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Mar 31, 2020
T-Mobile Q1 2020 Earnings Report
T-Mobile reported industry-leading customer growth and record financial performance.
Key Takeaways
T-Mobile reported a record-setting first quarter in 2020, delivering industry-leading customer growth and record financials. The company completed its merger with Sprint on April 1, 2020.
Branded postpaid net additions were 777,000, the best in the industry.
Branded postpaid phone net additions reached 452,000, leading the industry.
Total branded net additions totaled 649,000, the highest in the industry.
Record service revenues of $8.7 billion, up 5% year-over-year.
Revenue by Segment
Forward Guidance
Due to uncertainty around the ongoing impact of COVID-19, purchase price accounting and accounting policy alignment work and conforming legacy Sprint key performance indicators to T-Mobile policies, the guidance for the New T-Mobile is for Q2 2020 only.
Positive Outlook
- Expect postpaid net customer additions between 0 and 150,000 in Q2 2020.
- Adjusted EBITDA is expected to be in the range of $6.2 to $6.5 billion in Q2 2020.
- Adjusted EBITDA target includes leasing revenues of $1.3 billion to $1.4 billion.
- Free Cash Flow, including payments for merger-related costs and COVID-19-related costs, but excluding $2.3 billion in gross payments for the settlement of interest rate swaps, is expected to be in the range of $1.3 to $1.5 billion.
Challenges Ahead
- The business, liquidity, financial condition, and operating results are expected to continue to be adversely impacted by the COVID-19 pandemic for the remainder of 2020 and potentially thereafter.
- Lower net customer additions, equipment revenues and cost of equipment sales, and higher bad debt expense.
- Continued costs to protect and support employees and customers, which will increase from the costs incurred during the first quarter of 2020.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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