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Jun 30, 2023
T-Mobile Q2 2023 Earnings Report
T-Mobile delivered industry-leading growth in customers and profitability, raised 2023 guidance again, and achieved the lowest postpaid phone churn in the industry for the first time, while delivering the highest Q2 postpaid phone net adds in eight years.
Key Takeaways
T-Mobile reported industry-best growth in postpaid customers, driven by growth in postpaid phone gross additions coupled with the lowest postpaid phone churn in the industry. The company translated customer growth into best-in-class growth in Service revenues, Net income, and Core Adjusted EBITDA, while raising full-year 2023 guidance. T-Mobile repurchased $3.5 billion of common stock throughout the quarter.
Postpaid net account additions of 299 thousand, best in industry
Postpaid net customer additions of 1.6 million, best in industry and raising guidance
Postpaid phone net customer additions of 760 thousand, best in industry and best Q2 in eight years
Postpaid phone churn of 0.77%, best in industry for the first time ever and a record low
T-Mobile
T-Mobile
T-Mobile Revenue by Segment
Revenue by Segment
Postpaid Service Revenues Revenue
CapyFin.com Forward Guidance
T-Mobile raised its 2023 guidance for postpaid net customer additions, Core Adjusted EBITDA, and Net cash provided by operating activities.
Positive Outlook
- Postpaid net customer additions are expected to be between 5.6 million and 5.9 million, an increase from prior guidance of 5.3 million to 5.7 million.
- Core Adjusted EBITDA is expected to be between $28.9 billion and $29.2 billion, an increase from prior guidance of $28.8 billion to $29.2 billion.
- Merger synergies are expected to be approximately $7.5 billion, an increase from prior guidance of $7.3 billion to $7.5 billion.
- Net cash provided by operating activities is expected to be between $18.0 billion and $18.3 billion, an increase from prior guidance of $17.9 billion to $18.3 billion.
- Adjusted Free Cash Flow, including payments for Merger-related costs, is expected to be between $13.2 billion and $13.6 billion.
Challenges Ahead
- Merger-related costs are expected to be approximately $1.0 billion before taxes.
- Cash purchases of property and equipment, including capitalized interest, are expected to be between $9.5 billion and $9.7 billion an increase from the prior guidance of $9.4 billion to $9.7 billion.
- Adjusted Free Cash Flow guidance does not assume any material net cash inflows from securitization.
- T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income, including, but not limited to, Income tax expense and Interest expense.
- Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable.