |
|
|
111,755 |
|
|
Postpaid phone churn |
0.87 |
% |
|
0.77 |
% |
|
0.88 |
% |
|
0.84 |
% |
|
0.87 |
% |
|
Prepaid churn |
2.81 |
% |
|
2.62 |
% |
|
2.88 |
% |
|
2.73 |
% |
|
2.71 |
% |
|
High Speed Internet net customer additions |
557 |
|
|
509 |
|
|
578 |
|
|
1,589 |
|
|
1,476 |
|
|
Total High Speed Internet customers, end of period |
4,235 |
|
|
3,678 |
|
|
2,122 |
|
|
4,235 |
|
|
2,122 |
|
|
(1) |
AT&T Inc. historically does not disclose postpaid net account additions. Comcast and Charter do not disclose postpaid phone net customer additions. Industry-leading claims are based on consensus expectations if results are not yet reported. |
|
|
(2) |
Includes High Speed Internet customers. |
|
|
(3) |
Customers impacted by the decommissioning of the legacy Sprint CDMA and LTE and T-Mobile UMTS networks have been excluded from our customer base resulting in the removal of 212,000 postpaid phone customers and 349,000 postpaid other customers in the first quarter of 2022 and 284,000 postpaid phone customers, 946,000 postpaid other customers and 28,000 prepaid customers in the second quarter of 2022. In connection with our acquisition of companies, we included a base adjustment in the first quarter of 2022 to increase postpaid phone customers by 17,000 and reduce postpaid other customers by 14,000. Certain customers now serviced through reseller contracts were removed from our reported postpaid customer base resulting in the removal of 42,000 postpaid phone customers and 20,000 postpaid other customers in the second quarter of 2022. |
Translating Customer Growth Into Industry-Leading Financial Growth(1)
- Total service revenues of $15.9 billion increased 4% year-over-year, and Postpaid service revenues of $12.3 billion increased 6% year-over-year.
- Net income of $2.1 billion increased $1.6 billion year-over-year, which included Merger-related costs, net of tax, of $114 million and severance and related costs associated with the August 2023 workforce reduction, net of tax, of $353 million. Diluted EPS of $1.82 per share increased $1.42 per share year-over-year.
- Core Adjusted EBITDA of $7.5 billion increased 12% year-over-year, primarily due to Service revenue growth and increased synergy realization.
- Net cash provided by operating activities of $5.3 billion increased 21% year-over-year, which included cash payments for Merger-related costs of $345 million.
- Cash purchases of property and equipment, including capitalized interest, of $2.4 billion decreased 33% year-over-year, driven by increased capital efficiencies from accelerated investments in the nationwide 5G network in 2022.
- Adjusted Free Cash Flow of $4.0 billion increased 94% year-over-year, which included cash payments for Merger-related costs of $345 million.
- Stockholder Returns included 19.3 million shares of common stock repurchased for $2.7 billion in Q3 2023, with 104.3 million cumulative shares repurchased for $14.7 billion as of October 20, 2023. Including a declared $0.65 per share dividend that will be paid on December 15, 2023, the remaining authorization for additional stock repurchases and dividends through December 2024 is $17.5 billion.
|
|
Quarter |
|
Nine Months Ended |
|
Q3 2023 vs. Q2 2023 |
|
Q3 2023 vs. Q3 2022 |
|
YTD 2023 vs. YTD 2022 |
||||||||||||||
|
(in millions, except EPS) |
Q3 2023 |
|
Q2 2023 |
|
Q3 2022 |
2023 |
|
2022 |
|
|
|||||||||||||
|
Total service revenues |
$ |
15,914 |
|
$ |
15,738 |
|
$ |
15,361 |
|
$ |
47,198 |
|
$ |
45,805 |
|
1.1 |
% |
|
3.6 |
% |
|
3.0 |
% |
|
Postpaid service revenues |
|
12,288 |
|
|
12,070 |
|
|
11,548 |
|
|
36,220 |
|
|
34,194 |
|
1.8 |
% |
|
6.4 |
% |
|
5.9 |
% |
|
Total revenues |
|
19,252 |
|
|
19,196 |
|
|
19,477 |
|
|
58,080 |
|
|
59,298 |
|
0.3 |
% |
|
(1.2 |
)% |
|
(2.1 |
)% |
|
Net income |
|
2,142 |
|
|
2,221 |
|
|
508 |
|
|
6,303 |
|
|
1,113 |
|
(3.6 |
)% |
|
321.7 |
% |
|
466.3 |
% |
|
Diluted EPS |
|
1.82 |
|
|
1.86 |
|
|
0.40 |
|
|
5.26 |
|
|
0.88 |
|
(2.2 |
)% |
|
355.0 |
% |
|
497.7 |
% |
|
Adjusted EBITDA |
|
7,600 |
|
|
7,405 |
|
|
7,039 |
|
|
22,204 |
|
|
20,993 |
|
2.6 |
% |
|
8.0 |
% |
|
5.8 |
% |
|
Core Adjusted EBITDA |
|
7,547 |
|
|
7,336 |
|
|
6,728 |
|
|
21,935 |
|
|
19,809 |
|
2.9 |
% |
|
12.2 |
% |
|
10.7 |
% |
|
Net cash provided by operating activities |
|
5,294 |
|
|
4,355 |
|
|
4,391 |
|
|
13,700 |
|
|
12,445 |
|
21.6 |
% |
|
20.6 |
% |
|
10.1 |
% |
|
Cash purchases of property and equipment, including capitalized interest |
|
2,424 |
|
|
2,789 |
|
|
3,634 |
|
|
8,214 |
|
|
10,587 |
|
(13.1 |
)% |
|
(33.3 |
)% |
|
(22.4 |
)% |
|
Adjusted Free Cash Flow |
|
4,003 |
|
|
2,877 |
|
|
2,065 |
|
|
9,281 |
|
|
5,472 |
|
39.1 |
% |
|
93.8 |
% |
|
69.6 |
% |
|
(1) |
Industry-leading claims are based on consensus expectations if results are not yet reported. |
T-Mobile Reaches Major Network Milestone and Continues Reign as Nationwide Overall Network Leader
T-Mobile’s Ultra Capacity 5G network covers 300 million people, over three times the square miles of AT&T and two times Verizon. Total 5G covers more than 330 million people (98% of Americans) and two million square miles, more square miles than AT&T and Verizon combined.
