Un-carrier Delivers Highest Q3 Postpaid
Phone Net Customer Additions in a Decade, Lowest Q3 Postpaid Phone
Churn in Company History and Hits 6 Million Broadband Customer
Milestone
T-Mobile US, Inc. (NASDAQ: TMUS):
Industry-Leading Customer Growth Fueled
by Best Network and Best Value Combination(1)
- Postpaid net account additions of 315 thousand, best in
industry
- Postpaid net customer additions of 1.6 million, best in
industry
- Postpaid phone net customer additions of 865 thousand, best in
industry, highest Q3 in a decade
- Postpaid phone churn of 0.86%, record low for Q3
- High Speed Internet net customer additions of 415 thousand,
best in industry
Translating Industry-Leading Customer
Growth into Industry-Leading Financial Performance
- Service revenues of $16.7 billion grew 5% year-over-year, best
in industry growth
- Postpaid service revenues of $13.3 billion grew 8%
year-over-year, best in industry growth
- Net income of $3.1 billion grew 43% year-over-year, best in
industry growth
- Diluted earnings per share (“EPS”) of $2.61 grew 43%
year-over-year, best in industry growth
- Core Adjusted EBITDA(2) of $8.2 billion grew 9% year-over-year,
best in industry growth
- Net cash provided by operating activities of $6.1 billion,
record high and grew 16% year-over-year, best in industry
growth
- Adjusted Free Cash Flow(2) of $5.2 billion, record high and
grew 29% year-over-year, best in industry growth
- Returned $1.4 billion to stockholders in Q3 2024, including
repurchases of $644 million and a cash dividend of $758 million,
and returned an additional $891 million in repurchases in Q4
through October 18th
Extending Overall Network Lead with
Best Assets, Customer Centricity and Technology
Leadership
- For the fourth year in a row, T-Mobile won best 5G availability
in the world and was the only US operator to earn a 5G Global
Winner award for this category from Opensignal
- Largest Voice over New Radio (VoNR) coverage with more than 300
million Americans covered, further improving performance and
spectral efficiency
T-Mobile US, Inc. (NASDAQ: TMUS) reported third quarter 2024
results today, raising full-year guidance across the board while
delivering industry-leading customer growth, including its highest
Q3 postpaid phone net customer additions in a decade, lowest Q3
postpaid phone churn in company history, and hitting 6 million
broadband customers. The company translated best-in-class customer
growth into industry-leading growth in service revenues,
profitability and cash flows. T-Mobile shared plans to drive
long-term value creation well into the future at its recent Capital
Markets Day, with continued industry-leading growth in
profitability leading to cash flows supporting an approximately $80
billion capacity for investments and stockholder returns through
2027.
“Delivering another quarter of industry-leading results,
including our best Q3 postpaid phone net adds in a decade and
record low Q3 churn, translated into outsized financial results and
empowered us to raise our 2024 guidance yet again,” said Mike
Sievert, CEO of T-Mobile. “Results like these prove that our
powerful combination of best-in-class network, unmatched value and
innovative experiences for customers is a winning formula and will
enable us to keep pace with our ambitious multi-year plan for the
future. It's an exciting time at T-Mobile as we have so much runway
in front of us for profitable, industry-leading growth into the
next era of Un-carrier.”
____________________
(1)
AT&T Inc. 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.
Industry-Leading Customer Growth Fueled
by Best Network and Best Value Combination(1)
- Postpaid net account additions of 315 thousand decreased
71 thousand year-over-year.
- Postpaid net customer additions of 1.6 million increased
349 thousand year-over-year.
- Postpaid phone net customer additions of 865 thousand
increased 15 thousand year-over-year. Postpaid phone churn of 0.86%
improved 1 basis point year-over-year.
- Prepaid net customer additions of 24 thousand decreased
55 thousand year-over-year. Prepaid churn of 2.78% improved 3 basis
points year-over-year.
- High Speed Internet net customer additions of 415
thousand decreased 142 thousand year-over-year. T-Mobile ended the
quarter with 6.0 million High Speed Internet customers.
- Total net customer additions of 1.6 million increased
294 thousand year-over-year. Total customer connections increased
to a record high of 127.5 million.
