News T-Mobile Reports Industry-Leading Customer Growth & Record Financial Performance in Q1 2020

Industry-Leading Customer Growth
  • 777,000 branded postpaid net additions in Q1 2020, best in industry
  • 452,000 branded postpaid phone net additions in Q1 2020, best in industry
  • 649,000 total branded net additions in Q1 2020, best in industry
  • Record-low Q1 branded postpaid phone churn of 0.86% in Q1 2020, down 2 bps YoY
  • Record-low Q1 branded prepaid churn of 3.52% in Q1 2020, down 33 bps YoY
     
Record Financial Performance (all percentages year-over-year)
  • Record Service revenues of $8.7 billion, up 5% in Q1 2020, with Branded postpaid service revenues up 7%
  • Record Q1 Net income of $951 million, up 5% in Q1 2020
  • Record Q1 Diluted earnings per share (“EPS”) of $1.10, up 4% in Q1 2020
  • Record Adjusted EBITDA(1) of $3.7 billion, up 12% in Q1 2020
  • Record Q1 Net cash provided by operating activities of $1.6 billion, up 16% in Q1 2020
  • Record Q1 Free Cash Flow(1) of $732 million, up 18% in Q1 2020
     
Expanding 5G Network Capabilities
  • Rapid start to deploying 5G sites in Philadelphia and New York City using Sprint’s 2.5 GHz mid-band spectrum on T-Mobile’s 5G network
  • After launching America’s first nationwide 5G network on our 600 MHz spectrum in December 2019, we further expanded our 5G footprint across an additional 1,600 sites in Q1 2020 and ramped pace to 1,000 sites in April 2020
  • 600 MHz 5G now covers 215 million people including the cities of Detroit, St. Louis and Columbus with the Bay Area added this week and more cities coming online soon
  • Over 50 million New T-Mobile devices have access to the 600 MHz LTE network and 5G access is being made available to Sprint customers
     
COVID-19 - Providing Essential Connectivity, While Ensuring Employee Safety
  • Partnered with multiple spectrum holders and the FCC to temporarily deploy additional 600 MHz spectrum, effectively doubling total 600 MHz LTE capacity across the nation
  • We committed to the FCC’s Keep Americans Connected pledge by maintaining service and waiving late fees for residential and small business customers impacted by COVID-19
  • Accelerated the launch of T-Mobile Connect - T-Mobile’s lowest priced smartphone plan ever
  • In mid-March, before the merger with Sprint, we closed approximately 80% of our company-owned retail stores, implemented remote working arrangements for our care teams and encouraged our employees to work remotely
  • In compliance with the regulations in various states, we have since reopened a number of our previously closed stores
  • We perform incremental deep cleaning and keep additional cleaning products stocked in the stores that remain open
  • We supplemented pay to certain of our employees and commissions for third-party dealers impacted by COVID-19
     
Sprint - Supercharging the Un-carrier, Unlocking Potential and Increasing Competition
  • On April 1, 2020, we closed on our merger with Sprint, supercharging the Un-carrier
  • We expect to be able to rapidly build the world’s best 5G network, accelerating innovation and increasing competition in the U.S. wireless, video and broadband industries
  • Customers are already seeing the benefits with millions of Sprint customers now able to access our LTE network
  • Sprint customers now have access to more than double the number of LTE sites than on Sprint’s network alone
  • Synergies have the potential to unlock massive scale and unleash an expected $43 billion in value for shareholders
     

(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.
 

 

T-Mobile US, Inc. (NASDAQ: TMUS) delivered a record-setting first quarter in 2020, reporting industry-leading customer growth and record first quarter financials despite this uncertain environment. Following another successful year in 2019, America’s Un-carrier started 2020 off strong, delivering record service revenues, record Q1 net income and record Adjusted EBITDA - all while continuing to lead the industry in postpaid phone net customer additions for the 25th consecutive quarter.

T-Mobile successfully completed its merger with Sprint, on April 1, 2020, to the create the New T-Mobile, laying the foundation for its future as the growth company in telecom. In the years ahead, the combined company sees a significant value creation opportunity as it works to unlock the potential of the increased scale from the combination and the achievement of an expected $43 billion in synergies. The result will be a dramatically lower cost structure and the ability to deliver better services at lower prices. In a very short time, the company has made progress on building the world’s best 5G network, which we expect to yield massive increases in capacity, 14 times standalone T-Mobile within 6 years, finally breaking down the industry trade-off between a better value or a better network - with the New T-Mobile, customers will get both.

