T-Mobile Reports Accelerated Customer Growth, All-Time Record-Low Churn, and Best Ever Q1 Financial Results

April 25, 2019

Customer Net Additions of 1.7M and Record-Low Postpaid Phone Churn of 0.88%; Record Service Revenue of $8.3B, Record Q1 Net Income of $908M and Record Adjusted EBITDA of $3.3B


Customer Net Additions of 1.7M and Record-Low Postpaid Phone Churn of 0.88%; Record Service Revenue of $8.3B, Record Q1 Net Income of $908M and Record Adjusted EBITDA of $3.3B


Accelerated Customer Growth

  • 1.7 million total net additions in Q1 2019, up 15% YoY
  • 1.0 million branded postpaid net additions in Q1 2019, expect to be best in the industry
  • 656,000 branded postpaid phone net additions in Q1 2019, expect to be best in the industry
  • 69,000 branded prepaid net additions in Q1 2019
  • Record-low branded postpaid phone churn of 0.88% in Q1 2019, down 19 bps YoY


Record Q1 Financial Performance
(all percentages year-over-year)

  • Record Service revenues of $8.3 billion, up 6% in Q1 2019 with Branded postpaid service revenues up 8%
  • Record Q1 Total revenues of $11.1 billion, up 6% in Q1 2019
  • Record Q1 Net income of $908 million, up 35% in Q1 2019
  • Record Q1 Diluted earnings per share (“EPS”) of $1.06, up 36% in Q1 2019
  • Record Adjusted EBITDA(1) of $3.3 billion, up 11% in Q1 2019
  • Strong Net cash provided by operating activities of $1.4 billion, up 81% in Q1 2019 due to higher Net income and lower net cash outflows from changes in working capital
  • Free Cash Flow(1) of $618 million, down 7% in Q1 2019 due to accelerated capital expenditures and the impact of merger-related costs


Industry Leading Network Performance

  • 99% of Americans now covered with a 4G LTE network that is second to none
  • Fastest combined average of download and upload speeds for 21 quarters in a row
  • Aggressive deployment of 600 MHz using 5G ready equipment, now reaching nearly 3,500 cities and towns
  • On track to have the first nationwide 5G network available next year


Continued Strong Outlook for 2019

  • Branded postpaid net additions of 3.1 to 3.7 million, up from prior guidance of 2.6 to 3.6 million
  • Net income is not available on a forward-looking basis(2)
  • Adjusted EBITDA target of $12.7 to $13.2 billion, which includes leasing revenues of $0.6 to $0.7 billion(1)
  • Cash purchases of property and equipment, excluding capitalized interest of approximately $400 million, of $5.4 to $5.7 billion and cash purchases of property and equipment, including capitalized interest, 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 32% to 35%, up from prior guidance of 17% to 21% driven primarily by improvements in the contractual terms of factoring agreements which led to an accounting geography change but do not impact overall cash flow
  • 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)
  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.


T-Mobile US, Inc. (NASDAQ: TMUS) reported another record quarter in Q1 2019, with customer growth that accelerated year-over-year, all-time record-low postpaid phone churn, and record first quarter financials. The Un-carrier is off to a fast start to the year, delivering record-high Service revenues, record Q1 Net income and record Adjusted EBITDA - all while expecting to lead the industry in postpaid phone growth for the 21st consecutive quarter. This is further proof that doing right by customers is also good for business.

T-Mobile continues to give more value to customers without asking more from them, and customers responded once again this quarter. Q1 marks the 24th quarter in a row where T-Mobile delivered greater than 1 million total customer net additions, and another quarter with customer growth that accelerated year-over-year. The company also posted postpaid phone churn of 0.88% - an all-time record low for T-Mobile.

Investments that began years ago in new geographies, new customer segments and customer care continue to fuel T-Mobile’s momentum. The company continued to see strong response from new customer segments and rate plans, including T-Mobile for Business. Customer care continues to contribute to the strong results with T-Mobile’s Team of Experts continuing to drive record high levels of customer satisfaction while delivering operational efficiencies. T-Mobile isn’t stopping there and continues to make investments in future growth.