Quarter
Nine Months Ended September
30,
(in thousands, except churn)
Q3 2024
Q2 2024
Q3 2023
2024
2023
Postpaid net account additions
315
301
386
834
972
Total net customer additions
1,599
1,517
1,305
4,288
4,309
Postpaid net customer additions
1,575
1,338
1,226
4,133
4,080
Postpaid phone net customer additions
865
777
850
2,174
2,148
Postpaid other net customer additions
(2)
710
561
376
1,959
1,932
Prepaid net customer additions (2)
24
179
79
155
229
Total customers, end of period (2) (3)
127,492
125,893
117,907
127,492
117,907
Postpaid phone churn
0.86
%
0.80
%
0.87
%
0.84
%
0.84
%
Prepaid churn
2.78
%
2.54
%
2.81
%
2.69
%
2.73
%
High Speed Internet net customer
additions
415
406
557
1,226
1,589
Total High Speed Internet customers, end
of period
6,002
5,587
4,235
6,002
4,235
(1)
AT&T Inc. 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)
In the second quarter of 2024, we
acquired 3,504,000 prepaid customers through our acquisition of
Ka’ena, which includes the impact of certain base adjustments to
align the policies of Ka’ena and T-Mobile.
Translating Industry-Leading Customer
Growth Into Industry-Leading Financial
Performance(1)
- Total service revenues of $16.7 billion increased 5%
year-over-year, and Postpaid service revenues of $13.3 billion
increased 8% year-over-year.
- Net income of $3.1 billion increased 43%
year-over-year.
- Diluted EPS of $2.61 per share increased 43%
year-over-year.
- Core Adjusted EBITDA of $8.2 billion increased 9%
year-over-year.
- Net cash provided by operating activities of $6.1
billion increased 16% year-over-year, which included cash payments
for Merger-related costs of $124 million.
- Cash purchases of property and equipment, including
capitalized interest, of $2.0 billion decreased 19%
year-over-year.
- Adjusted Free Cash Flow of $5.2 billion increased 29%
year-over-year, which included cash payments for Merger-related
costs of $124 million.
- Stockholder Returns included 3.2 million shares of
common stock repurchased for $644 million in Q3 2024, with 153.4
million cumulative shares repurchased for $22.7 billion as of
September 30, 2024.
- In Q4 through October 18, 2024, the company returned an
additional $891 million to stockholders.
- The remaining authorization for stock repurchases and quarterly
cash dividends as of October 18, 2024 is $6.4 billion through
December 31, 2024.
- The next dividend of $0.88 per share is payable on December 12,
2024.
Quarter
Nine Months Ended September
30,
Q3 2024 vs. Q2
2024
Q3 2024 vs. Q3
2023
YTD 2024 vs. YTD
2023
(in millions, except EPS)
Q3 2024
Q2 2024
Q3 2023
2024
2023
Total service revenues
$
16,725
$
16,429
$
15,914
$
49,250
$
47,198
1.8
%
5.1
%
4.3
%
Postpaid service revenues
13,308
12,899
12,288
38,838
36,220
3.2
%
8.3
%
7.2
%
Total revenues
20,162
19,772
19,252
59,528
58,080
2.0
%
4.7
%
2.5
%
Net income
3,059
2,925
2,142
8,358
6,303
4.6
%
42.8
%
32.6
%
Diluted EPS
2.61
2.49
1.82
7.10
5.26
4.8
%
43.4
%
35.0
%
Adjusted EBITDA
8,243
8,053
7,600
23,948
22,204
2.4
%
8.5
%
7.9
%
Core Adjusted EBITDA
8,222
8,027
7,547
23,866
21,935
2.4
%
8.9
%
8.8
%
Net cash provided by operating
activities
6,139
5,521
5,294
16,744
13,700
11.2
%
16.0
%
22.2
%
Cash purchases of property and equipment,
including capitalized interest
1,961
2,040
2,424
6,628
8,214
(3.9
)%
(19.1
)%
(19.3
)%
Adjusted Free Cash Flow
5,162
4,439
4,003
12,948
9,281
16.3
%
29.0
%
39.5
%
(1)
Industry-leading claims are based
on consensus expectations if results are not yet reported.
