[TMUS] T-Mobile: Q3 2026 Earnings Preview on Churn, ARPA and Cash Flow

T-Mobile (TMUS), the second-largest US wireless carrier by total postpaid and prepaid customers[1], will hold its earnings call on 2026-10-28 to report results for the third quarter of 2026, ending September 30, 2026[2]. Heading into T-Mobile's Q3 2026 earnings, the latest disclosed quarter is the second quarter of 2026, when total revenues were $22.79 billion, up 7.9% year over year, service revenues were $18.98 billion, up 8.9%, Core Adjusted EBITDA was $9.54 billion, up 11.7%, diluted EPS was $2.99 and Adjusted Free Cash Flow was $4.80 billion[3]. In the same quarter the company added 277,000 net postpaid accounts, postpaid account churn was 0.99% and postpaid average revenue per account (ARPA) was $152.91, up 2%[4]. On its July 23 call, management guided the third quarter to roughly 250,000 net postpaid account additions, service revenues of about $19.3 billion (up about 6%) and Core Adjusted EBITDA of about $9.4 billion (up about 8%)[5], and on September 3, while announcing a CFO transition, it reaffirmed its full-year 2026 guidance[6]. Sell-side estimates compiled by Drillr as of September 28, 2026 put third-quarter total revenue consensus at $23.15 billion across 13 analysts and EPS consensus at $2.89 across 12 analysts[7]; that revenue figure includes equipment sales and cannot be compared directly with the company's service revenue guidance.

The coming report tests three things. First, the legacy rate-plan migration is concentrated in the third quarter, and the company has already cut its account-addition guide to about 250,000, well below the 396,000 added in the third quarter of 2025[8]; whether account churn stays near its earlier 1.04% high and ARPA keeps growing will show whether the price increase merely shed low-line accounts or cost T-Mobile core customers to competitors. Second, the UScellular and other acquisitions largely lap in the third quarter, so service revenue growth is set to slow from 8.9% in the second quarter to about 6%, yet the company still guides Core Adjusted EBITDA up about 8%; that gap can only come from cost synergies, measured against third-quarter 2025 Core Adjusted EBITDA of $8.68 billion and a 47.6% margin[9]. Third, the third quarter is the iPhone upgrade season: Adjusted Free Cash Flow was $4.82 billion in the same quarter of 2025[10], while the company returned almost all of its first-half free cash flow to shareholders and ended June with net debt at 2.3 times trailing twelve-month Core Adjusted EBITDA[11]; whether device subsidies and integration payments squeeze cash decides whether buybacks and leverage can both hold.

Company Background and Business Structure

T-Mobile is a national carrier built on wireless service that is now expanding into fixed broadband. It operates the T-Mobile, Metro by T-Mobile and Mint Mobile brands and served 142.4 million postpaid and prepaid customers with wireless and broadband service at the end of 2025[12]. Deutsche Telekom is the controlling shareholder: as of February 6, 2026 it held, directly or indirectly, about 52.8% of the common stock and, through its agreement with SoftBank, controlled about 56.9% of the vote[13]. Management is in transition, and on September 3, 2026 the company named Jessica Uhl CFO Designate to succeed Peter Osvaldik in February 2027[6].

Acquisitions since 2025 have pushed the company into smaller cities, rural markets and fiber broadband. T-Mobile closed its purchase of the UScellular wireless business on August 1, 2025 for $2.8 billion in cash; in July of that year its joint venture with KKR closed the acquisition of fiber company Metronet, with T-Mobile investing $4.6 billion for a 50% equity interest and 713,000 residential fiber customers, after which Metronet became a wholesale network provider, its retail customers moved to T-Mobile, and both the Lumos and Metronet joint ventures are accounted for under the equity method[14]. According to company disclosures, the UScellular deal added 1,448,000 postpaid accounts in the third quarter of 2025, and Metronet and other acquisitions added 633,000[8]. In April 2026 the company signed two more fiber joint ventures: i3 Broadband, expected to close in the second half of 2026 with an investment of about $700 million, and GoNetspeed with Greenlight Networks, expected to close in the first half of 2027 with an investment of about $2.0 billion[15]. T-Mobile recognizes the postpaid revenue from fiber customers, while the wholesale network access fees it pays Metronet and Lumos are booked in cost of services[16].

