Latest / Beta Finch - T-Mobile US - TMUS - EN / T-Mobile US Q2 2026 Earnings Analysis

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T-Mobile US Q2 2026 Earnings Analysis · Beta Finch - T-Mobile US - TMUS - EN

• 0:08
  Speaker 1: Welcome to Beta Finch, your AI powered earnings breakdown. Today
• 0:12
  Speaker 1: we're diving into T Mobile's second quarter twenty twenty six results,
• 0:16
  Speaker 1: and Jordan, this one's got a lot of moving pieces.
• 0:20
  Speaker 2: It really does, Alex. But before we get into it,
• 0:23
  Speaker 2: this podcast is AI generated content for educational and entertainment
• 0:29
  Speaker 2: purposes only. Nothing we discuss should be considered investment advice.
• 0:33
  Speaker 2: Always to your own research and consul the qualified financial
• 0:37
  Speaker 2: advisor before making any investment decisions.
• 0:40
  Speaker 1: Right, Thanks, Jordan. Okay, let's set the scene. T Mobile
• 0:44
  Speaker 1: CEO Serny Gopollen came out swinging, calling this another extraordinary quarter,
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  Speaker 1: and honestly, the numbers back that up. Post paid service
• 0:54
  Speaker 1: revenue up thirteen percent year over year, total service revenue
• 0:57
  Speaker 1: up nine percent, core adjusted EBITDA up twelve percent. Those
• 1:02
  Speaker 1: are big numbers for company this size.
• 1:04
  Speaker 2: In the headline, stat that jumped out at me was
• 1:07
  Speaker 2: their net Promoter score forty six, which they're calling the
• 1:11
  Speaker 2: highest NPS in wireless history among the big three carriers.
• 1:15
  Speaker 2: That's not just a vanity metric either, because it's translating
• 1:18
  Speaker 2: directly into subscriber growth. They added two hundred and seventy
• 1:23
  Speaker 2: seven thousand post paid accounts in second quarter.
• 1:27
  Speaker 1: Let's talk guidance because CFO Peter Oswaldek gave a lot
• 1:30
  Speaker 1: of detail here. Full year service revenue guide stays around
• 1:34
  Speaker 1: seventy seven billion dollars, that's eight percent growth. Core adjusted
• 1:39
  Speaker 1: EBITDA guided between thirty seven dollars and ten cents and
• 1:42
  Speaker 1: thirty seven point five billion dollars, roughly ten percent growth.
• 1:47
  Speaker 1: And here's a nice surprise for shareholders. They actually raised
• 1:50
  Speaker 1: free cash flow guidance to eighteen dollars and forty cents
• 1:54
  Speaker 1: to eighteen dollars and eighty cents billion, up two hundred
• 1:57
  Speaker 1: million dollars at the midpoint, mostly thanks to lower cash taxes.
• 2:02
  Speaker 2: What I found interesting is the postpaid ARPA story. Headline
• 2:06
  Speaker 2: growth was two percent, which sounds a little soft compared
• 2:10
  Speaker 2: to that thirteen percent service revenue number, but Oswaldeg explained
• 2:13
  Speaker 2: that's a comp issue. Last year's US Cellular acquisition and
• 2:18
  Speaker 2: the fiber joint venture brought in lower ERPA customers strip
• 2:22
  Speaker 2: out the M and A noise, and ARPA actually grew
• 2:25
  Speaker 2: three point seven percent year over year. By the end
• 2:28
  Speaker 2: of the call, he even said they're now tracking toward
• 2:31
  Speaker 2: the higher end of their two point five to three
• 2:34
  Speaker 2: percent full year ARPA guidance.
• 2:37
  Speaker 1: That's a good example of why you have to listen
• 2:40
  Speaker 1: past the top line number. Now one thing investors should
• 2:43
  Speaker 1: flag for third quarter. They're expecting post paid net account
• 2:46
  Speaker 1: editions to drop to around two hundred and fifty thousand,
• 2:49
  Speaker 1: way down from the pace we've seen.
• 2:52
  Speaker 2: Right, and management was upfront about why they're doing a
• 2:55
  Speaker 2: rate plan modernization in third quarter that's expected to temporarily
• 2:59
  Speaker 2: bump up account churn, but they specifically noted it's concentrated
• 3:03
  Speaker 2: in accounts with fewer lines, so phone churn impact should
• 3:07
  Speaker 2: be much smaller. It's a deliberate plan dip, not a
• 3:10
  Speaker 2: demand problem. Speaking of churn, actually, postpaid phone churn came
• 3:15
  Speaker 2: in at just zero point eighty five percent this quarter,
• 3:18
  Speaker 2: down meaningfully year over year.
• 3:20
  Speaker 1: Let's get into the strategic stuff because there was a
• 3:23
  Speaker 1: lot here. Fixed wireless broadband continues to be a huge
• 3:27
  Speaker 1: growth engine. They call it five G broadband now and
• 3:31
  Speaker 1: they're running under what they call a follow capacity model,
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  Speaker 1: basically only selling broadband capacity that would otherwise go and
• 3:38
  Speaker 1: used on the network.