Extending Overall Network Lead with
Best Assets, Customer Centricity and Technology
Leadership
T-Mobile’s combination of best network assets, customer
centricity and technology leadership is expected to keep the
company’s network years ahead of the competition well into the
future. The company’s unique Customer-Driven-Coverage model employs
AI based assessment of customer experiences utilizing T-Mobile’s
network data in order to improve network performance, deliver
higher customer satisfaction, and prioritize network investments
where they matter most to customers. Additionally, T-Mobile
operates the only scaled nationwide 5G stand-alone core with VoNR
coverage now reaching more than 300 million people, further
improving call quality, reducing latency and improving customer
experiences. And as more new phones support advanced capabilities
like VoNR and four-carrier aggregation to further increase spectral
efficiency, the company will be able to further differentiate its
network performance.
T-Mobile is the overall network leader, with the company
continuing to earn third-party recognition for its overall network
performance:
- Opensignal: In its latest 5G Global Mobile Network
Experience report, for the fourth year in a row, T-Mobile was
crowned the global leader in 5G availability and was the only US
operator to win a 5G Global Winner award for any category.
Note: See 5G device, coverage, and access
details at T-Mobile.com. Ookla awards: Based on analysis by Ookla®
of Speedtest Intelligence® data for the U.S., 1H 2024. Ookla
trademarks used under license and reprinted with permission.
Opensignal Awards: USA: Mobile Network Experience Report July 2024,
based on independent analysis of mobile measurements recorded
during the period March 1 - May 29, 2024. 5G Global Mobile Network
Experience Awards, T-Mobile USA large land mass group &
T-Mobile Puerto Rico small land mass group, 2024, based on
independent analysis of mobile measurements recorded during the
period January 1–June 29, 2024 © 2024 Opensignal Limited.
Raising 2024 Guidance Across the
Board
- Postpaid net customer additions are expected to be between 5.6
million and 5.8 million, an increase from prior guidance of 5.4
million to 5.7 million.
- Core Adjusted EBITDA, which is Adjusted EBITDA less lease
revenues, is expected to be between $31.6 billion and $31.8
billion, an increase at the midpoint from prior guidance of $31.5
billion to $31.8 billion.
- Net cash provided by operating activities, including payments
for Merger-related costs, is expected to be between $22.0 billion
and $22.3 billion, an increase from prior guidance of $21.8 billion
to $22.2 billion.
- Cash purchases of property and equipment, including capitalized
interest, are expected to be between $8.8 billion and $9.0 billion,
versus prior guidance of $8.7 billion to $9.1 billion.
- Adjusted Free Cash Flow, including payments for Merger-related
costs, is expected to be between $16.7 billion and $17.0 billion,
an increase at the midpoint from prior guidance of $16.6 billion to
$17.0 billion. Adjusted Free Cash Flow guidance does not assume any
material net cash inflows from securitization.
(in millions, except Postpaid net
customer additions and Effective tax rate)
Previous
Current
Change (Mid-point)
Postpaid net customer additions
(thousands)
5,400
5,700
5,600
5,800
150
Net income (1)
N/A
N/A
N/A
N/A
N/A
Effective tax rate
24%
25%
~24%
(50) bps
Core Adjusted EBITDA (2)
$
31,500
$
31,800
$
31,600
$
31,800
$
50
Net cash provided by operating
activities
21,800
22,200
22,000
22,300
150
Capital expenditures (3)
8,700
9,100
8,800
9,000
—
Adjusted Free Cash Flow (4)
16,600
17,000
16,700
17,000
50
(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 $100 million for 2024.
(3)
Capital expenditures means cash
purchases of property and equipment, including capitalized
interest.
(4)
Adjusted Free Cash Flow guidance
does not assume any material net cash inflows from securitization
in 2024.
Financial Results
For more details on T-Mobile’s Q3 2024 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 23, 2024, at 4:30 p.m. (EDT)
Pre-registration link for dial-in access
Participants can pre-register for the conference call here in
order to receive dial-in information.