The company reports a single wireless operating segment and breaks revenue out by customer type, with postpaid the dominant piece. Total revenues were $88.31 billion in 2025, including service revenues of $71.31 billion, made up of postpaid revenues of $57.93 billion (up 11%), prepaid revenues of $10.50 billion (up 1%) and wholesale and other service revenues of $2.88 billion (down 16%), plus equipment revenues of $15.97 billion and other revenues of $1.03 billion[17]; by share of service revenues, the three lines were 81%, 15% and 4%[12]. At the end of 2025 the company had 85.59 million postpaid phone customers, 30.85 million postpaid other customers (including 7.60 million 5G broadband and 997,000 fiber customers) and 25.94 million prepaid customers (including 848,000 5G broadband customers)[18]. Starting in 2026, the company's quarterly materials center on postpaid accounts, disclosing account totals, net account additions, account churn and ARPA[4].

The company sells monthly wireless plans and broadband service, plus handsets sold close to cost. Postpaid customers are household and business accounts that can carry several phones, 5G fixed wireless gateways, tablets and wearables; the company leads with premium Experience plans that bundle streaming and in-flight Wi-Fi, and also offers a lower-priced Essentials plan and dedicated plans for military members, first responders and customers aged 55 and over, and buyers can usually finance a phone over 24 months[19]. The network rests on an average of 394 MHz of low- and mid-band spectrum nationwide, including an average of 185 MHz in the 2.5 GHz band[20], and 5G fixed wireless broadband is sold on the network's excess capacity[19]. Of the $18.98 billion in second-quarter 2026 service revenues, postpaid contributed $15.85 billion, prepaid $2.47 billion and wholesale and other $0.66 billion[21]; postpaid rose 13%, prepaid fell 6%, and wholesale and other fell 8% on lower DISH and TracFone MVNO revenues[22].

Financial History and Current Position

The annual record shows revenue growth accelerating with acquisitions in 2025 while operating income barely grew. Total revenues were $78.56 billion in 2023, $81.40 billion in 2024 and $88.31 billion in 2025, up 8%; 2025 operating income was $18.28 billion, up only 1%, after a $278 million impairment, Core Adjusted EBITDA was $33.92 billion (up 7%) and Adjusted Free Cash Flow was $18.00 billion (up 6%)[17]. Net cash provided by operating activities was $27.95 billion in 2025[10]. On operating measures, the company added 1.18 million net postpaid accounts in 2025, full-year ARPA was $148.97, up 4%[23], and postpaid phone churn rose from 0.86% in 2024 to 0.93%[18].

Interim figures for the second quarter of 2026, ended June 30, show revenue and EBITDA still growing quickly while net income was flat. Total revenues were $22.79 billion (up 7.9%), service revenues $18.98 billion (up 8.9%) and postpaid revenues $15.85 billion (up 12.6%); net income was $3.24 billion (up 0.5%) and diluted EPS $2.99 (up 5.3%); Core Adjusted EBITDA was $9.54 billion (up 11.7%); operating cash flow was $7.50 billion, cash capital expenditures were $2.70 billion (up 12.8%) and Adjusted Free Cash Flow was $4.80 billion (up 4.4%)[3]. Core Adjusted EBITDA equaled 50.2% of service revenues, compared with 49.0% a year earlier[9]. The company added 494,000 net postpaid accounts in the first half, and second-quarter account churn was 0.99%, up from 0.92% a year earlier[4].

Balance-sheet leverage is falling, but nearly all free cash flow goes to shareholder returns. At the end of June 2026, total debt excluding tower obligations was $86.92 billion, cash was $2.83 billion and net debt was $84.10 billion, or 2.3 times trailing twelve-month Core Adjusted EBITDA, down from 2.5 times at the end of September 2025[11]. In the first half of 2026 the company returned $9.28 billion to shareholders, $7.06 billion through buybacks and $2.22 billion through dividends[24], under a 2026 stockholder return authorization of up to $18.2 billion[25].

