T-Mobile US, Inc. Q4 FY2025 earnings call

Network Performance - Best Network: T-Mobile has constructed the best network with superior spectrum, a denser grid, and a 5G stand - alone core. It utilizes AI and customer data for targeted network deployment, achieving median download speeds twice that of competitors. It aims to lead in 6G innovation. - Best Value: Offers the best value to both new and existing customers. Existing customers save 12 - 15% less than AT&T and Verizon, and new customers enjoy substantial daily value savings. - Best Experience: Focuses on culture and employees. There is a 50% reduction in calls through empowering frontline staff. TLife has over 100 million downloads and 24 million monthly active users, and AI initiatives such as Intense CX are used to personalize the experience. Operational highlights include 73% of upgrades being done on TLife, and plans for further AI and digital initiatives to enhance efficiency and satisfaction.

In Q4 2025, T-Mobile US, Inc. demonstrated robust financial performance. Service revenue saw a year-over-year reported growth of 10% and organic growth of 5%. Postpaid net account additions were 261,000, which was ten times that of the next competitor. Postpaid ARPA grew by 2.7% year over year, with organic growth at 3.6%. Adjusted EBITDA increased 7% year over year or 4% organically. Free cash flow conversion in Q4 was 22%, and for the year, it was 25%. Regarding product segments, core consumer wireless has growth opportunities with network seekers. The broadband business is projected to reach 15 million customers by 2030, and new growth areas like advertising, financial services, and physical/edge AI are emerging but not significantly factored into current guidance.

2026: - Service revenue is expected to be approximately $77 billion, with an 8% top - line growth, including around $3.6 billion from M&A, and 6% organic growth. - Adjusted EBITDA is anticipated to be between $37 - $37.5 billion, with a 10% reported growth and 7% organic growth. - Free cash flow is expected to be between $18 - $18.7 billion. ### 2027: - Service revenue is projected to be between $80.5 - $81.5 billion, with a 5% top - line growth, including around $4 billion from M&A, and 5% organic growth. - Adjusted EBITDA is expected to be between $39 - $40 billion, with a 9% reported growth and 8% organic growth. - Free cash flow is expected to be between $19.5 - $20.5 billion. Additionally, T-Mobile is accelerating Q1 share buybacks to $5 billion, and Deutsche Telekom is not planning to sell T-Mobile US, Inc. shares in 2026 and is exploring strategic alternatives to deepen investment.

No specific risks are explicitly detailed in the transcript, but general industry risks like competition, macroeconomic factors, and challenges in integrating new businesses and technologies could affect performance.

Q: How do your expectations of business or enterprise growth factor into your guidance?

A: There is a huge opportunity in business with double - digit revenue growth expected for years, driven by network differentiation such as key priority and large - scale testing wins.

Q: Could you elaborate on your understanding with DT regarding share buybacks?

A: Deutsche Telekom's intention is driven by the growth vision. It is not planning to sell shares in 2026 and is exploring strategic alternatives, which aligns with T-Mobile's confidence in the business and the acceleration of Q1 share buybacks.

Q: How have the drivers of switching activity changed with the K - shape economy?

A: Network quality and value remain major drivers. T-Mobile is zealously guarding its value position in a way that resonates with customers.

Q: How are you thinking about AI RAN and T Satellite?

A: AI RAN has the potential to transform networks for 6G, with field trials expected in 2026. T Satellite is a complementary service for uncovered areas, successful but complementary to the main network.

Q: How do you see churn and rate increases in the future?

A: Account churn is the key to look at. In 2025, there was normalization. Rate increases are a combination of front - book/back - book dynamics, relationship expansion, and rate plan optimizations, with included services and differentiation in premium plans driving ARPA