Access via Phone (audio only)
Please plan on accessing the call 10 minutes prior to the
scheduled start time.
- Toll Free: 1-866-777-2509
- International: 1-412-317-5413
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 X
Send a post to @TMobileIR or @MikeSievert using $TMUS
Contact Information
- Media Relations: mediarelations@t-mobile.com
- Investor Relations: investor.relations@t-mobile.com
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 X
account (https://x.com/TMobileIR), the @MikeSievert X account
(https://x.com/MikeSievert), which Mr. Sievert also uses as a means
for personal communications and observations, and the @TMobileCFO X
account (https://x.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, Metro by
T-Mobile and Mint 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 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 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.S. and international markets, including
changes resulting from increases in inflation or interest rates,
supply chain disruptions, and impacts of geopolitical instability,
such as the Ukraine-Russia war and Israel-Hamas war; sociopolitical
volatility and polarization; our inability to manage the ongoing
commercial services arrangements entered into in connection with
the Prepaid Transaction, and known or unknown liabilities arising
in connection therewith; the timing and effects of any future
acquisition, divestiture, investment, or merger involving us,
including our inability to obtain any required regulatory approval
necessary to consummate any such transactions; any disruption or
failure of our third parties (including key suppliers) to provide
products or services for the operation of our business; our
substantial level of indebtedness and our inability to service our
debt obligations in accordance with their terms; changes in the
credit market conditions, credit rating downgrades or an inability
to access debt markets; the risk of future material weaknesses we
may identify, or any other failure by us to maintain effective
internal controls, and the resulting significant costs and
reputational damage; any changes in regulations or in the
regulatory framework under which we operate; laws and regulations
relating to the handling of privacy and data protection;
unfavorable outcomes of and increased costs from existing or future
regulatory or legal proceedings; difficulties in protecting our
intellectual property rights or if we infringe on the intellectual
property rights of others; our offering of regulated financial
services products and exposure to a wide variety of state and
federal regulations; new or amended tax laws or regulations or
administrative interpretations and judicial decisions affecting the
scope or application of tax laws or regulations; our wireless
licenses, including those controlled through leasing agreements,
are subject to renewal and may be revoked; our exclusive forum
provision as provided in our Certificate of Incorporation;
interests of DT, our controlling stockholder, which may differ from
the interests of other stockholders; the dollar amount authorized
for our 2023-2024 Stockholder Return Program may not be fully
utilized, and our share repurchases and dividend payments pursuant
thereto may fail to have the desired impact on stockholder value;
future sales of our common stock by DT and SoftBank and our
inability to attract additional equity financing outside the United
States due to foreign ownership limitations by the FCC; and other
risks as disclosed in our most recent annual report on Form 10-K,
10-Q and other filings with the Securities and Exchange Commission.
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.
T-Mobile US, Inc. Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
This Press Release includes non-GAAP financial measures. The
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 the non-GAAP financial measures to
the most directly comparable GAAP financial measures are provided
below. 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. Adjusted EBITDA and Core Adjusted EBITDA
should not be used to predict Net income as the difference between
either of these measures and Net income is variable.
Adjusted EBITDA and Core Adjusted EBITDA are reconciled to Net
income as follows:
Quarter
Nine Months Ended September
30,
(in millions)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net income
$
1,940
$
2,221
$
2,142
$
2,014
$
2,374
$
2,925
$
3,059
$
6,303
$
8,358
Adjustments:
Interest expense, net
835
861
790
849
880
854
836
2,486
2,570
Other (income) expense, net
(9
)
(6
)
(41
)
(12
)
(20
)
8
(7
)
(56
)
(19
)
Income tax expense
631
717
705
629
764
843
908
2,053
2,515
Operating income
3,397
3,793
3,596
3,480
3,998
4,630
4,796
10,786
13,424
Depreciation and amortization
3,203
3,110
3,187
3,318
3,371
3,248
3,151
9,500
9,770
Stock-based compensation (1)
173
155
152
164
140
147
143
480
430
Merger-related costs (gain), net (2)
358
276
152
248
130
(9
)
—
786
121
Legal-related (recoveries) expenses, net
(3)
(43
)
—
—
1
—
15
1
(43
)
16
(Gain) loss on disposal group held for
sale
(42
)
17
—
—
—
—
—
(25
)
—
Other, net (4)
153
54
513
13
13
22
152
720
187
Adjusted EBITDA
7,199
7,405
7,600
7,224
7,652
8,053
8,243
22,204
23,948
Lease revenues
(147
)
(69
)
(53
)
(43
)
(35
)
(26
)
(21
)
(269
)
(82
)
Core Adjusted EBITDA
$
7,052
$
7,336
$
7,547
$
7,181
$
7,617
$
8,027
$
8,222
$
21,935
$
23,866
(1)
Stock-based compensation includes
payroll tax impacts and may not agree to stock-based compensation
expense in the Condensed Consolidated Financial Statements.
