2
3 | Highlights |
4 | Account Metrics |
6 | Financial Metrics |
12 | Capital Structure |
13 | Guidance |
14 | Contacts |
15 | Financial and Operational Tables |
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DIGITAL JOURNEY
T-LIFE
(2)
ADJUSTED
FREE CASH FLOW
NET CASH
PROVIDED BY OPERATING ACTIVITIES
$7.3B
SS.1B
STRONG MARGIN OF 38%
STRONG IHARGIN
OF 26%
MONTHLY ACTIVE USERS
$19.4B
GREW 6%YoY
GREW 27% YoY
GREW 11% YoY
INDUSTRY-LEADING GROWTH
DILUTED EPS OF 53.22 GREW 34% YoY
INDUSTRY-LEADING GROWTH
SERVICE REVENUES
NET INCOME
2
CORE ADJUSTED EBITDA '
$3.SB
T
Highlights
3
POSTPAID
POSTPAID
/155.73 274K I
POSTPAIDARPA
NETACCOUNT
»
$1d.3B
SERVICE REVENUES
GREW4% YoY
TOTAL POSTPAID ACCOUNTS GREW 3°/ YoY
GREW 9OZ+YoY
INDUSTRY-LEADING GROWTH(
NAG
O P E N S I G N A L
(MAJOR CARRIER)
(MAJOR CARRIER),ASWELLAS FASTEST MOBILE NETWORK, BEST MOBILE NETWORK COVERAGE, BEST MOBILE NETWORK PRICING(MAJOR CARRIER), AND HIGHEST MOBILE NETWORK CUSTOMER SATISFACTION
FOR 5G COVERAGE AND TIME ON 5G IN LARGE LAND-AREA MARKETS
AGAIN, SWEEPING ALL 13 AWARD CATEGORIES FOR THE SECOND CONSECUTIVE QUARTER
Industry-leading claims are based on consensus expectations if results are not yet reported.
2026
Core Adjusted EBITDA, Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are non-GAAP financial measures. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for these non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures tables. We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect Net income, including, but not limited to, Special Items, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable.
Year-Over-Year
Postpaid Accounts
(in thousands)
33,979 34,240 34,439 34,700 34,974
396
261
217
277
274
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026
Postpaid net account additions Postpaid accounts
During Q3 2025, we acquired 1,448,000 postpaid accounts, net of certain base adjustments, through the UScellular acquisition.
During Q3 2025, we acquired 633,000 postpaid accounts from Metronet and other acquisitions.
During Q1 2026, we recognized a base adjustment to decrease postpaid accounts by 18,000, primarily due to combining certain business accounts that have multiple billing account numbers.
During Q2 2026, Metronet agreed to repurchase certain customer accounts, resulting in a base adjustment to decrease postpaid accounts by 16,000.
These base adjustments had no impact on postpaid net account additions.
Continued growth in Postpaid accounts with a decrease in net additions primarily due to:Higher account deactivations driven by higher average broadband-only accounts which have higher churn, the temporary impact of our rate plan modernization, and the impact of a growing account base, including following the acquisitions of UScellular and Metronet during Q3 2025
Sequential
Higher account deactivations driven by the temporary impact of our rate plan modernization, higher average broadband-only accounts which have higher churn, and seasonally higher switching activity
Mostly offset by higher gross account additions, including seasonally higher switching activity
Year-Over-Year
Postpaid ARPA
Postpaid ARPA increased 4% primarily due to:$155.73
$152.91
$149.44
$150.17
$151.93
Higher fee revenue, including from the adoption of tax and fee exclusive plans, and the positive impact from our rate plan modernization
An increase in customers per account, including from the continued adoption of 5G broadband and continued growth of T-Mobile for Business accounts, partially offset by fiber and UScellular accounts with fewer customers per account
Partially offset by increased promotional activity, including the success of bundled offerings
Sequential
The positive impact from our rate plan modernization and higher fee revenue, including from the adoption of tax and fee exclusive plans
Partially offset by increased promotional activity, including the success of bundled offerings
Year-Over-Year
Higher average broadband-only accounts which have higher churn and the temporary impact of our rate plan modernization
0.97%
0.99%
1.04% 1.04%
Postpaid Account Churn
1.09%
Sequential
The temporary impact of our rate plan modernization, higher average broadband-only accounts which have higher churn, and seasonally higher switching activity
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Year-Over-Year
$19,375
Service revenues increased 6% primarily due to:Service Revenues
($ in millions)
$18,831
$18,983
$18,241
$18,702
An increase in Postpaid service revenues, including following the acquisitions of UScellular and Metronet during Q3 2025
Partially offset by lower Prepaid service revenues
Sequential
An increase in Postpaid service revenues
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Year-Over-Year
Higher average postpaid accounts, including following the acquisitions of UScellular and Metronet during Q3 2025
Higher postpaid ARPA
Sequential
Higher postpaid ARPA
Higher average postpaid accounts
Postpaid Service Revenues
($ in millions)
$15,853 $16,269
$14,882
$15,378
$15,629
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Year-Over-Year
$5,364
Equipment revenues increased 13% primarily due to:Equipment Revenues
($ in millions)
$3,996
$3,929
$3,465
$3,524
Higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix and higher manufacturer pricing
Higher liquidation revenue, primarily due to a higher number of liquidated devices and an increase in the high-end phone mix
Partially offset by a decrease in the total number of devices sold, primarily driven by lower prepaid devices
Sequential
Higher average revenue per device sold, net of promotions, primarily driven by higher manufacturer pricing and an increase in the high-end phone mix
A higher number of devices sold, including seasonal trends
Year-Over-Year
Higher average cost per device sold, primarily driven by higher manufacturer pricing and an increase in the high-end phone mix
Higher liquidation costs, primarily due to a higher number of liquidated devices and an increase in the high-end phone mix
Partially offset by a decrease in the total number of devices sold, primarily driven by lower prepaid devices
Cost of Equipment Sales, exclusive of D&A
($ in millions, % of Equipment sales*)
$5,488
$4,853
$5,055 $5,444
140.2% 129.9% 137.4% 143.4% 138.6%
$6,967
Sequential
Higher average cost per device sold, primarily driven by higher manufacturer pricing and an increase in the high-end phone mix
A higher number of devices sold, including seasonal trends
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Cost of Equipment sales, excl. D&A
% of Equipment sales, excl. D&A
*Equipment sales is defined as Equipment revenues less Lease revenues.