Operating Model

Service revenue has three parts, postpaid, prepaid and wholesale, and postpaid revenue, roughly average postpaid accounts times ARPA times months, is the growth engine. Account growth comes from winning network-focused customers from AT&T and Verizon, expansion in smaller cities and rural areas, business customers and acquisitions, and second-quarter postpaid revenue rose 13% mainly on more average accounts from acquisitions and higher ARPA[22]. ARPA is lifted by fee revenue from tax-and-fee-exclusive plans and by extra 5G broadband and business lines per account, and held back by bundled promotions and by fiber and UScellular accounts with fewer lines[26]; by management's measure, second-quarter ARPA excluding acquisitions grew 3.7%[27]. Prepaid revenue is falling on promotional dilution and wholesale on the DISH and TracFone roll-off, and management now sees full-year wholesale and other revenue roughly flat[28]. Net account additions first change the average account base and then feed postpaid revenue in the same and later quarters; a price increase lifts ARPA in the quarter of migration, while the accounts it drives away keep weighing on the average base afterward.

Core Adjusted EBITDA equals service revenues, equipment sales and other revenues, less cost of services, cost of equipment and SG&A, each excluding special items. In the second quarter of 2026, cost of services excluding special items was $2.87 billion, SG&A excluding special items was $5.57 billion, and bad debt and losses from sales of receivables equaled 1.8% of total revenues[9]. Because network costs are largely fixed, most of each extra dollar of service revenue drops through to EBITDA; the offsets are mainly wholesale access fees paid to the fiber joint ventures and costs brought in with UScellular[16]. The company expects UScellular integration to deliver $1.2 billion of annual run-rate cost synergies, $950 million in operating expenses and $250 million in capital expenditures, at a total cost to achieve of about $2.6 billion, substantially all incurred by the end of 2027[29]; the $588 million of UScellular merger-related costs in the first half of 2026 sit in special items[30], so they do not affect Core Adjusted EBITDA but do reduce net income and cash flow. Moving from EBITDA to net income also requires deducting depreciation and amortization ($3.43 billion in the second quarter), interest ($1.06 billion) and income tax[21].

Adjusted Free Cash Flow equals operating cash flow minus cash capital expenditures, and it funds buybacks and dividends. In 2025 operating cash flow was $27.95 billion and Adjusted Free Cash Flow $18.00 billion; in the first half of 2026 they were $14.72 billion and $9.40 billion[10]. Full-year guidance calls for operating cash flow of $28.4 billion to $28.8 billion, Adjusted Free Cash Flow of $18.4 billion to $18.8 billion and cash capital expenditures of about $10.0 billion[31], and first-half capital spending was $5.33 billion[3]. Operating cash flow swings mainly with working capital tied up in handset installment plans and device inventory, integration cash payments ($181 million in the second quarter)[9], cash taxes and interest. Large uses beyond free cash flow include the 2027 C-band and 2028 2.7 GHz spectrum auctions, which management says will partly offset near-term buybacks[32], and the capital contributions to the i3 Broadband and GoNetspeed/Greenlight fiber joint ventures[15].

Industry and Competitive Position

Three national network operators dominate US wireless, while cable companies and satellite broadband press on both phones and home internet. T-Mobile's main rivals are AT&T and Verizon; Charter, Comcast and EchoStar also sell no-contract postpaid and prepaid plans; and on the broadband side its 5G fixed wireless and fiber compete with cable, DSL and fiber providers, AT&T and Verizon's fixed wireless products and satellite internet[1].

T-Mobile's evidenced advantages lie in its network, customer quality and still-underpenetrated smaller markets. Management said second-quarter ARPU on port-ins exceeded ARPU on port-outs by about 20%, and more than 60% of new accounts chose premium plans[33]. The company says smaller cities and rural areas hold about 40% of the US population while its household share there is only 24%, and the UScellular acquisition has accelerated its expansion in those markets[34]. Its average of 394 MHz of low- and mid-band spectrum is what allows 5G broadband to run on excess network capacity[20].

