T-Mobile US, Inc. (NASDAQ: TMUS)

T-Mobile achieved exceptional customer growth in Q1 2025, posting its best ever first-quarter postpaid net customer additions of 1.3 million, an increase of 117 thousand year-over-year. This performance was driven by higher gross additions across all customer categories, reflecting the company's effective customer-first focus and its winning combination of network quality, value, and service.

Postpaid phone net customer additions reached 495 thousand during the quarter, which, while slightly below the 532 thousand adds from Q1 2024, still represented industry-leading performance. Postpaid phone churn increased slightly to 0.91% from 0.86% in the prior year period, but remained relatively low, indicating strong customer loyalty. The company also added 205 thousand postpaid net accounts, continuing its successful strategy of attracting entire households to its services.

T-Mobile's High Speed Internet business maintained its strong momentum, adding 424 thousand net customers, up 4.7% year-over-year. This marks the 13th consecutive quarter that T-Mobile has led the industry in broadband net additions, bringing its total High Speed Internet customer base to 6.9 million. The company's fixed wireless offering continues to resonate with consumers seeking an alternative to traditional broadband providers.

T-Mobile's customer growth translated into exceptional financial performance in Q1 2025. Total service revenues increased 5.2% year-over-year to $16.9 billion, with postpaid service revenues growing at an even stronger rate of 7.6% to reach $13.6 billion. This growth rate is more than three times that of T-Mobile's next closest wireless competitor, demonstrating the company's continued market share gains and successful monetization of its growing customer base.

Net income jumped 24.4% year-over-year to $3.0 billion, marking the company's best ever first-quarter net income. This strong bottom-line growth led to diluted earnings per share of $2.58, representing a 29.0% increase compared to Q1 2024. The EPS growth outpaced net income growth due to the company's ongoing share repurchase program, which has reduced the number of outstanding shares.

Core Adjusted EBITDA, which excludes lease revenues, increased 8.4% year-over-year to $8.3 billion, growing at double the average rate of T-Mobile's wireless peer group. This improvement reflects the company's effective cost management and operating leverage as it scales its business. Additionally, adjusted free cash flow surged 31.3% to a record Q1 level of $4.4 billion, supported by a 34.7% increase in net cash provided by operating activities, which reached $6.8 billion.

T-Mobile continues to extend its overall network leadership through innovation and technology advancements. As the only carrier in the country to roll out a nationwide 5G Advanced network, T-Mobile is leveraging its standalone 5G core to deliver superior performance. This unique network architecture enables advanced carrier aggregation, which has allowed T-Mobile to achieve record-breaking 6.3 Gbps downlink speeds in a recent field test. The 5G Advanced network also supports dynamic slicing, lower latency, and more efficient IoT throughput, all of which contribute to an enhanced customer experience.

In a groundbreaking move, T-Mobile launched T-Satellite, the only satellite network in the US that works on most modern smartphones released in the last four years. This innovative service seamlessly connects from terrestrial to satellite networks, providing an unparalleled direct-to-cell experience. The beta program already has hundreds of thousands of active users and has delivered over a million messages. Notably, T-Mobile is offering this service to any mobile customer enrolled in the beta, including AT&T and Verizon customers, further demonstrating its commitment to industry leadership.

T-Mobile's network excellence continues to be recognized by third-party evaluators. Opensignal named T-Mobile the global winner in download speed experience among countries with large landmass, highlighting that T-Mobile is the only carrier in the world with this honor. Additionally, RootMetrics awarded T-Mobile with the best 5G availability for the eighth consecutive time in its February 2025 report, confirming the company's sustained leadership in 5G deployment and performance.

T-Mobile demonstrated exceptional cash flow generation in Q1 2025, with net cash provided by operating activities surging 34.7% year-over-year to $6.8 billion. This substantial increase reflects the company's effective monetization of its growing customer base and disciplined cost management. Capital expenditures, including capitalized interest, decreased 6.7% to $2.5 billion compared to the prior year period, indicating improving capital efficiency as T-Mobile's network deployment enters a more mature phase.

The combination of higher operating cash flow and lower capital expenditures resulted in adjusted free cash flow of $4.4 billion, a 31.3% increase from Q1 2024 and a record for any first quarter in the company's history. This strong cash generation positions T-Mobile well to continue investing in growth initiatives while returning significant value to shareholders.

In Q1 2025, T-Mobile returned $3.5 billion to shareholders, consisting of $2.5 billion in share repurchases and $1.0 billion in cash dividends. These shareholder returns are part of the company's current authorization of up to $14.0 billion. Since the inception of its capital return program, T-Mobile has returned a cumulative $34.8 billion to shareholders, split between $29.8 billion in repurchases and $5.1 billion in cash dividends. The company's robust cash flow generation supports this significant and sustained return of capital while maintaining financial flexibility for future investments.

Following its strong Q1 2025 performance, T-Mobile has raised key elements of its 2025 financial guidance. The company maintained its postpaid net customer additions guidance of 5.5 to 6.0 million, which is already at a historically high level, reflecting confidence in continued strong customer acquisition and retention. T-Mobile increased its Core Adjusted EBITDA guidance by $100 million at the midpoint to a range of $33.2 to $33.7 billion, indicating expectations for improved operational efficiency and profitability.

The company also raised its guidance for net cash provided by operating activities at the midpoint to a range of $27.0 to $27.5 billion, while keeping capital expenditure guidance unchanged at approximately $9.5 billion. As a result, T-Mobile increased its Adjusted Free Cash Flow guidance at the midpoint to $17.5 to $18.0 billion, suggesting continued strong cash generation potential for the remainder of the year.

It's worth noting that T-Mobile's guidance excludes the pending acquisitions of UScellular and Metronet, but includes the incorporation of Vistar Media, Blis, and Lumos. The updated outlook reflects management's confidence in the company's ability to execute on its strategy of driving profitable growth through customer expansion, network leadership, and operational excellence. CEO Mike Sievert's comments highlight the company's optimistic view of its competitive positioning and growth prospects for the remainder of 2025.