Year-Over-Year
Cost of Services, exclusive of D&A
($ in millions, % of Service revenues)
$2,873
$3,305
$3,339
$2,978 $3,007
Cost of services, exclusive of D&A, increased 5% primarily due to:$2,811 | $3,031 | $2,894 | $2,865 | $2,939 |
| |||||
15.4% | 16.2% | 15.4% | 15.1% | 15.2% | Sequential |
Higher wholesale network access costs and amortization of customer installation fees paid to Metronet and Lumos
Cost of services, ex. D&A and Special Items UScellular merger-related costs
Other Special Items
% of Srvc revs, ex. D&A and Special Items
Year-Over-Year
Selling, General and Administrative (SG&A) Expense
($ in millions, % of Service revenues)
SG&A expense was relatively flat primarily due to:$6,570
$6,015
$5,966
$5,834
$6,020
$5,828
$6,106
$5,709
$5,569
$5,778
32.0%
32.6%
30.3%
29.3%
29.8%
Lower business tax refunds and credits
Higher bad debt expense
Offset by lower personnel-related costs, including payroll and benefits, and lower external labor and professional services expenses
Sequential
Lower vendor credits related to software services
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026SG&A expense, ex. Special Items UScellular merger-related costs Other Special Items
% of Srvc revs, ex. Special Items
Year-Over-Year
$3,455
Net income was $3.5 billion and Diluted earnings per share was $3.22 in Q3 2026, compared to $2.7 billion and
Net Income
($ in millions, % of Service revenues)
$3,239
$2,714
$2,504
$2,103
14.9%
11.2%
13.3%
17.1%
17.8%
$2.41 in Q3 2025, primarily due to the factors described above and included the following:UScellular merger-related costs, net of tax, of $98 million, or $0.09 per share, in Q3 2026 and $55 million, or $0.05 per share, in Q3 2025
Impairment expense related to certain capitalized software development costs, net of tax, in Q3 2025 of
$208 million, or $0.18 per share
Sequential
Diluted Earnings Per Share
(Diluted EPS)
$2.99
$2.41
$2.27
$1.88
$3.22
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Net income was $3.5 billion and Diluted earnings per share was $3.22 in Q3 2026, compared to $3.2 billion and
$2.99 in Q2 2026, primarily due to the factors described above and included the following:UScellular merger-related costs, net of tax, of $98 million, or $0.09 per share, in Q3 2026 and $146 million, or $0.14 per share, including accelerated depreciation, in Q2 2026
Year-Over-Year
$9,240 $9,537 $9,620
Core Adjusted EBITDA increased 11% primarily due to:Core Adjusted EBITDA*
($ in millions, % of Service revenues)
Higher Total service revenues
$8,680
$8,445
47.6%
45.2%
49.1%
50.2%
49.7%
Higher Equipment revenues, excluding Lease revenues
Partially offset by higher Cost of equipment sales, excluding Special Items, and higher Cost of services, excluding Special Items
Sequential
*Excludes Special Items (see detail on page 22)
Core Adjusted EBITDA increased slightly, primarily due to:Higher Equipment revenues, excluding Lease revenues
Higher Total service revenues
Mostly offset by higher Cost of equipment sales, excluding Special Items, and higher SG&A expenses, excluding Special Items
Year-Over-Year
Higher net cash outflows from changes in working capital
Partially offset by higher Net income, adjusted for non-cash income and expenses
Net Cash Provided by Operating Activities
($ in millions)
$6,654
$7,457
$7,222 $7,500 $7,341
Sequential
Higher net cash outflows from changes in working capital
The impact of Net payments for merger-related costs on Net cash provided by operating activities was $198 million in Q3 2026 compared to $181 million in Q2 2026 and $96 million in Q3 2025.
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Year-Over-Year
Cash Purchases of Property and Equipment, incl. Capitalized Interest
($ in millions, % of Service revenues)
Cash purchases of property and equipment, including capitalized interest, decreased 14% primarily due to:Planned timing of capital purchases
Sequential
$2,639
$2,703
$2,469
$2,623
$2,270
14.5%
13.2%
13.9%
14.2%
11.7%
Cash purchases of property and equipment, including capitalized interest, decreased 16% primarily due to:Planned timing of capital purchases
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Year-Over-Year
Lower Cash purchases of property and equipment
Partially offset by lower Net cash provided by operating activities
Adjusted Free Cash Flow
($ in millions)
$5,071
Sequential
$4,818
$4,599
$4,797
$4,185
Adjusted Free Cash Flow increased 6% primarily due to:Lower Cash purchases of property and equipment
Partially offset by lower Net cash provided by operating activities
The impact of Net payments for merger-related costs on Adjusted Free Cash Flow was $198 million in Q3 2026 compared to $181 million in Q2 2026 and $96 million in Q3 2025.