Additionally, certain stock-based compensation expenses associated
with the merger with Sprint Corporation (the “Merger”) have been
included in Merger-related costs (gain), net.
(2)
Merger-related costs (gain), net,
for the nine months ended September 30, 2024, includes the $100
million gain recognized for the extension fee previously paid by
DISH associated with the DISH License Purchase Agreement.
(3)
Legal-related (recoveries)
expenses, net consists of the settlement of certain litigation
associated with the August 2021 cyberattack, net of insurance
recoveries.
(4)
Other, net, primarily consists of
certain severance, restructuring and other expenses, gains and
losses, including severance and related costs associated with the
August 2023 workforce reduction, not directly attributable to the
Merger, which are not reflective of T-Mobile’s core business
activities and are, therefore, excluded from Adjusted EBITDA and
Core Adjusted EBITDA.
Adjusted EBITDA represents earnings before Interest expense, net
of Interest income, Income tax expense, Depreciation and
amortization, stock-based compensation and certain expenses, gains
and losses, which are not reflective of our ongoing operating
performance (“Special Items”). Special Items include Merger-related
costs (gain), net, (Gain) loss on disposal groups held for sale,
certain legal-related recoveries and expenses, restructuring costs
not directly attributable to the Merger (including severance), and
other non-core gains and losses. Core Adjusted EBITDA represents
Adjusted EBITDA less device lease revenues. Core Adjusted EBITDA
and Adjusted EBITDA are non-GAAP financial measures utilized by
T-Mobile’s management to monitor the financial performance of our
operations. T-Mobile uses Core Adjusted EBITDA and Adjusted EBITDA
as benchmarks to evaluate T-Mobile’s operating performance in
comparison to its competitors. T-Mobile also uses Core Adjusted
EBITDA internally as a measure to evaluate and compensate its
personnel and management for their performance. Management believes
analysts and investors use Core Adjusted EBITDA and Adjusted EBITDA
as supplemental measures to evaluate overall operating performance
and to facilitate comparisons with other wireless communications
services companies because they are indicative of T-Mobile’s
ongoing operating performance and trends by excluding the impact of
Interest expense from financing, non-cash depreciation and
amortization from capital investments, non-cash stock-based
compensation, and Special Items. Management believes analysts and
investors use Core Adjusted EBITDA because it normalizes for the
transition in the company’s device financing strategy, by excluding
the impact of device lease revenues from Adjusted EBITDA, to align
with the related depreciation expense on leased devices, which is
excluded from the definition of Adjusted EBITDA. Core Adjusted
EBITDA and Adjusted EBITDA have limitations as analytical tools and
should not be considered in isolation or as substitutes for Net
income or any other measure of financial performance reported in
accordance with U.S. Generally Accepted Accounting Principles
(“GAAP”).