• 3:40
  Speaker 2: And they got a great question on this from an analyst,
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  Speaker 2: worry that FWA is eating up too much network capacity.
• 3:46
  Speaker 2: CTO John Saw pushed back pretty firmly, saying capacity is
• 3:50
  Speaker 2: still several multiples of what they're actually using. In that
• 3:54
  Speaker 2: AI traffic, which everyone's worried about, hasn't materially hit mobile
• 3:58
  Speaker 2: networks yet because the most AI workloads live and wireline
• 4:02
  Speaker 2: data centers, not on phones.
• 4:05
  Speaker 1: They also reiterated their target of fifteen million fixed wireless
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  Speaker 1: customers by twenty thirty and interestingly said that number doesn't
• 4:12
  Speaker 1: even include upside from new spectrum. They're eyeing C band
• 4:16
  Speaker 1: two point zero and two point seven gigahertz, which could
• 4:19
  Speaker 1: become available in twenty twenty seven and twenty twenty eight.
• 4:23
  Speaker 2: That spectrum conversation was a big theme throughout the Q
• 4:26
  Speaker 2: and A management was clearly excited, but also kg on specifics.
• 4:31
  Speaker 2: Sreeney compared this moment to their earlier bed On five
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  Speaker 2: G standalone, saying they see it as another chance to
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  Speaker 2: cement network leadership ahead of competitors. They're being deliberately vague
• 4:42
  Speaker 2: on how much they'll spend, which makes sense given they
• 4:45
  Speaker 2: haven't seen final auction details yet.
• 4:48
  Speaker 1: On the capitol return side, they bought back two point
• 4:51
  Speaker 1: five billion dollars in stock during the quarter. And through
• 4:54
  Speaker 1: mid July. Since starting buybacks back in late twenty twenty two,
• 4:58
  Speaker 1: they've now retired two hundred fifty three million shares, bringing
• 5:02
  Speaker 1: shares outstanding down to about one point zero seven billion.
• 5:06
  Speaker 2: One thing worth noting for investors. Osvaldek was pretty clear
• 5:10
  Speaker 2: that they're keeping some capital in reserve for those upcoming
• 5:13
  Speaker 2: spectrum auctions, so buy back pace going forward may be
• 5:16
  Speaker 2: a bit more measured and opportunistic rather than a steady
• 5:19
  Speaker 2: quarterly number.
• 5:21
  Speaker 1: There were also some fun tidbits. They launched live Translation
• 5:24
  Speaker 1: as their first network native AI feature, They're testing edge
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  Speaker 1: AI use cases with partners like Figure Ai, and their
• 5:31
  Speaker 1: T Mobile visa card with Capital One has been one
• 5:33
  Speaker 1: of that program's most successful co brand launches.
• 5:37
  Speaker 2: And on a broadband bundling question, T Mobile pushed back
• 5:41
  Speaker 2: on the way AT and T frames convergence stats. While
• 5:44
  Speaker 2: AT and T sites forty five percent of Internet customers
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  Speaker 2: also having wireless, T Mobile's chief Customer Experience officer Andre
• 5:52
  Speaker 2: argued that if you count multi line and device bundles,
• 5:55
  Speaker 2: their number is closer to seventy percent.
• 5:58
  Speaker 1: So, stepping back, what's the takeaway for investors.
• 6:01
  Speaker 2: Here, I'd say the core story is durable premium growth.
• 6:06
  Speaker 2: Strong network perception is driving higher value customers in the
• 6:10
  Speaker 2: door pored in. ARPA is running about twenty percent above
• 6:13
  Speaker 2: port out. ARPA and clb's are up double digits. The
• 6:17
  Speaker 2: near term wrinkle is that third quarter net ads will
• 6:20
  Speaker 2: look weak because of the planned rate plan modernization. That's
• 6:24
  Speaker 2: expected and shouldn't be mistaken for a demand slow down.
• 6:28
  Speaker 2: The bigger swing factor for twenty twenty seven and twenty
• 6:30
  Speaker 2: twenty eight is going to be how they play the
• 6:32
  Speaker 2: Spectrum auctions and how much capital that requires.
• 6:36
  Speaker 1: And as always, everything discussed is AI generated analysis for
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  Speaker 1: educational purposes. Past performance doesn't guarantee future results. Please do
• 6:46
  Speaker 1: your own due diligence.
• 6:48
  Speaker 2: Well said, T Mobile heads into the back half of
• 6:51
  Speaker 2: the year with strong momentum, a raised free cash flow outlook,
• 6:55
  Speaker 2: and some big strategic bets on horizon with Spectrum. We'll
• 6:58
  Speaker 2: be watching closely for update dates as those auctions take shape.
• 7:02
  Speaker 1: That's it for this episode of Beta Finch. Thanks for
• 7:06
  Speaker 1: tuning in, and we'll catch you next time as we
• 7:08
  Speaker 1: break down another quarter.
• 7:10
  Speaker 2: See you then,