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Total Debt (Excluding Tower Obligations),
Net Debt (Excluding Tower Obligations), and
Net Debt to LTM Net Income and Core Adj. EBITDA Ratios
($ in billions)
Total debt, excluding tower obligations, at the end of Q3 2026 was $86.0 billion.
Net debt, excluding tower obligations, at the end of Q3 2026 was $80.3 billion.
$86.5 $88.6 $88.2 $86.9 $86.0
$83.2
$83.0
$84.7
$84.1
$80.3
7.0x
7.5x
8.0x
8.0x
7.1x
2.5x
2.4x
2.4x
2.3x
2.2x
Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q3 2026Net Debt (excluding Tower Obligations) Cash and Cash Equivalents
Net Debt to LTM Net Income Ratio
Net Debt to LTM Core Adjusted EBITDA Ratio
Stockholder Returns
($ in millions)
$3,457
$3,595
$3,257
$3,504
$2,415
$2,156
$2,470 $2,460
$1,101
$1,089
$1,135
$987
$4,901
$1,120
$6,021
On December 11, 2025, the company announced that its Board of Directors (the "Board") authorized a stockholder return program for up to $14.6 billion that will run through December 31, 2026, consisting of additional repurchases of shares and payment of cash dividends.
On April 23, 2026, the company announced that the Board increased the company's 2026 stockholder return authorization to up to
$18.2 billion, representing an increase of up to
$3.6 billion from its prior 2026 authorization.
During Q3 2026, the Board declared a cash dividend of $1.17 per share, an increase of
$0.15 per share, or 15%. The dividend will be paid on December 10, 2026, to stockholders of record as of the close of business on November 25, 2026.
On a cumulative basis, since the company initiated its stockholder return program in Q3 2022, a total of
$58.1 billion has been returned to stockholders as of September 30, 2026, with 264.4 million shares repurchased for $46.7 billion, and cumulative cash dividends of $11.5 billion.
During Q3 2026, 13.6 million shares were repurchased for $2.4 billion.
During Q3 2026, the company paid a cash dividend of $1.02 per share of common stock, or
$1.1 billion, on September 10, 2026.
In Q4 2026, through October 23, 2026, the company repurchased an additional $791 million in common stock, totaling $3.2 billion in stock repurchased since the beginning of Q3 2026.
Stock buybacks Dividends paid
2026 Outlook$28.4 to $28.8 billion
$28.7 to $28.8 billion
~$10.0 billion
$18.7 to $18.8 billion
$150 million
$18.4 to $18.8 billion
Adjusted Free Cash Flow
No change
~$10.0 billion
Capital expenditures (3)
$150 million
Previous
Net cash provided by operating activities
Change at Midpoint
Revised
$37.35 to $37.45 billion
24% to 25%
~1.0 million
N/A
Metric
million
Postpaid net account additions 950 thousand to 1.05
No change
Net income (1) N/A N/A
Effective tax rate 25% to 26% (100) bps
Core Adjusted EBITDA (2) $37.1 to $37.5 billion $100 million
We are not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income, including, but not limited to, Special Items, Income tax expense and Interest expense. Core Adjusted EBITDA should not be used to predict Net income as the difference between this measure and Net income is variable.
Management uses Core Adjusted EBITDA as a measure to monitor the financial performance of our operations, excluding the impact of lease revenues from our related device financing programs.
Capital expenditures means cash purchases of property and equipment, including capitalized interest.
Cathy Yao | Matthew Hale | Jon Lanterman |
Senior Vice President | Senior Director | Senior Director |
Charles Buffum | Chris Lo | Danna Tao | Aner Hezroni |
Senior Manager | Manager | Manager | Senior Analyst |
[email protected] https://investor.t-mobile.com
T-Mobile US, Inc.Condensed Consolidated Balance Sheets (Unaudited)
(in millions, except share and per share amounts) | September 30, 2026 | December 31, 2025 |
Assets | ||
Current assets
Cash and cash equivalents | $ 5,620 | $ 5,598 |
Accounts receivable, net of allowance for credit losses of $251 and $226 | 5,012 | 4,874 |
Equipment installment plan receivables, net of allowance for credit losses and unamortized discount of $723 and $733 | 4,530 | 4,997 |
Inventory | 3,085 | 2,405 |
Prepaid expenses | 909 | 1,215 |
Other current assets | 2,686 | 5,372 |
Total current assets | 21,842 | 24,461 |
Property and equipment, net | 36,035 | 38,333 |
Operating lease right-of-use assets | 24,208 | 25,692 |
Financing lease right-of-use assets | 2,987 | 2,760 |
Goodwill | 13,665 | 13,678 |
Spectrum licenses | 99,980 | 98,032 |
Other intangible assets, net | 3,066 | 3,843 |
Equipment installment plan receivables due after one year, net of allowance for credit losses and unamortized discount of $199 and $213 | 2,457 | 2,683 |
Other assets | 8,864 | 9,755 |
Total assets | $ 213,104 | $ 219,237 |
