T-Mobile (TMUS) Q3 2026 Earnings Call Transcript

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DATE

Wed, Oct. 28, 2026

CALL PARTICIPANTS

• Senior Vice President of Investor Relations – Cathy Yao
• Chief Executive Officer – Srinivasan Gopalan
• Executive Vice President and Chief Financial Officer – Peter Osvaldik
• CFO-designate – Jessica Uhl
• Chief Enterprise Officer – Chris Sambar
• President of Technology – John Saw
• President of Consumer Group – Jon Freier
• EVP and Chief Strategy and Corporate Development Officer – André Almeida

TAKEAWAYS

• Postpaid Net Account Additions — 274,000, bringing total postpaid accounts to 35.0 million, a 3% increase compared to the prior year.
• Postpaid ARPA — $155.73, representing 4% growth year over year driven by customer adoption of premium rate plans.
• Total Service Revenue — $19.4 billion, reflecting 6.2% growth driven by the postpaid business.
• Postpaid Service Revenue — $16.3 billion, growing 9.3% year over year.
• Net Income — $3.5 billion, representing 27.3% growth compared to the prior year.
• Diluted EPS — $3.22, increasing 33.6% year over year.
• Core Adjusted EBITDA — $9.6 billion, representing 10.8% growth driven by postpaid outperformance.
• Adjusted Free Cash Flow — $5.1 billion, representing 5.3% growth and a 26.2% margin.
• Stockholder Returns — $3.5 billion in the third quarter, consisting of $2.4 billion in common stock repurchases and $1.1 billion in cash dividends.
• Postpaid Net Account Additions Guidance — Approximately 1.0 million for the full year, a projection management stated far exceeds the industry.
• Service Revenue Guidance — Approximately $76.8 billion for the full year, representing 8% growth.
• Postpaid ARPA Growth Guidance — Approximately 3.5% for the full year, raised from a previous range of 2.5% to 3%.
• Core Adjusted EBITDA Guidance — $37.35 billion to $37.45 billion for the full year, a $100 million increase at the midpoint.
• Adjusted Free Cash Flow Guidance — $18.7 billion to $18.8 billion for the full year, a $150 million increase at the midpoint of previous guidance.
• Cash Capital Expenditures Guidance — Approximately $10.0 billion for the full year, consistent with previous expectations.
• Effective Tax Rate Guidance — 24% to 25%, decreased from the prior guidance of 25% to 26%.
• T-Life Monthly Active Users — 32 million, reflecting continued customer momentum within the digital app ecosystem.
• Digital Transaction Rate — Over 80% for upgrades and approximately 50% for phone line activations, driven by direct app engagement and associate-guided digital tools.
• Year-to-Date Share Repurchases — $10.3 billion through Oct. 23, 2026, compared to $9.9 billion in the full year of 2025.
• Department of Justice Contract — Management reported winning the top spot in the DOJ wireless purchasing contract after extensive network testing and evaluation.
• Small Markets and Rural Area Share — 24%, an increase from 13% since the decision to lead in 5G network coverage and performance.
• Acquired Postpaid Accounts — 1,448,000 accounts added through the U.S. Cellular transaction, alongside 633,000 accounts from other acquisitions.

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RISKS

• Peter Osvaldik stated, “seasonally for everybody, Q4 tends to be a higher churn quarter than Q3 because of the holiday season,” noting that account churn is expected to increase as a result.
• Peter Osvaldik warned that “Q3 inventory constraints as well that have shifted some things from Q3 into Q4” would affect the timing of EBITDA recognition due to shipping and fulfillment requirements.

SUMMARY

T-Mobile US, Inc. (TMUS +0.85%) reported third-quarter results reflecting growth in the postpaid and broadband segments alongside the expansion of its digital ecosystem. Management raised full-year guidance for service revenue, profitability, and cash flow based on the performance of its core wireless business and deepening customer relationships. The company is advancing its technology infrastructure through the development of Kinetic Edge for physical AI and the implementation of AI-driven network optimization tools. Strategic focus remains on maintaining a pricing advantage while increasing average revenue per account through the adoption of premium rate plans and flexible plan structures.

• John Saw stated, “2030 will also see 6G networks being built and T-Mobile will be the first with 6G in this country,” as part of the company’s long-term network planning.
• Management reported that 60% of new accounts are choosing premium rate plans, supporting the upward revision of the annual postpaid ARPA growth forecast.
• Srinivasan Gopalan stated, “84% of surveyed customers want more control of how their wireless plans are structured,” regarding the launch of the T-Mix portfolio which allows users to select and change specific benefits.
• The company reported that AI-driven spectral efficiency gains from radio resource planning exceeded internal expectations during real-world testing in New York.
• Gopalan noted that the enterprise business achieved its 17th consecutive quarter of positive ports, driven by network capabilities and customer satisfaction awards.
• Management reported that 5G broadband customers maintain the highest Net Promoter Score in the broadband category, including fiber providers.

INDUSTRY GLOSSARY

• AI-RAN: An AI-driven Radio Access Network that uses artificial intelligence to optimize network performance and spectral efficiency.
• ARPA: Average Revenue Per Account, a metric measuring the monthly service revenue generated per customer account.
• FWA: Fixed Wireless Access, a technology providing broadband internet through cellular networks rather than physical cables.
• Kinetic Edge: A distributed intelligence infrastructure developed with Amazon Web Services to support physical AI applications.
• NPS: Net Promoter Score, a metric used to measure customer loyalty and satisfaction.
• SA (Standalone): A 5G network architecture that functions independently of existing 4G infrastructure.
• T-Life: The company’s primary digital application for customer management, rewards, and transactions.
• T-Mix: A wireless plan portfolio designed to allow customers to customize their specific plan benefits.

Full Conference Call Transcript

Operator: Good afternoon. [Operator Instructions] I would now like to turn the conference over to Cathy Yao, Senior Vice President of Investor Relations for T-Mobile US. Please go ahead.

Quan Yao: Good afternoon. Welcome to T-Mobile’s Third Quarter 2026 Earnings Call. Joining me on our call today are Srini Gopalan, Peter Osvaldik, Jessica Uhl, as well as other members of the leadership team. During this call, we will make forward-looking statements, which involve risks and uncertainties that may cause actual results

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