Competitive pressure is also visible, and churn and the non-postpaid businesses are the two weak spots. Second-quarter account churn rose 7 basis points year over year, which the company attributed to more broadband-only accounts with higher churn, including fiber accounts from Metronet[26]; investment firm W. H. Reaves, by contrast, argues that new Verizon and AT&T pricing has narrowed the retail price gap with T-Mobile[35]. Prepaid revenue fell 6% year over year, and wholesale revenue declined as DISH and TracFone traffic rolled off[22]. Because the three carriers define accounts and ARPA differently, the real effect of a narrower price gap on T-Mobile can only be read from its own churn and ARPA.

Core Debates

With its legacy rate-plan migration concentrated in the third quarter, can T-Mobile's higher revenue per account outweigh the accounts it loses?

This debate matters because postpaid accounts generate more than 80% of service revenue, so accounts times ARPA nearly sets the revenue growth rate. The company has already cut its third-quarter guide to about 250,000 net account additions and acknowledged that the legacy plan migration will temporarily raise account churn, while noting that the effect is concentrated in accounts with fewer lines and that phone churn is less affected[5]. On the supportive side, second-quarter net account additions were 277,000 and ARPA rose 2.0%[4], or 3.7% excluding acquisitions[27], postpaid phone churn was 0.85%[36], and more than 60% of new accounts chose premium plans[33].

The worrying side is also backed by data, and it supports a competing explanation. Account churn has risen from 0.92% a year earlier to 0.99%, and net account additions fell 13% year over year[4]; prepaid revenue fell 6% and wholesale revenue 8%[22], and service revenue growth is set to slow from about 9% to about 6% once acquisitions lap[5]. The competing explanation is that ARPA growth comes mainly from fee revenue on tax-and-fee-exclusive plans and automatic migration[26] rather than from customers choosing to upgrade; if competitors narrow the price gap, churn could spread from low-line accounts to core phone accounts.

The third-quarter baselines come from the same quarter of 2025, and the transmission runs straight from the migration to service revenue. In the third quarter of 2025, total service revenues were $18.24 billion[9], net postpaid account additions were 396,000, account churn was 0.97% and ARPA was $149.44[8]. Automatically migrating legacy plans to current and tax-and-fee-exclusive plans raises ARPA while pushing some low-line accounts out; together those forces set net additions and the average account base, which set postpaid revenue, and adding the prepaid and wholesale declines gives total service revenues.

The debate is unresolved, and the third-quarter report needs to be read as a combination of churn and ARPA. Readers can watch whether service revenues reach about $19.3 billion, how net additions compare with roughly 250,000, and whether the full-year guide of 950,000 to 1.05 million net account additions holds[31]; whether account churn exceeds the earlier 1.04% high and whether management keeps disclosing phone churn; reported and acquisition-adjusted ARPA growth; and whether prepaid and wholesale declines widen. If account churn reaches 1.10% or more and management extends the explanation to competition, or ARPA growth falls below 2%, the view that the price increase only sheds low-value accounts would be falsified.

With acquisitions lapping and service revenue growth slowing to about 6%, can the UScellular integration keep T-Mobile's core adjusted EBITDA growing around 8%?

This debate decides whether EBITDA growth can keep outrunning revenue growth. Core Adjusted EBITDA rose 11.8% in the first half of 2026[3], partly on scale from acquisitions; from the third quarter that acquisition boost fades quickly, yet the company still guides Core Adjusted EBITDA up about 8%, ahead of service revenue growth of about 6%[5]. That gap of about 2 percentage points can only come from costs, mainly the combination of UScellular's network, stores and back office, for which the company targets $1.2 billion of annual run-rate synergies[29], and it also decides whether full-year Core Adjusted EBITDA guidance of $37.1 billion to $37.5 billion is met[31].

