T Mobile US ((TMUS)) has held its Q1 earnings call. Read on for the main highlights of the call.
T-Mobile US’s recent earnings call painted a positive picture of the company’s performance, marked by significant achievements and strategic advancements. The sentiment throughout the call was optimistic, highlighting record-breaking postpaid additions, impressive 5G broadband growth, and financial results that surpassed industry standards. Despite minor challenges related to churn and wholesale revenue, T-Mobile US raised its guidance, showcasing its leadership in innovation with 5G advancements and digital transformation initiatives.
Record Q1 Postpaid Net Additions
T-Mobile US celebrated its best-ever first quarter for total postpaid net additions, setting a new benchmark with 495,000 postpaid phone additions. This milestone was accompanied by an industry-leading growth in postpaid ARPA, which increased by nearly 4%, marking the highest first-quarter growth in eight years.
Strong 5G Broadband Growth
For the thirteenth consecutive quarter, T-Mobile US led the broadband industry with 424,000 net additions in 5G broadband. The company achieved the lowest churn ever and recorded the highest first-quarter ARPU growth in broadband, reinforcing its position as a leader in the sector.
Financial Performance and Guidance Upgrade
The company reported an 8% year-over-year growth in postpaid service revenues, with overall service revenues up by 5%. Core adjusted EBITDA rose by 8%, and adjusted free cash flow reached a first-quarter record of $4.4 billion. T-Mobile US also increased its guidance for full-year postpaid ARPA growth to at least 3.5%.
Launch of T Fiber and 5G Advanced
T-Mobile US completed the acquisition of Lumos and is preparing to launch T Fiber, with plans for further expansion through the Metronet transaction. The company became the first carrier to roll out 5G advanced nationwide, highlighting its commitment to innovation and network expansion.
AI and Digital Transformation
The TLIFE digital platform experienced a significant increase in digital postpaid phone upgrades, and new AI features have successfully reduced customer care needs. These advancements indicate substantial progress toward T-Mobile US’s long-term digital goals.
Churn Concerns
While industry-wide churn was slightly elevated due to macroeconomic factors and increased device focus, T-Mobile US effectively managed these dynamics. The company experienced temporary churn artifacts from legacy plan price increases but maintained overall stability.
Wholesale Revenue Decline
Wholesale and other service revenues faced declines due to expected reductions from Dish and TracFone. However, T-Mobile US anticipates underlying growth to improve throughout the year, mitigating the impact of these declines.
Forward-Looking Guidance
Looking ahead, T-Mobile US provided robust guidance for the full year, reflecting confidence in its strategic initiatives. The company expects total postpaid net customer additions between 5.5 to 6 million, with half being postpaid phone net additions. Postpaid ARPA growth expectations have been raised to at least 3.5%, and postpaid phone ARPU is projected to grow by 1.5% this year. T-Mobile US forecasts core adjusted EBITDA between $33.2 billion and $33.7 billion, alongside cash CapEx of approximately $9.5 billion. Adjusted free cash flow is expected to range from $17.5 billion to $18 billion, supported by margin expansion and capital efficiency.
In conclusion, T-Mobile US’s earnings call highlighted a strong quarter with record achievements and strategic advancements. The company demonstrated leadership in 5G and digital transformation while effectively managing challenges related to churn and wholesale revenue. With an optimistic outlook and raised guidance, T-Mobile US is well-positioned for continued growth and success in the coming year.