Liabilities and Stockholders' Equity | ||
Current liabilities | ||
Accounts payable and accrued liabilities | $ 8,624 | $ 10,280 |
Short-term debt | 6,343 | 5,135 |
Deferred revenue | 1,407 | 1,533 |
Short-term operating lease liabilities | 3,644 | 3,814 |
Short-term financing lease liabilities | 1,158 | 1,163 |
Other current liabilities | 2,815 | 2,575 |
Total current liabilities | 23,991 | 24,500 |
Long-term debt | 77,323 | 79,649 |
Long-term debt to affiliates | - | 1,498 |
Tower obligations | 3,419 | 3,532 |
Deferred tax liabilities | 21,715 | 19,583 |
Operating lease liabilities | 25,017 | 26,371 |
Financing lease liabilities | 1,136 | 1,107 |
Other long-term liabilities | 4,196 | 3,794 |
Total long-term liabilities | 132,806 | 135,534 |
Commitments and contingencies | ||
Stockholders' equity | ||
Common stock, par value $0.00001 per share, 2,000,000,000 shares authorized; 1,280,056,882 and 1,275,774,235 shares issued, 1,062,845,266 and 1,106,930,661 shares outstanding | - | - |
Additional paid-in capital | 70,089 | 69,460 |
Treasury stock, at cost, 217,211,616 and 168,843,574 shares issued | (40,102) | (30,545) |
Accumulated other comprehensive loss | (595) | (848) |
Retained earnings | 26,915 | 21,136 |
Total stockholders' equity | 56,307 | 59,203 |
Total liabilities and stockholders' equity | $ 213,104 | $ 219,237 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended | Nine Months Ended September 30, | ||||
(in millions, except share and per share amounts) | September 30, 2026 | June 30, 2026 | September 30, 2025 | 2026 | 2025 |
Revenues | |||||
Postpaid revenues | $ 16,269 | $ 15,853 | $ 14,882 | $ 47,751 | $ 42,554 |
Prepaid revenues | 2,427 | 2,473 | 2,625 | 7,417 | 7,911 |
Wholesale and other service revenues | 679 | 657 | 734 | 2,021 | 2,139 |
Total service revenues | 19,375 | 18,983 | 18,241 | 57,189 | 52,604 |
Equipment revenues | 3,929 | 3,524 | 3,465 | 11,449 | 10,608 |
Other revenues | 280 | 284 | 251 | 844 | 763 |
Total revenues | 23,584 | 22,791 | 21,957 | 69,482 | 63,975 |
Operating expenses | |||||
Cost of services, exclusive of depreciation and amortization shown separately below | 3,007 | 2,978 | 2,873 | 9,324 | 8,192 |
Cost of equipment sales, exclusive of depreciation and amortization shown separately below | 5,444 | 5,055 | 4,853 | 15,987 | 14,310 |
Selling, general and administrative | 6,020 | 5,834 | 6,015 | 17,820 | 16,900 |
Impairment expense | - | - | 278 | - | 278 |
Depreciation and amortization | 3,452 | 3,434 | 3,408 | 10,703 | 9,752 |
Total operating expenses | 17,923 | 17,301 | 17,427 | 53,834 | 49,432 |
Operating income | 5,661 | 5,490 | 4,530 | 15,648 | 14,543 |
Other expense, net | |||||
Interest expense, net | (1,031) | (1,055) | (924) | (3,117) | (2,762) |
Other expense, net | (90) | (107) | (78) | (329) | (135) |
Total other expense, net | (1,121) | (1,162) | (1,002) | (3,446) | (2,897) |
Income before income taxes | 4,540 | 4,328 | 3,528 | 12,202 | 11,646 |
Income tax expense | (1,085) | (1,089) | (814) | (3,004) | (2,757) |
Net income | $ 3,455 | $ 3,239 | $ 2,714 | $ 9,198 | $ 8,889 |
Net income $ 3,455 $ 3,239 $ 2,714 $ 9,198 $ 8,889
Other comprehensive income (loss), net of taxReclassification of loss from cash flow hedges, net of tax effect
of $18, $17, $16, $52 and $48 52 50 48 152 141
Gains (losses) on fair value hedges, net of tax effect of $9, $48,
$(7), $45 and $(55) 27 142 (20) 133 (160)
Unrealized gain (loss) on foreign currency translation
adjustment, net of tax effect of $1, $0, $0, $1 and $0 1 9 - 10 (1)
Prior service cost, net of amortization, and amortization of actuarial gain, on pension and other postretirement benefits, net
of tax effect of $(13), $(1), $0, $(14) and $(1) | (40) | (1) | (1) | (42) | (4) |
Other comprehensive income (loss) | 40 | 200 | 27 | 253 | (24) |
Total comprehensive income | $ 3,495 | $ 3,439 | $ 2,741 | $ 9,451 | $ 8,865 |
Earnings per share | |||||
Basic | $ 3.23 | $ 2.99 | $ 2.42 | $ 8.49 | $ 7.84 |
Diluted | $ 3.22 | $ 2.99 | $ 2.41 | $ 8.47 | $ 7.82 |
Weighted-average shares outstanding | |||||
Basic | 1,070,648,134 | 1,081,771,279 | 1,123,754,096 | 1,084,089,790 | 1,133,743,367 |
Diluted | 1,071,630,434 | 1,082,409,636 | 1,126,627,708 | 1,085,476,683 | 1,136,920,521 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended | Nine Months Ended September 30, | ||||
(in millions) | September 30, 2026 | June 30, 2026 | September 30, 2025 | 2026 | 2025 |
Operating activities | |||||
Net income | $ 3,455 | $ 3,239 | $ 2,714 | $ 9,198 | $ 8,889 |
Adjustments to reconcile net income to net cash provided by operating activities | |||||
Depreciation and amortization | 3,452 | 3,434 | 3,408 | 10,703 | 9,752 |
Stock-based compensation expense | 197 | 214 | 227 | 620 | 613 |