The evidence cuts both ways, and the source of the margin gain is not yet clear. On the favorable side, second-quarter SG&A excluding special items was $5.57 billion, down from $5.71 billion in the first quarter, and Core Adjusted EBITDA equaled 50.2% of service revenues, versus 49.0% a year earlier[9]. On the unfavorable side, cost of services rose 10%, driven mainly by wholesale access fees paid to Metronet and Lumos and by UScellular costs[16]; bad debt rose to 1.8% of revenues from 1.3% a year earlier[9]; and $588 million of integration costs were still incurred in the first half[30]. The competing explanation is that first-half margin gains came mainly from acquisition scale and seasonally low upgrade costs (a 2.6% upgrade rate in the second quarter)[8] rather than synergies, so the improvement would narrow sharply once the upgrade season arrives in the third quarter.

The third-quarter baselines all come from the same quarter of 2025, and the transmission is the gap between cost growth and revenue growth. In the third quarter of 2025, Core Adjusted EBITDA was $8.68 billion, or 47.6% of service revenues, SG&A excluding special items was $5.83 billion, and bad debt and losses from sales of receivables equaled 1.6% of total revenues[9]. Integrating UScellular's network, stores and back office should keep cost of services and SG&A, excluding special items, growing more slowly than service revenues, lifting Core Adjusted EBITDA and its margin; fiber wholesale access fees, bad debt and promotions push the other way.

This debate has to be judged year over year, not sequentially. In the third-quarter report, watch whether Core Adjusted EBITDA reaches about $9.4 billion, how its share of service revenues compares with 47.6% a year earlier, the year-over-year change in SG&A and cost of services excluding special items, whether the bad-debt ratio falls back below 1.8%, and whether integration costs or the synergy timetable change. If Core Adjusted EBITDA comes in below $9.3 billion, or the bad-debt ratio reaches 2.0%, the view that synergies can offset the fading acquisition boost would be weakened.

Through the iPhone upgrade season, can T-Mobile generate the roughly $9 billion of second-half free cash flow needed to fund buybacks without raising leverage?

This debate bears on whether EPS can keep growing faster than net income. T-Mobile returns almost all of its free cash flow to shareholders: first-half 2026 Adjusted Free Cash Flow was $9.40 billion[10], shareholder returns were $9.28 billion[24], and the full-year authorization is up to $18.2 billion[25]. In the second half the company must also invest about $700 million in the i3 Broadband fiber joint venture[15], and spectrum auctions follow in 2027 and 2028[32]. Buybacks have been why EPS outgrows net income, with second-quarter net income up only 0.5% and diluted EPS up 5.3%[3]; if free cash flow falls clearly below last year's level during the upgrade season, either the buyback pace or leverage has to give.

The evidence shows cash flow improving, but the quality of that improvement is in question. On the favorable side, second-quarter Adjusted Free Cash Flow rose 4.4%, and in July the company raised full-year guidance to $18.4 billion to $18.8 billion, from $18.1 billion to $18.7 billion[31], with management attributing the increase to lower-than-expected cash taxes[5]; on September 3 it reaffirmed full-year guidance and its capital return framework[6], and net debt to trailing Core Adjusted EBITDA fell from 2.5 times at the end of September 2025 to 2.3 times[11]. On the unfavorable side, second-quarter capital spending rose 12.8%[3], net payments for merger-related costs were $181 million, up from $92 million a year earlier[9], and when the upgrade rate reached 3.8% in the fourth quarter of 2025[8], Adjusted Free Cash Flow for that quarter was only $4.19 billion[10]. The competing explanation is that the guidance raise rests on one-off cash tax savings and that underlying cash conversion has not improved.

The third-quarter baselines again come from the same quarter of 2025, and the transmission runs from handset volume all the way to leverage. In the third quarter of 2025, Adjusted Free Cash Flow was $4.82 billion and cash capital expenditures were $2.64 billion[10], the postpaid device upgrade rate was 2.7%[8], and shareholder returns were $3.46 billion[24]; leverage stood at 2.3 times at the end of June 2026[11]. The upgrade rate, device subsidies and installment receivables change the working capital inside operating cash flow, integration payments and cash taxes also flow through operating cash flow, and subtracting capital spending gives Adjusted Free Cash Flow, which funds buybacks and dividends and finally shows up in net debt to EBITDA.

