Key Highlights
- Shares of T-Mobile declined 4.2% in premarket hours to $183 following Q2 results that missed revenue projections
- Quarterly revenue reached $22.8 billion, marking a 7.9% year-over-year increase but falling short of the $22.9 billion Wall Street forecast
- Earnings per share (adjusted) of $2.99 significantly exceeded the analyst consensus of $2.54
- Postpaid net customer additions totaled 277,000, marginally surpassing the Street’s expectation of 268,300
- The wireless carrier increased its adjusted free cash flow outlook for the full year to $18.4–$18.8 billion from the previous $18.1–$18.7 billion range
Shares of T-Mobile experienced a sharp decline of approximately 4.2% during premarket trading on Thursday, falling to $183, as the telecommunications giant delivered second-quarter revenue figures that disappointed Wall Street analysts despite a strong earnings performance.
The company reported quarterly revenue of $22.8 billion, representing a healthy 7.9% increase from the same period last year, yet missing the analyst consensus estimate of $22.9 billion. On the earnings front, adjusted EPS of $2.99 substantially beat expectations of $2.54.
Despite the impressive bottom-line performance, investors focused on the top-line shortfall, pushing shares lower in early trading.
The company’s service revenues climbed 9% from the prior-year quarter to reach $19.0 billion. Within that segment, postpaid service revenues demonstrated robust growth of 13%, rising to $15.9 billion.
Core adjusted EBITDA expanded 12% year-over-year to $9.5 billion, while adjusted free cash flow increased 4% to reach $4.8 billion for the quarter.
The carrier brought in 277,000 postpaid net account additions during the three-month period. This represented a 13% decline compared to last year’s figures, though it managed to slightly exceed Wall Street’s projection of 268,300 additions.
Postpaid average revenue per account increased 2% year-over-year to $152.91, reflecting gradual but consistent improvement in customer value extraction.
Raised Outlook Provides Silver Lining
T-Mobile enhanced its full-year adjusted free cash flow projection to a range of $18.4–$18.8 billion, representing an increase from the previously stated $18.1–$18.7 billion guidance.
The company also elevated its net cash from operating activities forecast to $28.4–$28.8 billion, compared to the earlier range of $28.1–$28.7 billion.
Management clarified that the revised projections do not incorporate any significant net cash inflows from securitization activities.
The telecommunications provider maintained its full-year expectations for postpaid net account additions between 950,000 and 1.05 million, alongside core adjusted EBITDA guidance of $37.1–$37.5 billion.
Capital expenditure plans remain unchanged at approximately $10 billion for 2025.
T-Mobile’s Position Among Major Carriers
T-Mobile represents the second of the three dominant U.S. wireless providers to announce quarterly results this earnings season. AT&T similarly exceeded earnings projections while falling short on revenue.
Verizon is scheduled to release its quarterly results before the opening bell on Friday.
T-Mobile confirmed its annual postpaid account addition target remains at 950,000 to 1.05 million, signaling confidence in its subscriber growth trajectory for the remainder of the year.
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