Shares of T-Mobile (TMUS) gained in after-hours trading after the telecommunications company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $2.84, which beat analysts’ consensus estimate of $2.68 per share. At the same time, sales increased by 6.9% year-over-year, with revenue hitting $21.13 billion. This beat analysts’ expectations of $21.04 billion.
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Interestingly, the company saw its best-ever Q2 gains in total postpaid and postpaid phone net and gross customer additions. It also led the industry in postpaid net account additions and 5G broadband customer growth. This surge in subscribers led to service revenue growing by more than double that of its closest competitors, along with its highest-ever net income for a second quarter.
CEO Mike Sievert credited these results to the strength of T-Mobile’s network and the value it provides, noting that customers are switching at record rates. Indeed, postpaid net customer additions reached 1.7 million, including 830,000 postpaid phone additions, while 5G broadband net additions came in at 454,000. Therefore, T-Mobile ended the quarter with 7.3 million 5G broadband customers and 132.8 million total customer connections. This continues the firm’s steady long-term growth rate in customer numbers, as illustrated below.
2025 Outlook
Looking ahead, T-Mobile has updated its 2025 financial outlook to include its soon-to-close acquisition of Metronet, which is expected to close on July 24. However, the outlook does not include the pending purchase of UScellular (USM).
As a result, the company now expects to add between 6.1 million and 6.4 million postpaid customers this year, higher than its previous forecast of 5.5 million to 6 million. This includes 2.95 million to 3.1 million postpaid phone customers and about 100,000 fiber customers. In addition, Core Adjusted EBITDA, which removes lease revenues, is projected to be between $33.3 billion and $33.7 billion, slightly above the midpoint of earlier guidance.
T-Mobile also expects operating cash flow to reach $27.1 billion to $27.5 billion, up from the midpoint of its previous outlook. Moreover, capital spending is expected to remain at approximately $9.5 billion, while adjusted free cash flow is projected to be between $17.6 billion and $18 billion.
Is TMUS Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on TMUS stock based on eight Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average TMUS price target of $261.03 per share implies 11.6% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