This debate turns on cash conversion during the upgrade season rather than on the full-year guide itself. In the third-quarter report, watch Adjusted Free Cash Flow against roughly $4.8 billion, whether capital spending stays on pace for about $10.0 billion for the year, the upgrade rate and new installment financing, net debt to trailing Core Adjusted EBITDA and third-quarter buybacks, and whether management links spectrum auctions or fiber contributions to the buyback. If third-quarter Adjusted Free Cash Flow falls below $4.4 billion, or leverage rises to 2.5 times, the view that free cash flow can fund buybacks while holding leverage would be weakened.

Risks and Falsifiers

Spectrum auctions and satellite broadband pose risks to both capital allocation and broadband growth. Management said the 2027 C-band auction and the 2028 2.7 GHz auction will require capital that partly offsets near-term buybacks, and that low-earth-orbit satellite broadband could compete with 5G fixed wireless in rural markets[32]. Spectrum purchases are excluded from Adjusted Free Cash Flow but directly compete with buybacks for cash and push up net debt, which was $84.10 billion at the end of June[11]; 5G broadband is a key source of account additions and lines per account, so pressure on rural share would hit both accounts and ARPA. If the company keeps buying back stock and holds leverage at 2.3 to 2.4 times before the auctions, third-quarter account additions and ARPA meet guidance, and management keeps its 2030 target of 15 million 5G broadband customers, this concern would ease.

The controlling shareholder and the management transition could change capital return policy. Deutsche Telekom holds about 52.8% of the common stock[13], and an outside investor has cited market rumors that it is considering consolidating the minority shareholders[35]; the CFO changes in February 2027[6], and guidance and the capital allocation framework could be adjusted during the handover. The company reaffirmed its 2026 guidance and capital return framework on September 3, and if the third-quarter report also leaves the long-term financial framework unchanged before the new CFO takes over, this risk has not materialized.

Price-driven migration combined with competitors narrowing the price gap could spread churn from low-line accounts to core phone accounts. On a base of about 34.7 million accounts, each 0.05-percentage-point rise in account churn means roughly 50,000 more lost accounts a quarter, which at second-quarter ARPA of $152.91 costs about $100 million of postpaid revenue a year[4] and requires more promotion to win back. If third-quarter account churn is no higher than 1.05% and net account additions are at least about 250,000[5], this risk has not taken hold.

UScellular synergies could be absorbed by fiber access fees, bad debt and upgrade promotions, pulling EBITDA growth back toward revenue growth once acquisitions lap. On roughly $19.3 billion of third-quarter service revenues, each 0.5-percentage-point decline in the Core Adjusted EBITDA share of service revenues removes about $100 million of EBITDA, the equivalent of cutting the third-quarter guide from $9.4 billion to $9.3 billion[5]. If that ratio is at least 48.7% in the third quarter and SG&A excluding special items does not rise year over year from $5.83 billion in the third quarter of 2025[9], this risk is falsified.

Upgrade subsidies, installment financing, integration payments and spectrum auctions could together leave free cash flow short of the current buyback pace. The gap between the $18.4 billion low end of full-year Adjusted Free Cash Flow guidance[31] and the first-half $9.40 billion[10] is $9.00 billion, so every $400 million shortfall in the third quarter must be made up in the fourth, or buybacks fall or net debt rises. If third-quarter Adjusted Free Cash Flow is at least $4.8 billion, shareholder returns are at least $3.5 billion and leverage is no higher than 2.4 times[11], this risk has not materialized.