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 beat the competition, winning every single category for overall network, including fastest provider, lowest latency, most consistent and best mobile video. The Company also remained undefeated for 5G performance for the fifth quarter in a row, including repeat wins for best 5G performance and 5G consistency.
- Opensignal: In its latest Global Mobile Network Experience Report, T-Mobile was named best in the world for 5G availability. For the third year in a row, the Company was the only US operator to win a 5G global award.
|
Note: See 5G device, coverage, & access details at T-Mobile.com. Fastest: Based on median, overall combined speeds according to analysis by Ookla® of Speedtest Intelligence® data download speeds for Q3 2023. Ookla trademarks used under license and reprinted with permission. |
Raising 2023 Guidance
- Postpaid net customer additions are expected to be between 5.7 million and 5.9 million, an increase from prior guidance of 5.6 million to 5.9 million.
- Core Adjusted EBITDA, which is Adjusted EBITDA less lease revenues, is expected to be between $29.0 billion and $29.2 billion, an increase from prior guidance of $28.9 billion to $29.2 billion.
- Merger synergies are expected to be approximately $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 $18.3 billion and $18.5 billion, an increase from prior guidance of $18.0 billion to $18.3 billion.
- Cash purchases of property and equipment, including capitalized interest, are expected to be between $9.6 billion and $9.8 billion, an increase from the prior guidance of $9.5 billion to $9.7 billion.
- Adjusted Free Cash Flow, including payments for Merger-related costs, is expected to be between $13.4 billion and $13.6 billion, an increase from prior guidance of $13.2 billion to $13.6 billion. Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization.
|
(in millions, except Postpaid net customer additions) |
Previous |
|
Current |
|
Change |
||||
|
Postpaid net customer additions (thousands) |
5,600 |
|
5,900 |
|
5,700 |
|
5,900 |
|
50 |
|
Net income (1) |
N/A |
|
N/A |
|
N/A |
|
N/A |
|
N/A |
|
Core Adjusted EBITDA (2) |
$ 28,900 |
|
$ 29,200 |
|
$ 29,000 |
|
$ 29,200 |
|
$ 50 |
|
Merger synergies |
~7,500 |
|
~7,500 |
|
— |
||||
|
Merger-related costs (3) |
~1,000 |
|
~1,000 |
|
— |
||||
|
Net cash provided by operating activities |
18,000 |
|
18,300 |
|
18,300 |
|
18,500 |
|
250 |
|
Capital expenditures (4) |
9,500 |
|
9,700 |
|
9,600 |
|
9,800 |
|
100 |
|
Adjusted Free Cash Flow (5) |
13,200 |
|
13,600 |
|
13,400 |
|
13,600 |
|
100 |
|
(1) |
T-Mobile is 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 and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable. |
|
|
(2) |
Management uses Core Adjusted EBITDA as a measure to monitor the financial performance of Company operations, excluding the impact of lease revenues from related device financing programs. Guidance ranges assume lease revenues of approximately $300 million for 2023. |
|
|
(3) |
Merger-related costs are excluded from Core Adjusted EBITDA but will impact Net income, Net cash provided by operating activities and Adjusted Free Cash Flow. |
|
|
(4) |
Capital expenditures means cash purchases of property and equipment, including capitalized interest. |
|
|
(5) |
Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization in 2023. |
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. Most recently:
- T-Mobile’s Network, Emergency Management and Community Support teams supported Maui residents, communities and first responders. T-Mobile’s Emergency Response team also worked closely with FEMA, the State of Hawaii and other agencies to provide connectivity in critical locations as well as activated phones with Wireless Priority Service during the Maui wildfires.
- Since announcing the significant five-year commitment to small towns in April 2021, the Un-carrier has given over $10 million in Hometown Grants to a total of 225 communities to bring community projects to life across 42 states and support stronger, healthier and more connected communities.
- RE100 announced T-Mobile as a finalist in the Changemaker category for the RE100 Annual Leadership Award, recognizing the Un-carrier’s renewable electricity achievements.
Financial Results
For more details on T-Mobile’s Q3 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
- Wednesday, October 25, 2023, at 8:00 a.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
- Media Relations: [email protected]
- Investor Relations: [email protected]
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 communications 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.
Contacts
Media Relations: [email protected]
Investor Relations: [email protected]