T-Mobile US, Inc. Reconciliation of
Non-GAAP Financial Measures to GAAP Financial Measures
(continued) (Unaudited)
Adjusted Free Cash Flow is calculated as follows:
Quarter
Nine Months Ended September
30,
(in millions, except
percentages)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Net cash provided by operating
activities
$
4,051
$
4,355
$
5,294
$
4,859
$
5,084
$
5,521
$
6,139
$
13,700
$
16,744
Cash purchases of property and equipment,
including capitalized interest
(3,001
)
(2,789
)
(2,424
)
(1,587
)
(2,627
)
(2,040
)
(1,961
)
(8,214
)
(6,628
)
Proceeds from sales of tower sites
6
2
2
2
—
—
—
10
—
Proceeds related to beneficial interests
in securitization transactions
1,345
1,309
1,131
1,031
890
958
984
3,785
2,832
Adjusted Free Cash Flow
$
2,401
$
2,877
$
4,003
$
4,305
$
3,347
$
4,439
$
5,162
$
9,281
$
12,948
Net cash provided by operating activities
margin (Net cash provided by operating activities divided by
Service revenues)
26.1
%
27.7
%
33.3
%
30.3
%
31.6
%
33.6
%
36.7
%
29.0
%
34.0
%
Adjusted Free Cash Flow margin (Adjusted
Free Cash Flow divided by Service revenues)
15.4
%
18.3
%
25.2
%
26.8
%
20.8
%
27.0
%
30.9
%
19.7
%
26.3
%
Adjusted Free Cash Flow - Net cash provided by operating
activities less Cash purchases of property and equipment, plus
Proceeds from sales of tower sites and Proceeds related to
beneficial interests in securitization transactions. Adjusted Free
Cash Flow is utilized by T-Mobile’s management, investors and
analysts to evaluate cash available to pay debt, repurchase shares,
pay dividends and provide further investment in the business.
Adjusted Free Cash Flow margin - Adjusted Free Cash Flow divided
by Service revenues. Adjusted Free Cash Flow Margin is utilized by
T-Mobile’s management, investors, and analysts to evaluate the
company’s ability to convert service revenue efficiently into cash
available to pay debt, repurchase shares and provide further
investment in the business.
The current guidance range for Adjusted Free Cash Flow is
calculated as follows:
FY 2024
(in millions)
Guidance Range
Net cash provided by operating
activities
$
22,000
$
22,300
Cash purchases of property and equipment,
including capitalized interest
(8,800
)
(9,000
)
Proceeds related to beneficial interests
in securitization transactions (1)
3,500
3,700
Adjusted Free Cash Flow
$
16,700
$
17,000
(1)
Adjusted Free Cash Flow guidance
does not assume any material net cash inflows from securitization
in 2024.
The previous guidance range for Adjusted Free Cash Flow was
calculated as follows:
FY 2024
(in millions)
Guidance Range
Net cash provided by operating
activities
$
21,800
$
22,200
Cash purchases of property and equipment,
including capitalized interest
(8,700
)
(9,100
)
Proceeds related to beneficial interests
in securitization transactions (1)
3,500
3,900
Adjusted Free Cash Flow
$
16,600
$
17,000
(1)
Adjusted Free Cash Flow guidance
does not assume any material net cash inflows from securitization
in 2024.
T-Mobile US, Inc. Operating
Measures (Unaudited)
The following table sets forth company operating measures ARPA
and ARPU:
Quarter
Nine Months Ended September
30,
(in dollars)
Q1 2023
Q2 2023
Q3 2023
Q4 2023
Q1 2024
Q2 2024
Q3 2024
2023
2024
Postpaid ARPA
$
138.04
$
138.94
$
139.83
$
140.23
$
140.88
$
142.54
$
145.60
$
138.94
$
143.02
Postpaid phone ARPU
48.63
48.84
48.93
48.91
48.79
49.07
49.79
48.80
49.22
Prepaid ARPU
37.98
37.98
38.18
37.55
37.18
35.94
35.81
38.05
36.27
Postpaid Average Revenue Per Account (Postpaid ARPA) - Average
monthly postpaid service revenue earned per account. Postpaid
service revenues for the specified period divided by the average
number of postpaid accounts during the period, further divided by
the number of months in the period.
Average Revenue Per User (ARPU) - Average monthly service
revenue earned per customer. Service revenues for the specified
period divided by the average number of customers during the
period, further divided by the number of months in the period.
Postpaid phone ARPU excludes postpaid other customers and
related revenues.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241022177290/en/
Media Relations: mediarelations@t-mobile.com Investor Relations:
investor.relations@t-mobile.com
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