“Our results speak for themselves and our business continues to fire on all cylinders! Record Service revenues, record Q1 Net income and record Adjusted EBITDA - all while we continue to share the story and lay out the facts that our game changing merger with Sprint will be a win for consumers,” said John Legere, CEO of T-Mobile. “We’re off to a fast start in 2019 with customer growth that accelerated year-over-year, record low churn and we expect to lead the industry in postpaid phone growth. We’re executing on our business plan and our guidance shows that we expect our momentum to continue.”

For the full release and Fact Book, go to the T-Mobile Investor Relations page.

Forward-Looking Statements
This news release 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,” “expect,” “believe,” “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: the failure to obtain, or delays in obtaining, required regulatory approvals for the merger contemplated under the Business Combination Agreement with Sprint Corporation (“Sprint”), and related transactions (collectively, the “Transactions”) and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transactions, or the failure to satisfy any of the other conditions to the Transactions on a timely basis or at all; the occurrence of events that may give rise to a right of one or both of the parties to terminate the Business Combination Agreement with Sprint; adverse effects on the market price of our common stock or on our or Sprint’s operating results because of a failure to complete the Transactions in the anticipated timeframe or at all; inability to obtain the financing contemplated to be obtained in connection with the Transactions on the expected terms or timing or at all; the ability of us, Sprint and the combined company to make payments on debt or to repay existing or future indebtedness when due or to comply with the covenants contained therein; adverse changes in the ratings of our or Sprint’s debt securities or adverse conditions in the credit markets; negative effects of the announcement, pendency or consummation of the Transactions on the market price of our common stock and on our or Sprint’s operating results, including as a result of changes in key customer, supplier, employee or other business relationships; significant costs related to the Transactions, including financing costs, and unknown liabilities of Sprint or that may arise; failure to realize the expected benefits and synergies of the Transactions in the expected timeframes or at all; costs or difficulties related to the integration of Sprint’s network and operations into our network and operations; the risk of litigation or regulatory actions related to the Transactions; the inability of us, Sprint or the combined company to retain and hire key personnel; the risk that certain contractual restrictions contained in the Business Combination Agreement with Sprint during the pendency of the Transactions could adversely affect our or Sprint’s ability to pursue business opportunities or strategic transactions; adverse economic, political or market conditions in the U.S. and international markets; competition, industry consolidation, and changes in the market for wireless services, which could negatively affect our ability to attract and retain customers; the effects of any future merger, investment, or acquisition involving us, as well as the effects of mergers, investments, or acquisitions in the technology, media and telecommunications industry; challenges in implementing our business strategies or funding our operations, including payment for additional spectrum or network upgrades; the possibility that we may be unable to renew our spectrum licenses on attractive terms or acquire new spectrum licenses at reasonable costs and terms; difficulties in managing growth in wireless data services, including network quality; material changes in available technology and the effects of such changes, including product substitutions and deployment costs and performance; the timing, scope and financial impact of our deployment of advanced network and business technologies; the impact on our networks and business from major technology equipment failures; breaches of our and/or our third-party vendors’ networks, information technology and data security, resulting in unauthorized access to customer confidential information; natural disasters, terrorist attacks or similar incidents; unfavorable outcomes of existing or future litigation; any changes in the regulatory environments in which we operate, including any increase in restrictions on the ability to operate our networks and data privacy laws; any disruption or failure of our third parties’ or key suppliers’ provisioning of products or services; material adverse changes in labor matters, including labor campaigns, negotiations or additional organizing activity, and any resulting financial, operational and/or reputational impact; changes in accounting assumptions that regulatory agencies, including the Securities and Exchange Commission (“SEC”), may require, which could result in an impact on earnings; changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions; the possibility that the reset process under our trademark license with Deutsche Telekom AG results in changes to the royalty rates for our trademarks; the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property of others; our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective; the occurrence of high fraud rates related to device financing, credit card, dealers, or subscriptions; and interests of a majority stockholder may differ from the interests of other stockholders. You should not place undue reliance on these forward-looking statements. We do not undertake to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.