What to Watch Next

• Rate-plan migration and ARPA, net account additions: the baseline is 396,000 in the third quarter of 2025 against guidance of about 250,000; watch the deviation from guidance and whether the 950,000 to 1.05 million full-year guide holds. At least about 250,000 supports the current view.
• Rate-plan migration and ARPA, churn and ARPA: the baselines are 0.97% and $149.44 in the third quarter of 2025, and 0.99% and $152.91 in the second quarter of 2026; watch whether churn passes 1.04% and how reported and acquisition-adjusted ARPA grow. Churn at 1.10% or more attributed to competition, or ARPA growth below 2%, falsifies the view.
• Rate-plan migration and ARPA, service revenues: the baseline is $18.24 billion in the third quarter of 2025 against guidance of about $19.3 billion; watch whether guidance is met and whether prepaid and wholesale declines widen. Reaching about $19.3 billion supports the current view.
• UScellular synergies and EBITDA, Core Adjusted EBITDA and margin: the baselines are $8.68 billion and 47.6% in the third quarter of 2025 against guidance of about $9.4 billion; watch year-over-year costs excluding special items and the bad-debt ratio. Below $9.3 billion, or bad debt at 2.0%, weakens the view.
• Upgrade-season cash and buybacks, Adjusted Free Cash Flow: the baseline is $4.82 billion in the third quarter of 2025; watch capital spending pace, the upgrade rate and installment financing. Below $4.4 billion weakens the view, and at least $4.8 billion supports it.
• Upgrade-season cash and buybacks, leverage and shareholder returns: the baselines are 2.3 times at the end of June and $3.46 billion of returns in the third quarter of 2025; watch third-quarter buybacks and the impact of spectrum auctions and fiber contributions. Leverage rising to 2.5 times weakens the view.

Conclusion

T-Mobile's business runs on postpaid accounts and ARPA, its profits come from largely fixed network costs amplifying revenue gains, and nearly all of its cash flow goes to buybacks and dividends. In the second quarter, service revenues rose 8.9%, Core Adjusted EBITDA rose 11.7% and Adjusted Free Cash Flow was $4.80 billion[3], and leverage fell to 2.3 times[11], leaving the company in solid financial shape. What remains unresolved are three relationships: whether ARPA from the legacy plan migration outweighs the temporarily higher churn, whether cost synergies can sustain about 8% EBITDA growth after the acquisition boost fades, and whether upgrade-season free cash flow can support both buybacks and leverage.

Only one independent outside assessment with a concrete stance appeared after the second-quarter results, so it is one outside interpretation rather than a market consensus. According to a September 17, 2026 report by SUN MEDIA, W. H. Reaves & Co. named T-Mobile a main detractor in its second-quarter investor letter, arguing that new Verizon and AT&T pricing narrowed the retail price gap, that a possible SpaceX IPO adds satellite-network headline uncertainty and that rumors of Deutsche Telekom consolidating minority holders weighed on the stock; the firm still sees investment potential in T-Mobile but sees more upside in some AI-related stocks, and T-Mobile shares were down 27.84% for the year as of September 16[35]. This view conflicts with the company's own explanation: T-Mobile attributes rising churn to more broadband-only accounts and a planned plan migration, while W. H. Reaves points to competitive pricing, which is exactly the competing explanation in the first core debate; its concerns about satellite broadband and the controlling shareholder map to the spectrum-and-satellite and controlling-shareholder risks.

The combination that would clearly strengthen the current view is third-quarter account churn no higher than 1.05%, net account additions of at least about 250,000 and ARPA growth near 3%, together with Core Adjusted EBITDA of about $9.4 billion at no less than 48.7% of service revenues, and Adjusted Free Cash Flow of at least $4.8 billion with leverage no higher than 2.4 times. Conversely, if churn exceeds 1.10% and management extends the explanation to competition, ARPA growth falls below 2%, or Core Adjusted EBITDA comes in below $9.3 billion and free cash flow below $4.4 billion, then the price-increase, synergy and buyback cases would all need to be re-examined.

Sources

[1] TMUS 10-K filed 2026-02-11 · competition · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[2] Drillr earnings calendar (updated 2026-09-28) · TMUS 2026-10-28 call · 2026-09-28 · Drillr earnings calendar · https://gateway.drillr.ai/mcp/private

[3] TMUS 8-K filed 2026-07-23 · Q2 2026 financial summary · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[4] TMUS 8-K filed 2026-07-23 · Q2 2026 account metrics · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[5] TMUS Q2 2026 earnings call 2026-07-23 · Q3 2026 guidance · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[6] TMUS 8-K filed 2026-09-03 · CFO transition and guidance reaffirmed · 2026-09-03 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000119312526381901/d155079dex991.htm