Deferred income tax expense | 637 | 893 | 797 | 2,212 | 2,505 |
Bad debt expense | 437 | 398 | 337 | 1,261 | 925 |
Losses from sales of receivables | 15 | 17 | 17 | 52 | 58 |
Impairment expense | - | - | 278 | - | 278 |
Changes in operating assets and liabilities | |||||
Accounts receivable | (9) | (498) | (366) | (669) | (797) |
Equipment installment plan receivables | (9) | 103 | 44 | 39 | 133 |
Inventory | (892) | 142 | (537) | (664) | (591) |
Operating lease right-of-use assets | 969 | 965 | 929 | 3,130 | 2,667 |
Other current and long-term assets | (122) | (354) | (322) | (443) | (983) |
Accounts payable and accrued liabilities | (421) | (265) | 890 | (1,094) | 729 |
Short- and long-term operating lease liabilities | (979) | (976) | (936) | (3,173) | (2,720) |
Other current and long-term liabilities | 334 | (3) | (239) | 222 | (409) |
Other, net | 277 | 191 | 216 | 669 | 247 |
Net cash provided by operating activities | 7,341 | 7,500 | 7,457 | 22,063 | 21,296 |
Investing activities | |||||
Purchases of property and equipment, including capitalized interest of $(7), $(6), $(13), $(20) and $(33) | (2,270) | (2,703) | (2,639) | (7,596) | (7,486) |
Purchases of spectrum licenses and other intangible assets, including deposits | (324) | (484) | (1,590) | (834) | (2,505) |
Proceeds from the sale of property, equipment and intangible
assets 2,927 16 18 3,038 2,091
Acquisition of companies, net of cash acquired - - (2,797) (1) (3,523)
Investments in unconsolidated affiliates, net 4 (3) (3,072) 1 (4,055)
Other, net 21 122 (59) (151) 371
Net cash provided by (used in) investing activities 358 (3,052) (10,139) (5,543) (15,107)
Financing activities
Proceeds from issuance of long-term debt, net 498 (5) 498 6,891 8,266
Repayments of financing lease obligations (331) (360) (318) (995) (964)
Repayments of long-term debt (1,367) (1,336) (828) (9,138) (4,564)
Repurchases of common stock
(2,418)
(2,320)
(2,479)
(9,564)
(7,528)
Dividends on common stock (1,089) (1,101) (987) (3,310) (2,986)
Tax withholdings on share-based awards
(86)
(31)
(92)
(271)
(394)
Other, net (55) (29) (32) (83) (80)
Net cash used in financing activities (4,848) (5,182) (4,238) (16,470) (8,250)
Effect of exchange rate changes on cash and cash
equivalents, including restricted cash - - - - 13
Change in cash and cash equivalents, including restricted
cash 2,851 (734) (6,920) 50 (2,048)
Cash and cash equivalents, including restricted cashBeginning of period 3,175 3,909 10,585 5,976 5,713
End of period $ 6,026 $ 3,175 $ 3,665 $ 6,026 $ 3,665
T-Mobile US, Inc.Condensed Consolidated Statements of Cash Flows (Continued) (Unaudited)
Three Months Ended | Nine Months Ended September 30, | ||||||
(in millions) | September 30, 2026 | June 30, 2026 | September 30, 2025 | 2026 | 2025 | ||
Supplemental disclosure of cash flow information | |||||||
Interest payments, net of amounts capitalized | $ 946 | $ 1,119 | $ 997 | $ 3,119 | $ 2,923 | ||
Operating lease payments | 1,302 | 1,303 | 1,269 | 4,142 | 3,685 | ||
Income tax payments, net of refunds received | 7 | 757 | 63 | 774 | 415 | ||
Non-cash investing and financing activities | |||||||
Change in accounts payable and accrued liabilities for purchases of property and equipment | $ 51 | $ (404) | $ 136 | $ (710) | $ (458) |
Operating lease right-of-use assets obtained in exchange for lease obligations | 582 | 540 | 1,064 | 1,647 | 2,138 |
Financing lease right-of-use assets obtained in exchange for lease obligations | 340 | 488 | 324 | 1,050 | 1,002 |
Debt assumed in the UScellular Acquisition | - | - | 1,653 | - | 1,653 |
Supplementary Operating and Financial Data (Unaudited)
Quarter | Nine Months Ended September 30, | |||||||||||
(in thousands) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | |||
Accounts, end of period | ||||||||||||
Total postpaid accounts (1) (2) (3) (4) (5) | 31,099 | 31,502 | 33,979 | 34,240 | 34,439 | 34,700 | 34,974 | 33,979 | 34,974 | |||
In the second quarter of 2025, we acquired 85,000 postpaid accounts from Lumos.
In the third quarter of 2025, we acquired 633,000 postpaid accounts from Metronet and other acquisitions.
In the third quarter of 2025, we acquired 1,448,000 postpaid accounts through the UScellular acquisition, which includes the impact of certain base adjustments to align the policies of UScellular and T-Mobile.
In the first quarter of 2026, we recognized a base adjustment to decrease postpaid accounts by 18,000, primarily due to combining certain business accounts that have multiple billing account numbers.
In the second quarter of 2026, Metronet agreed to repurchase certain customer accounts, resulting in a base adjustment to decrease postpaid accounts by 16,000. These base adjustments had no impact on postpaid net account additions.
