T-Mobile Sets More Records in Q2: Strongest Q2 Customer Growth in Years, Record-Low Churn and Record Financial Results

July 25, 2019

Record-Low Postpaid Phone Churn of 0.78%, Record Service Revenues of $8.4B, Record Q2 Net Income of $939M, Record Adjusted EBITDA of $3.5B and Total Net Customer Additions of 1.8M


Record-Low Postpaid Phone Churn of 0.78%, Record Service Revenues of $8.4B, Record Q2 Net Income of $939M, Record Adjusted EBITDA of $3.5B and Total Net Customer Additions of 1.8M


Accelerated Customer Growth

  • 1.8 million total net additions in Q2 2019, up 11% YoY
  • 1.1 million branded postpaid net additions in Q2 2019, up 9% YoY, expected to be best in the industry
  • 710,000 branded postpaid phone net additions in Q2 2019, up 3% YoY, expected to be best in the industry
  • 131,000 branded prepaid net additions in Q2 2019, up 44% YoY
  • All-time record-low branded postpaid phone churn of 0.78% in Q2 2019, down 17 bps YoY


Record Q2 Financial Performance
(all percentages year-over-year)

  • Record Service revenues of $8.4 billion, up 6% in Q2 2019 with Branded postpaid service revenues up 9%
  • Record Q2 Total revenues of $11.0 billion, up 4% in Q2 2019
  • Record Q2 Net income of $939 million, up 20% in Q2 2019
  • Record Q2 Diluted earnings per share (“EPS”) of $1.09, up 18% in Q2 2019
  • Record Adjusted EBITDA(1) $3.5 billion, up 7% in Q2 2019
  • Record Q2 Net cash provided by operating activities of $2.1 billion, up 70% in Q2 2019
  • Free Cash Flow(1) of $1.2 billion, up 51% in Q2 2019


Taking Major Steps Towards Nationwide 5G

  • On track to launch the first nationwide 5G network available next year; 99% of Americans now covered with 4G LTE
  • Aggressive deployment of 600 MHz using 5G ready equipment; 4G LTE on 600 MHz now covering 156 million people and 1.2 million square miles
  • 5G millimeter wave (mmWave) network introduced in 6 cities including New York and Los Angeles
  • Successful participation in mmWave auctions; average nationwide mmWave spectrum position more than quadrupled


Continued Strong Outlook for 2019

  • Branded postpaid net additions of 3.5 to 4.0 million, up from prior guidance of 3.1 to 3.7 million
  • Net income is not available on a forward-looking basis(2)
  • Adjusted EBITDA target of $12.9 to $13.3 billion, which includes leasing revenues of $550 to $600 million, up from prior guidance of $12.7 to $13.2 billion(1)
  • Cash purchases of property and equipment, excluding capitalized interest of approximately $400 million, are expected to be at the very high end of $5.4 to $5.7 billion; Cash purchases of property and equipment, including capitalized interest, are expected to be at the very high end 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 33% to 35%, a narrowing of the prior target range
  • 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 Q3 2019, pre-close merger-related costs are expected to be $150 to $200 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.


T-Mobile US, Inc. (NASDAQ: TMUS) reported another strong quarter in Q2 2019 as we continue to set performance records. America’s Un-carrier reported all-time record-low branded postpaid phone churn and record financial results including record-high service revenue, record Q2 net income, and record Adjusted EBITDA. In addition, we reported our strongest Q2 customer growth in years with customer growth that accelerated year-over-year and demonstrates that T-Mobile’s incredible momentum continues.

Customers no longer have to choose between network quality or low prices. At T-Mobile they get both, making America’s Un-carrier the best value in wireless. In addition, customer experience continues to be a key differentiator for T-Mobile. We continue to lead the industry in customer care - by delivering an unmatched customer experience with our Team of Experts, which drives our record-high levels of customer satisfaction while delivering operational efficiencies. T-Mobile continues to invest in its network and continues to prepare for nationwide 5G with the aggressive rollout of its 600 MHz spectrum. T-Mobile isn’t stopping there and continues to make investments that help lay the foundation for the future and find new areas of growth.

In the second quarter, customers joined and are staying with T-Mobile in record numbers. Q2 marks the 25th quarter in a row where we delivered more than 1 million total net customer additions, and another quarter in which customer growth accelerated year-over-year. We also posted branded postpaid phone churn of 0.78%, an all-time record-low and set records for a number of financial metrics in the second quarter including: record service revenues of $8.4 billion, record Q2 net income of $939 million, and record Adjusted EBITDA of $3.5 billion.

“The T-Mobile team of rock stars delivers quarter, after quarter, after quarter! Record-low customer churn and our best Q2 customer numbers in years. This is in addition to record service revenue, record Q2 net income, and record Adjusted EBITDA.” said John Legere, CEO of T-Mobile. “We continue to build out our nationwide 5G network with an aggressive deployment of 600 MHz on 5G equipment and increase our spectrum portfolio through an incredibly successful FCC auction - investing $842 million which more than quadruples our mmWave holdings. Our momentum continues and we won’t stop!"

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

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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 changes in data privacy laws; 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