[7] Drillr analyst_financial_estimates (updated 2026-09-28) · TMUS quarter ending 2026-09-30 · 2026-09-28 · Drillr analyst_financial_estimates · https://gateway.drillr.ai/mcp/private

[8] TMUS 8-K filed 2026-07-23 · quarterly operating data 2025-2026 · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[9] TMUS 8-K filed 2026-07-23 · quarterly financial measures 2025-2026 · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[10] TMUS 8-K filed 2026-07-23 · quarterly Adjusted Free Cash Flow · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[11] TMUS 8-K filed 2026-07-23 · net debt and leverage June 30 2026 · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[12] TMUS 10-K filed 2026-02-11 · operations, brands and service revenue mix · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[13] TMUS 10-K filed 2026-02-11 · Deutsche Telekom ownership · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[14] TMUS 10-K filed 2026-02-11 · UScellular and Metronet acquisitions · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[15] TMUS 10-Q filed 2026-07-23 · fiber joint ventures · 2026-07-23 · 10-Q · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000101/tmus-20260630.htm

[16] TMUS 8-K filed 2026-07-23 · Q2 2026 factbook revenue and cost drivers · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[17] TMUS 10-K filed 2026-02-11 · FY2025 results of operations · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[18] TMUS 10-K filed 2026-02-11 · customers, broadband and churn FY2025 · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[19] TMUS 10-K filed 2026-02-11 · plans, device financing and broadband products · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[20] TMUS 10-K filed 2026-02-11 · spectrum position · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[21] TMUS 8-K filed 2026-07-23 · Q2 2026 revenue lines · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[22] TMUS 10-Q filed 2026-07-23 · Q2 2026 revenue and SG&A drivers · 2026-07-23 · 10-Q · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000101/tmus-20260630.htm

[23] TMUS 10-K filed 2026-02-11 · postpaid accounts and ARPA FY2025 · 2026-02-11 · 10-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000010/tmus-20251231.htm

[24] TMUS 8-K filed 2026-07-23 · quarterly stockholder returns 2025-2026 · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[25] TMUS 8-K filed 2026-07-23 · Q2 2026 stockholder returns · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[26] TMUS 8-K filed 2026-07-23 · Q2 2026 factbook account, ARPA and churn drivers · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex992.htm

[27] TMUS Q2 2026 earnings call 2026-07-23 · ARPA excluding M&A · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[28] TMUS Q2 2026 earnings call 2026-07-23 · wholesale roll-off · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[29] TMUS 10-Q filed 2026-07-23 · UScellular synergies and costs to achieve · 2026-07-23 · 10-Q · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000101/tmus-20260630.htm

[30] TMUS 8-K filed 2026-07-23 · quarterly EBITDA reconciliation and special items · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[31] TMUS 8-K filed 2026-07-23 · 2026 guidance update · 2026-07-23 · 8-K · https://www.sec.gov/Archives/edgar/data/1283699/000128369926000100/tmus06302026ex991.htm

[32] TMUS Q2 2026 earnings call 2026-07-23 · stated risks · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[33] TMUS Q2 2026 earnings call 2026-07-23 · customer value and port-in ARPU · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[34] TMUS Q2 2026 earnings call 2026-07-23 · rural share and UScellular integration · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private

[35] 商传媒 SUN MEDIA(Yahoo 奇摩股市)2026-09-17 · 美國電信市場競爭加劇 T-Mobile 美國股價承壓 · 2026-09-17 · W. H. Reaves & Co. · https://tw.stock.yahoo.com/news/%E7%BE%8E%E5%9C%8B%E9%9B%BB%E4%BF%A1%E5%B8%82%E5%A0%B4%E7%AB%B6%E7%88%AD%E5%8A%A0%E5%8A%87-t-mobile-%E7%BE%8E%E5%9C%8B%E8%82%A1%E5%83%B9%E6%89%BF%E5%A3%93-014356770.html

[36] TMUS Q2 2026 earnings call 2026-07-23 · prepaid migration and phone churn · 2026-07-23 · earnings-call · https://gateway.drillr.ai/mcp/private