Quarter | Nine Months Ended September 30, | |||||||||||||||
(in thousands) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | |||||||
Net account additions | ||||||||||||||||
Postpaid net account additions | 205 | 318 | 396 | 261 | 217 | 277 | 274 | 919 | 768 | |||||||
Quarter | Nine Months Ended September 30, | |||||||||||||||
Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | ||||||||
Churn | ||||||||||||||||
Postpaid account churn | 0.94 % | 0.92 % | 0.97 % | 1.04 % | 1.04 % | 0.99 % | 1.09 % | 0.94 % | 1.04 % | |||||||
Quarter | Nine Months Ended September 30, | |||||||||||||||
Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | ||||||||
Operating measure | ||||||||||||||||
Postpaid ARPA | $ 146.22 | $ 149.87 | $ 149.44 | $ 150.17 | $ 151.93 | $ 152.91 | $ 155.73 | $ 148.54 | $ 153.53 | |||||||
Quarter | Nine Months Ended September 30, | |||||||||||||||
Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | ||||||||
Postpaid upgrade rate | ||||||||||||||||
Postpaid device upgrade rate 2.8 % 2.5 % 2.7 % 3.8 % 2.8 % 2.6 % 2.8 % 8.0 % 8.3 %
Quarter | Nine Months Ended September 30, | |||||||||||||||
(in millions) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | |||||||
Device financing - equipment installment plans | ||||||||||||||||
Gross EIP financed | $ 3,565 | $ 3,503 | $ 3,871 | $ 5,774 | $ 4,322 | $ 3,958 | $ 4,576 | $ 10,939 | $ 12,856 | |||||||
EIP billings | 3,551 | 3,553 | 3,766 | 4,066 | 4,167 | 4,132 | 4,303 | 10,870 | 12,602 | |||||||
EIP receivables, net Device financing - leased devices | 6,405 | 6,201 | 6,915 | 7,680 | 7,488 | 7,173 | 6,987 | 6,915 | 6,987 | |||||||
Lease revenues | $ 1 | $ 6 | $ 4 | $ 2 | $ 1 | $ - | $ - | $ 11 | $ 1 | |||||||
Leased device depreciation | 4 | 1 | - | - | - | - | - | 5 | - | |||||||
Supplementary Operating and Financial Data (continued) (Unaudited)
Quarter | Nine Months Ended September 30, | ||||||||
(in millions, except percentages) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 |
Financial measures | |||||||||
Service revenues | $16,925 | $17,438 | $18,241 | $18,702 | $18,831 | $18,983 | $19,375 | $52,604 | $57,189 |
Equipment revenues | $ 3,704 | $ 3,439 | $ 3,465 | $ 5,364 | $ 3,996 | $ 3,524 | $ 3,929 | $10,608 | $11,449 |
Lease revenues | 1 | 6 | 4 | 2 | 1 | - | - | 11 | 1 |
Equipment sales | $ 3,703 | $ 3,433 | $ 3,461 | $ 5,362 | $ 3,995 | $ 3,524 | $ 3,929 | $10,597 | $11,448 |
Total revenues | $20,886 | $21,132 | $21,957 | $24,334 | $23,107 | $22,791 | $23,584 | $63,975 | $69,482 |
Net income | $ 2,953 | $ 3,222 | $ 2,714 | $ 2,103 | $ 2,504 | $ 3,239 | $ 3,455 | $ 8,889 | $ 9,198 |
Net income margin | 17.4 % | 18.5 % | 14.9 % | 11.2 % | 13.3 % | 17.1 % | 17.8 % | 16.9 % | 16.1 % |
Adjusted EBITDA | $ 8,259 | $ 8,547 | $ 8,684 | $ 8,447 | $ 9,241 | $ 9,537 | $ 9,620 | $25,490 | $28,398 |
Adjusted EBITDA margin | 48.8 % | 49.0 % | 47.6 % | 45.2 % | 49.1 % | 50.2 % | 49.7 % | 48.5 % | 49.7 % |
Core Adjusted EBITDA | $ 8,258 | $ 8,541 | $ 8,680 | $ 8,445 | $ 9,240 | $ 9,537 | $ 9,620 | $25,479 | $28,397 |
Core Adjusted EBITDA margin | 48.8 % | 49.0 % | 47.6 % | 45.2 % | 49.1 % | 50.2 % | 49.7 % | 48.4 % | 49.7 % |
Cost of services, exclusive of depreciation and amortization | $ 2,602 | $ 2,717 | $ 2,873 | $ 3,305 | $ 3,339 | $ 2,978 | $ 3,007 | $ 8,192 | $ 9,324 |
UScellular merger-related costs | - | - | 7 | 24 | 344 | 44 | 22 | 7 | 410 |
Other Special Items | 20 | 28 | 55 | 250 | 101 | 69 | 46 | 103 | 216 |
Cost of services, exclusive of depreciation and amortization and Special Items | $ 2,582 | $ 2,689 | $ 2,811 | $ 3,031 | $ 2,894 | $ 2,865 | $ 2,939 | $ 8,082 | $ 8,698 |
Cost of equipment sales, exclusive of depreciation and amortization | $ 4,798 | $ 4,659 | $ 4,853 | $ 6,967 | $ 5,488 | $ 5,055 | $ 5,444 | $14,310 | $15,987 |
UScellular merger-related costs | - | - | 2 | 8 | 14 | 23 | 2 | 2 | 39 |
