T-Mobile US, Inc. Q4 FY2024 earnings call

• Network performance during California wildfires: Network held up well, restored to 99% within days, and activated T-Mobile Starlink satellite to cellular capabilities for emergency use.
• Growth in 2024: Highest-ever postpaid phone gross additions, best-ever postpaid phone churn, third straight year of over 3 million postpaid phone net additions. Q4 led industry in postpaid phone net additions, over 60% of new customers selecting premium plans, postpaid ARPA growth highest in over 7 years. T Life app had over 50 million downloads. Business segment had best-ever quarter in phone net additions and lowest ever total postpaid churn. City of New York awarded contract for Public Safety network. Opensignal and Ookla affirmed network leadership. 5G broadband had highest-ever share of industry nets, updated pricing construct.
• Financial growth: Postpaid service revenue grew over 8%, core adjusted EBITDA grew 10% Q4 and 9% full year, highest-ever diluted EPS and free cash flow of $17 billion.
• 2025 outlook: Highest-ever beginning of the year guide for expected postpaid net additions, increasing service revenue growth expectation. Srini Gopalan to join as COO in March.

In 2024, T-Mobile achieved several significant segment performances. Postpaid phone saw the highest-ever postpaid phone gross additions, best-ever postpaid phone churn, and third straight year of over 3 million postpaid phone net additions. Q4 led the industry in postpaid phone net additions with 903,000. 5G broadband captured the highest-ever share of industry nets, had 12th consecutive quarter leading industry broadband growth with 428,000 net additions, and saw highest year-over-year broadband ARPU growth. Service revenue in Q4 grew over 8%, core adjusted EBITDA grew 10% in Q4 and 9% for the full year. Full year delivered highest-ever diluted earnings per share and free cash flow of $17 billion.

• Total postpaid customer net additions expected between 5.5 million and 6 million.
• Service revenue growth expected to be approximately 5%, up from prior guidance.
• Core adjusted EBITDA expected between $33.1 billion and $33.6 billion, up 5% at midpoint.
• Cash CapEx expected to be approximately $9.5 billion.
• Adjusted free cash flow expected in range of $17.3 billion to $18 billion.
• 2025 beginning of the year guide for postpaid net additions is highest ever.

• Impact of announced and pending M&A not contemplated in guidance.
• Uncertainties related to immigration affecting prepaid business (but insulated due to portfolio of brands).
• Potential headwinds from storms, ACP program, etc., though managed through execution.

Q: On guidance, 5% service revenue growth and postpaid Sub guide.

A: Peter Osvaldik talked about wholesale tapering, ARPA growth from deepening customer relationships, and confidence in postpaid subscribers due to market share gains.

Q: On ARPA growth, fixed wireless, and Vistar acquisition.

A: Peter Osvaldik discussed ARPA growth from account and rate plan changes, Vistar acquisition for transforming out-of-home advertising.

Q: On broadband environment, capital allocation, and prepaid exposure to immigration.

A: G. Sievert and Peter Osvaldik talked about broadband growth from share taking, capital allocation pacing, and prepaid business insulated from immigration