Connectivity is more essential than ever in the current climate, and we have once again shown that we will always be there to serve our customers. Amid the COVID-19 pandemic, T-Mobile immediately implemented response and relief efforts by temporarily deploying additional 600 MHz spectrum through agreements with multiple spectrum holders and the FCC - effectively doubling our total 600 MHz LTE capacity across the country, modifying our policies to ensure customers can stay connected when they need it most by temporarily removing data caps from select plans and offering 20GB of additional hotspot data to every customer with a smartphone hotspot, and accelerating the launch of T-Mobile Connect - our lowest priced smartphone plan ever - to help ensure everyone can get connected, and stay connected, affordably. We strengthened our network, served our retail customers with creative new solutions, and reconfigured our award-winning customer care to continue providing essential services in these uncertain times while working from home. As the economy rebounds, New T-Mobile is uniquely positioned as the growth company in telecom and has already started laying the foundation for the future.

“Just five weeks ago, we merged with Sprint to create the New T-Mobile, and we’re more excited today than ever before about the massive value creation opportunity and synergy potential that lies ahead. We are off to the races laying the foundation for the future of the New T-Mobile as we work to execute on our business plan and harness the incredible opportunity ahead,” said Mike Sievert, President and CEO of T-Mobile. “In the face of a challenging climate for Q1, T-Mobile once again led the industry in postpaid phone net customer additions and set even more financial records, including record service revenues, record Q1 Net income and record Adjusted EBITDA. Additionally, I'm so proud of our teams for their creative and passionate work in the face of the COVID-19 health crisis as we continue to provide crucial connectivity to our customers and impacted communities, while ensuring the safety of our employees.”

While the COVID-19 pandemic has adversely impacted, and will continue to adversely impact, T-Mobile’s business and operating results, the company continues to work to ensure the health and safety of its employees, the ongoing reliability of its network, which continues to perform strongly and function with minimal interruptions, and the ability to serve and connect our customers. These prioritizations have resulted in key operational changes, affecting T-Mobile’s service revenues, equipment revenues, customer additions, churn rate and SG&A expenses, including increased labor costs. Additionally, T-Mobile continues to actively monitor and assess the impacts of COVID-19 on all facets of its business and operations, and as a result - the company is not in position to issue full year guidance, which depends on future developments that remain highly uncertain and unpredictable at this time, including the severity of the COVID-19 pandemic and related mitigation and response efforts. We anticipate providing a refined outlook for full-year 2020 on our second quarter earnings results. More information can be found in our 10-Q and Investor Factbook.

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

 

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: the failure to realize the expected benefits and synergies of the merger (the "Merger") with Sprint Corporation ("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 timeframes, in part or at all; adverse economic, political or market conditions in the U.S. and international markets, including those caused by the coronavirus disease 2019 (“COVID-19”) pandemic, and the impact that any of the foregoing may have on us and our customers and other stakeholders; costs of or difficulties in integrating Sprint's network and operations into our network and operations, including intellectual property and communications systems, administrative and information technology infrastructure and accounting, financial reporting and internal control systems; changes in key customers, suppliers, employees or other business relationships as a result of the consummation of the Transactions; our business, investor confidence in our financial results and stock price may be adversely affected if our internal controls are not effective; the effects of the material weakness in Sprint's internal control over financial reporting or the identification of any additional material weaknesses as we complete our assessment of the Sprint control environment; the risk of future material weaknesses resulting from the differences between T-Mobile’s and Sprint’s internal controls environments as we work to integrate and align guidelines and practices; 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 including costs or difficulties related to the completion of the divestiture of Sprint’s prepaid wireless businesses to DISH Network Corporation and the satisfaction of any related government commitments to such divestiture and any other commitments or undertakings that we entered into; the assumption of significant liabilities, including the liabilities of Sprint in connection with, and significant costs, including financing costs, related to the Transactions; our ability 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 debt securities or adverse conditions in the credit markets; natural disasters, public health crises, including the COVID-19 pandemic, terrorist attacks or similar incidents; 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; breaches of our and/or our third-party vendors' networks, information technology and data security, resulting in unauthorized access to customer confidential information; the inability to implement and maintain effective cybersecurity measures over critical business systems; challenges in implementing our business strategies or funding our operations, including payment for additional spectrum or network upgrades; the impact on our networks and business from major system and network failures; 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 occurrence of high fraud rates related to device financing, customer credit cards, dealers, subscriptions or account take over fraud; our inability to retain and hire key personnel; 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; unfavorable outcomes of existing or future litigation or regulatory actions, including litigation or regulatory actions related to the Transactions; the possibility that we may be unable to adequately protect our intellectual property rights or be accused of infringing the intellectual property rights of others; changes in tax laws, regulations and existing standards and the resolution of disputes with any taxing jurisdictions; 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; any disruption or failure of our third parties' (including 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 (the "SEC"), may require, which could result in an impact on earnings; and interests of our significant stockholders that may differ from the interests of other stockholders. 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.

 

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