Other Special Items | - | - | - | - | 8 | - | - | - | 8 |
Cost of equipment sales, exclusive of depreciation and amortization and Special Items | $ 4,798 | $ 4,659 | $ 4,851 | $ 6,959 | $ 5,466 | $ 5,032 | $ 5,442 | $14,308 | $15,940 |
Selling, general and administrative $ 5,488 $ 5,397 $ 6,015 $ 6,570 $ 5,966 $ 5,834 $ 6,020 $16,900 $17,820
UScellular merger-related costs 14 33 64 111 48 115 105 111 268
Other Special Items 59 (51) 123 353 209 150 137 131 496
Selling, general and administrative, excluding
Special Items $ 5,415 $ 5,415 $ 5,828 $ 6,106 $ 5,709 $ 5,569 $ 5,778 $16,658 $17,056
Total bad debt expense and losses from sales of
receivables $ 345 $ 284 $ 354 $ 445 $ 446 $ 415 $ 452 $ 983 $ 1,313
Bad debt and losses from sales of receivables as a percentage of Total revenues | 1.7 % | 1.3 % | 1.6 % | 1.8 % | 1.9 % | 1.8 % | 1.9 % | 1.5 % | 1.9 % |
Cash purchases of property and equipment including capitalized interest | $ 2,451 | $ 2,396 | $ 2,639 | $ 2,469 | $ 2,623 | $ 2,703 | $ 2,270 | $ 7,486 | $ 7,596 |
Capitalized interest | 10 | 10 | 13 | 10 | 7 | 6 | 7 | 33 | 20 |
Net cash proceeds from securitization | $ (26) | $ (23) | $ (25) | $ (22) | $ (20) | $ (22) | $ (20) | $ (74) | $ (62) |
Net payments for Merger-related costs | $ 70 | $ 92 | $ 96 | $ 100 | $ 153 | $ 181 | $ 198 | $ 258 | $ 532 |
Supplementary Operating and Financial Data (Continued) (Unaudited)
Quarter | Nine Months Ended September 30, | |||||||||||||||
(in millions, except share and per share amounts) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | |||||||
Stockholder returns | ||||||||||||||||
Total repurchases | $ 2,470 | $ 2,469 | $ 2,470 | $ 2,460 | $ 4,901 | $ 2,156 | $ 2,415 | $ 7,409 | $ 9,472 | |||||||
Total shares repurchased | 10,091,227 | 10,148,791 | 10,204,072 | 11,919,136 | 23,329,925 | 11,420,845 | 13,621,695 | 30,444,090 | 48,372,465 | |||||||
Average purchase price per share | $ 244.77 | $ 243.32 | $ 242.01 | $ 206.38 | $ 210.07 | $ 188.76 | $ 177.31 | $ 243.36 | $ 195.81 | |||||||
Total dividends paid | $ 1,003 | $ 996 | $ 987 | $ 1,135 | $ 1,120 | $ 1,101 | $ 1,089 | $ 2,986 | $ 3,310 | |||||||
Dividends per share | $ 0.88 | $ 0.88 | $ 0.88 | $ 1.02 | $ 1.02 | $ 1.02 | $ 1.02 | $ 2.64 | $ 3.06 | |||||||
Total stockholder returns | $ 3,473 | $ 3,465 | $ 3,457 | $ 3,595 | $ 6,021 | $ 3,257 | $ 3,504 | $ 10,395 | $ 12,782 | |||||||
Cumulative total repurchases | $ 29,785 | $ 32,254 | $ 34,724 | $ 37,184 | $ 42,085 | $ 44,241 | $ 46,656 | $ 34,724 | $ 46,656 | |||||||
Cumulative shares repurchased | 183,754,602 | 193,903,393 | 204,107,465 | 216,026,601 | 239,356,526 | 250,777,371 | 264,399,066 | 204,107,465 | 264,399,066 | |||||||
Cumulative stockholder returns | $ 34,835 | $ 38,300 | $ 41,757 | $ 45,352 | $ 51,373 | $ 54,630 | $ 58,134 | $ 41,757 | $ 58,134 | |||||||
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (Unaudited)
This Investor Factbook includes non-GAAP financial measures, including Adjusted EBITDA, Core Adjusted EBITDA, Net Debt, Adjusted Free Cash Flow and Adjusted Free Cash Flow margin. The non-GAAP financial measures should be considered in addition to, but not as a substitute for, the information provided in accordance with GAAP. Reconciliations for the non-GAAP financial measures to the most directly comparable GAAP financial measures are provided below. T-Mobile is not able to forecast Net income on a forward-looking basis without unreasonable efforts due to the high variability and difficulty in predicting certain items that affect GAAP Net income, including, but not limited to, Special Items, Income tax expense and Interest expense.
Adjusted EBITDA and Core Adjusted EBITDA should not be used to predict Net income, as the difference between either of these measures and Net income is variable.
