T-Mobile US, Inc. Q1 FY2025 earnings call

Management Statement and Operational Highlights

• Welcome and Introductions: Welcomed Srini Gopalan as new COO.
• Results and Execution: Strong Q1 results driven by relentless execution, innovation, and durable advantages (best network, value, and team).
• Network Innovations: 5G advanced rollout, record speeds, improved slicing for business and government. T Satellite with $10/month pricing, commercial service in July.
• Customer Experience: TLIFE digital platform growth, AI-driven customer care improvements.
• Fiber and Broadband: T Fiber to launch post-Lumos transaction, 5G broadband growth and success.

Segment Performance

• Wireless: T-Mobile US had strong Q1 2025 results with postpaid net additions setting a new record, postpaid gross additions also a Q1 record. T-Mobile US for Business led in total postpaid and postpaid phone net additions. Postpaid ARPA grew nearly 4%, highest Q1 in eight years.
• Broadband: 5G broadband had 424,000 net additions for the thirteenth consecutive quarter, lowest churn ever, and highest Q1 ARPU growth. T Fiber to launch later this quarter after completing the Lumos transaction.
• Network and Innovation: First carrier to roll out 5G advanced nationwide, achieved record download speeds. T Satellite has final launch pricing at $10 a month, commercial service starts in July.
• Digital and AI: TLIFE digital platform resonating with customers, nearly doubling digital postpaid phone upgrades. Intense CX AI features reducing customer care needs.

Guidance

• Customers: Expect total postpaid net additions 5.5-6 million, half being postpaid phone net additions. Postpaid ARPA growth at least 3.5%, postpaid phone ARPU growth 1.5%.
• Financials: Core adjusted EBITDA $33.2-$33.7 billion, cash CapEx ~$9.5 billion, adjusted free cash flow $17.5-$18 billion. Lumos acquisition slightly accretive to service revenues, neutral to EBITDA this year.

Risks

• Macro Environment: Uncertainty in economy may lead to pull-forward of upgrades and switching.
• Tariffs: Potential tariffs on handsets could affect upgrade rates and pricing.
• Competitive Dynamics: Changing competition and promotional intensity may impact results.

Question and Answer

• **Q: Biggest opportunity ahead for T-Mobile US?

A: Srini Gopalan mentioned leveraging culture, best network, and digital capabilities to solve customer problems.

• **Q: T Fiber go-to-market?

A: Mike Katz discussed leveraging brand, advertising, distribution, and existing customer base for T Fiber launch.

• **Q: Price ups and churn?

A: Mike Sievert said churn artifacts from price ups are temporary, competition dynamic with promotional intensity on devices.

• **Q: Lumos and Metronet impact?

A: Peter Osvaldik said updates on MetroNet and US Cellular upon closing, Lumos slightly accretive to service revenues.

• **Q: Churn and macro pressure?

A: Jon Freier said prepaid business stable, Peter Osvaldik said underlying wholesale growth excluding Dish and TracFone.

• **Q: Broadband and fiber adds?

A: Mike Katz said 5G broadband growth strong, T Fiber launch expected, no specific guidance on fiber adds yet.

• **Q: Tariffs on handsets?

A: Mike Sievert said hard to predict, customer likely bears cost, may slow upgrade rates.

• **Q: Cable M&A and fiber?

A: Mike Sievert said interested in pure play fiber, looking for right M&A opportunities.

• **Q: Fiber business impact on P&L?

A: Peter Osvaldik said fiber businesses funding customer acquisition, initially may not be drag, long-term accretive.

• **Q: Fiber market structure?

A: Mike Sievert said geography not primary input, open-minded on market structure, intention to be first to fiber.