T Mobile US : Q2 2026 Transcript

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EDITED TRANSCRIPT

TMUS.OQ - Q2 2026 T-Mobile US Inc Earnings Call

EVENT DATE/TIME: JULY 23, 2026 / 11:30AM GMT

OVERVIEW:

Company Summary

CORPORATE PARTICIPANTS Cathy Yao T-Mobile US Inc - Senior Vice President, Investor Relations Srini Gopalan T-Mobile US Inc - President, Chief Executive Officer, Director Peter Osvaldik T-Mobile US Inc - Chief Financial Officer John Saw T-Mobile US Inc - Chief Technology Officer Andre Almeida T-Mobile US Inc - Chief Broadband, Enterprise & Emerging Business Officer Jon Freier T-Mobile US Inc - Chief Operating Officer CONFERENCE CALL PARTICIPANTS Sean Diffley Morgan Stanley - Analyst Michael Funk Bofa Merrill Lynch Asset Holdings Inc - Analyst Craig Moffett Moffettnathanson LLC - Analyst John Hodulik UBS AG - Analyst Peter Supino Wolfe Research LLC - Equity Analyst Kannan Venkateshwar Barclays Services Corp - Equity Analyst Kutgun Maral Evercore Inc - Equity Analyst Michael Ng Goldman Sachs Group Inc - Analyst Sebastiano Petti JPMorgan Chase & Co - Analyst Bryan Kraft Deutsche Bank AG - Analyst Samuel McHugh Exane Bnp Paribas - Analyst PRESENTATION Operator

‌Good morning. (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.

Cathy Yao - T-Mobile US Inc - Senior Vice President, Investor Relations

Good morning. Welcome to T-Mobile's second-quarter 2026 earnings call. Joining me on our call today are Srini Gopalan, our President and CEO; Peter Osvaldik, our CFO, 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 to differ materially. We encourage you to review the risk factors set forth in our SEC filings. Our earnings release, investors' factbook and other documents related to our results, as well as reconciliations between GAAP and non-GAAP results discussed on this call can be found on our Investor Relations website.

With that, let me now turn it over to Srini.

‌Srini Gopalan - T-Mobile US Inc - President, Chief Executive Officer, Director

Thanks, Cathy, and good morning, everyone. We're here in New York City today, excited to discuss our results. Q2 was another extraordinary quarter of executing on our strategy and delivering against the ambitious goals we set out at our February Capital Markets Day update.

Our strategy is simple, but truly powerful: give customers the best network, the best value, and the best experience, all in one place. That's how we eliminate trade-offs for our customers, and that's what truly sets us apart. Nothing demonstrates this better than our NPS, a record high 46 this quarter.

Let me pause on that for a second, because that 46 represents the highest NPS in wireless ever across the big three carriers. And it is, of course, well ahead of the competition. This differentiation is why we outgrow the industry time and time again, and we did it again in Q2.

In the wireless space, we continue to see a substantial opportunity. Of more than 20 million families and businesses who are network seekers and not yet with T-Mobile. With the best network in America, we have an unparalleled right to win with these customers.

This quarter, the highest percentage ever of network seeking prospects ranked T-Mobile number one on having an extremely reliable network and as a completely trusted brand. This is why we grew our postpaid share of households yet again across every single cohort within the top 100 markets and also in smaller markets and rural areas.

Let me double-click on smaller markets and rural areas. These markets represent 40% approximately of the population, and we have lots of room to run at this opportunity with just 24% total share of households. This opportunity is supercharged by our acquisition of UScellular last year, and the integration is going great.

Our share in T-Mobile for Business gives us that same kind of runway. This quarter, we continue to take share with a network superiority-led value proposition. Our nationwide 5G advanced network continue to drive new TAM creation through advanced network solutions, subsequently leading to traditional voice and broadband sales.

And I'm also really excited to welcome Chris Sambar to T-Mobile as our Chief Enterprise Officer, who will help further supercharge growth here. Chris will be joining us in August.

Turning now to broadband. It wasn't that long ago some competitors were calling 5G broadband cellphone internet. Today, it's the most exciting evolution in broadband technology in a long, long time. It has consistently produced industry-leading growth, and we have so much more runway left here.

5G broadband has rapidly become a premium broadband offering in the marketplace. In fact, with our latest generation router coupled with our network, we're delivering download speeds roughly equivalent to fiber to the home when both are used over Wi-Fi, which is how the vast majority of customers experience broadband. That is truly impressive.

And both the network and CPE technology continue to rapidly evolve. It's no wonder our 5G broadband offering leads the industry in customer experience, including winning J.D. Power's number one in Customer Satisfaction. That's also why we've consistently been the fastest-growing ISP in the country, including in Q2. And this industry-leading growth has come with very healthy ARPUs.

As we approach 2027 and '28, there will be even more spectrum availability, reflecting the stewardship of Chairman Carr and his commitment to American 6G leadership. This will unlock even greater capacity that will be deployed under our fallow capacity model.

Putting it all together, our unmatched value proposition drove post-paid net account additions of 277,000 in Q2, alongside 2% ARPA growth year-over-year, a really strong result. We continued to bring new families and businesses to T-Mobile in a durable and profitable way, with CLVs in Q2 up healthy double-digits over last year.

In addition, port and ARPAs continue to exceed port-out ARPAs by approximately 20%. This is another highlight of our unrivaled value proposition, with over 60% of customers on new accounts selecting our premium plans.

Our adjacencies, T-Ads and Financial Services, continue to add incremental growth, leveraging our brand and ecosystem. I'm really excited to share that our T-Mobile Visa credit card launch was one of the most successful co-branded launches for Capital One, and we're on track to rank amongst Capital One's leading co-brand programs in terms of new accounts.

Most importantly, we will not stop. We're not standing still. Our network keeps winning accolades from third-party providers even as we continue to invest in it. Let me double-click into both. For the third straight time, we won the Best Mobile Network by Ookla.

We also swept every single subcategory across Opensignal's Quality of Experience and Network Performance awards, making us their most awarded mobile network over the last five years. In addition, P3, a global crowdsourced data benchmarking company using real people and real devices, awarded us the US Test Champion, sweeping the national benchmark for all 13 categories tested, including AI Services Champion.

Turning now to our ongoing investments into our network, we continue to push the envelope of what's possible. In Q2, we rolled out live translation on beta. This is our first network-native AI application, embedding AI models directly into our core.

Longer-term, we believe our network will become the connective tissue for physical AI with inferencing at the edge. I am so excited by the opportunity here, highlighting what a low-latency, high-capacity network can deliver. We continue to partner with key industry leaders here, including Figure AI.

Now on value, something we guard zealously, we continue to lead the industry while ensuring that customers are able to take advantage of America's best network. Our back-book pricing remains a clear advantage to our differentiated growth strategy.

We continue to abide by the more-for-more philosophy. One example of this is our recent initiative where we modernize legacy rate plans to ensure all of our customers can benefit from our great nationwide 5G advanced network.

On customer experience, we're continuing to meet the customer where they want, while driving digital transformation to further enhance the experience. 10 years ago, we launched T-Mobile Tuesdays because we deeply believe that here at T-Mobile, we don't think customers should have to prove loyalty but rather receive thankings from us just by being a customer.

In June, we celebrated that milestone with Member Month, which was a tremendous success that truly underscored the spirit of the un-carrier. We rolled out many new member benefits and brought back old favorites from the Delta Premium in-flight beverage on us to free DashPass for a year to gas for $1.99 per gallon at select Shell gas stations. This drove record momentum in T-Life usage and we ended the quarter with over 30 million monthly active users.

Pulling it all together, this differentiation is what drives industry-leading financial growth, and we delivered again across every key metric in Q2. Postpaid service revenue, up 13%, total service revenue, up 9%, both at multiples to our competition. Core adjusted EBITDA, up 12%, with industry-leading free cash flow margin of 25%.

This is what this team does, deliver day in and day out. Our results speak for themselves, as you can see with our industry-leading NPS. What fuels that differentiation is the incredible future-proofed asset base we've built and our willingness to continue to invest to build it. And this is only just the beginning.

Peter, over to you.

‌Peter Osvaldik - T-Mobile US Inc - Chief Financial Officer

All right. Thank you, Srini. As you can see, we had a fabulous Q2, which reinforces our strong guidance for the remainder of the year, so let me add some additional color, starting with accounts, where we continue to expect postpaid account net additions to be between $950,000 and $1,050,000 on the strength of the underlying momentum in the business.

As part of our full-year plan and guidance, we anticipated our Q3 rate plan modernization would result in a temporary elevated account churn profile and expect Q3 net postpaid account additions to be approximately $250,000. It should be noted that the impact to postpaid phone churn is lower as the modernization impact is concentrated more in accounts with fewer lines.

In the first half of the year, we have delivered almost 500,000 net postpaid account additions, so we are well on our way to delivering within our guidance range. This modernization also creates strong value both for customers and T-Mobile and sets us up to deliver against our 2027 guidance ambitions.

So turning to service revenues, we continue to expect to deliver full-year service revenues of approximately $77 billion this year, representing 8% growth, with Q3 expectations of approximately $19.3 billion, or up 6% year-over-year. As part of that service revenue guide, we continue to set back strong postpaid ARPA growth of between 2.5% and 3% this year.

We continue to expect core adjusted EBITDA to be between $37.1 billion and $37.5 billion for the full year, representing 10% growth year-over-year at the midpoint. As part of that, we expect Q3 core adjusted EBITDA of approximately $9.4 billion or up 8% year-over-year.

Our expectation for full-year 2026 cash CapEx remains unchanged at approximately $10 billion. And finally, we are increasing our adjusted free cash flow guidance to now be between $18.4 billion and $18.8 billion, an increase of $200 million at the midpoint, primarily driven by lower cash income taxes.

Our philosophical approach to guidance, as you are seeing play out, is to begin the year with an ambitious and industry-leading guidance range based on our best view at the time, targeting to land at the midpoint of that strong guidance range and providing updates throughout the year as warranted.

Turning to shareholder returns. In addition to our dividend, we're also excited to have repurchased an incremental $2.5 billion in Q2 and through July 17. If you step back, since beginning our share buyback program in late 2022, we have repurchased 253 million shares and reduced total shares outstanding to $1.07 billion.

While we continue to execute share buybacks this year, including with our previously increased authorization, we are also thoughtfully maintaining a capital envelope that is considerate of upcoming spectrum opportunities in both 2027 and 2028, including C-Band

2.0 and 2.7 gigahertz, which represents an opportunity to further cement our network leadership position and provide increased value creation through, for example, additional 5G broadband capacity unlock.

To sum it all up, we continue to see strong momentum in the business and cannot be more excited for the future. And so with that, I'll now turn the call back to Cathy to begin the Q&A. Cathy?

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