Adjusted EBITDA and Core Adjusted EBITDA are reconciled to Net income as follows:
Quarter | Nine Months Ended September 30, | ||||||||||||
(in millions, except percentages) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | ||||
Net income | $2,953 | $ 3,222 | $ 2,714 | $ 2,103 | $ 2,504 | $ 3,239 | $ 3,455 | $ 8,889 | $ 9,198 | ||||
Adjustments: | |||||||||||||
Interest expense, net | 916 | 922 | 924 | 1,012 | 1,031 | 1,055 | 1,031 | 2,762 | 3,117 | ||||
Other expense, net | 46 | 11 | 78 | 89 | 132 | 107 | 90 | 135 | 329 | ||||
Income tax expense | 885 | 1,058 | 814 | 532 | 830 | 1,089 | 1,085 | 2,757 | 3,004 | ||||
Operating income | 4,800 | 5,213 | 4,530 | 3,736 | 4,497 | 5,490 | 5,661 | 14,543 | 15,648 | ||||
Depreciation and amortization | 3,198 | 3,146 | 3,408 | 3,756 | 3,817 | 3,434 | 3,452 | 9,752 | 10,703 | ||||
Stock-based compensation (1) | 168 | 178 | 217 | 209 | 203 | 212 | 195 | 563 | 610 | ||||
UScellular merger-related costs | 14 | 33 | 73 | 143 | 406 | 182 | 129 | 120 | 717 | ||||
Network restructuring initiative costs (2) | - | - | - | 93 | 76 | 52 | 38 | - | 166 |
Legal-related expenses (recoveries), net (3) | 6 | (4) | 8 | 6 | 54 | 16 | 14 | 10 | 84 |
Impairment expense | - | - | 278 | - | - | - | - | 278 | - |
Other, net (4) | 73 | (19) | 170 | 504 | 188 | 151 | 131 | 224 | 470 |
Adjusted EBITDA | 8,259 | 8,547 | 8,684 | 8,447 | 9,241 | 9,537 | 9,620 | 25,490 | 28,398 |
Lease revenues | (1) | (6) | (4) | (2) | (1) | - | - | (11) | (1) |
Core Adjusted EBITDA | $8,258 | $ 8,541 | $ 8,680 | $ 8,445 | $ 9,240 | $ 9,537 | $ 9,620 | $25,479 | $28,397 |
Net income margin (Net income divided by Service revenues) | 17.4 % | 18.5 % | 14.9 % | 11.2 % | 13.3 % | 17.1 % | 17.8 % | 16.9 % | 16.1 % |
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) | 48.8 % | 49.0 % | 47.6 % | 45.2 % | 49.1 % | 50.2 % | 49.7 % | 48.5 % | 49.7 % |
Core Adjusted EBITDA margin (Core Adjusted
EBITDA divided by Service revenues) 48.8 % 49.0 % 47.6 % 45.2 % 49.1 % 50.2 % 49.7 % 48.4 % 49.7 %
Stock-based compensation includes payroll tax impacts and may not agree to stock-based compensation expense on the Condensed Consolidated Financial Statements.
In Q4 2025, we began implementing network restructuring initiatives as a result of recent technological advancements that enhanced our Customer-Driven Coverage insights. Network restructuring initiative costs consist of network decommissioning and contract termination costs related to the rationalization of our network and backhaul services and the elimination of duplicative costs.
Legal-related expenses (recoveries), net, consists of the settlement of certain litigation and compliance costs associated with the August 2021 cyberattack, net of insurance recoveries.
Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, not directly attributable to the UScellular acquisition, which are not reflective of T-Mobile's ongoing core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA. Other, net, for the three months ended March 31, 2026 and December 31, 2025, includes $141 million and $390 million, respectively, and $141 million for the nine months ended September 30, 2026, of severance and related costs associated with the 2025-2026 workforce transformation and reinvestment initiative. Additionally, Other, net, for the three months ended September 30, 2026 and June 30, 2026 , includes $50 million and $108 million, respectively, and $158 million for the nine months ended September 30, 2026, of costs associated with retail initiatives to close certain dealer- and corporate-owned stores in connection with our ongoing digital initiatives to simplify routine transactions, as well as enhance customer experiences by transitioning in part to large-format experience stores.
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures (continued) (Unaudited)
Net debt (excluding tower obligations) to the LTM Net income, LTM Adjusted EBITDA and LTM Core Adjusted EBITDA ratios are calculated as follows:
(in millions, except net debt ratios) | Mar 31, 2025 | Jun 30, 2025 | Sep 30, 2025 | Dec 31, 2025 | Mar 31, 2026 | Jun 30, 2026 | Sep 30, 2026 |
Short-term debt | $ 8,214 | $ 6,408 | $ 6,333 | $ 5,135 | $ 2,238 | $ 6,117 | $ 6,343 |
Short-term financing lease liabilities | 1,136 | 1,157 | 1,157 | 1,163 | 1,155 | 1,178 | 1,158 |
Long-term debt | 76,033 | 75,018 | 76,365 | 79,649 | 83,809 | 78,504 | 77,323 |
Long-term debt to affiliates | 1,497 | 1,497 | 1,498 | 1,498 | - | - | - |
Financing lease liabilities | 1,117 | 1,188 | 1,186 | 1,107 | 1,024 | 1,121 | 1,136 |
Total debt (excluding tower obligations) | $ 87,997 | $ 85,268 | $ 86,539 | $ 88,552 | $ 88,226 | $ 86,920 | $ 85,960 |
Less: Cash and cash equivalents | (12,003) | (10,259) | (3,310) | (5,598) | (3,520) | (2,825) | (5,620) |
Net debt (excluding tower obligations) | $ 75,994 | $ 75,009 | $ 83,229 | $ 82,954 | $ 84,706 | $ 84,095 | $ 80,340 |
Divided by: Last twelve months Net income | $ 11,918 | $ 12,215 | $ 11,870 | $ 10,992 | $ 10,543 | $ 10,560 | $ 11,301 |
Net debt (excluding tower obligations) to LTM Net income Ratio | 6.4 | 6.1 | 7.0 | 7.5 | 8.0 | 8.0 | 7.1 |
Divided by: Last twelve months Adjusted EBITDA | $ 32,471 | $ 32,965 | $ 33,406 | $ 33,937 | $ 34,919 | $ 35,909 | $ 36,845 |
Net debt (excluding tower obligations) to LTM Adjusted EBITDA Ratio | 2.3 | 2.3 | 2.5 | 2.4 | 2.4 | 2.3 | 2.2 |
Divided by: Last twelve months Core Adjusted EBITDA | $ 32,412 | $ 32,926 | $ 33,384 | $ 33,924 | $ 34,906 | $ 35,902 | $ 36,842 |
Net debt (excluding tower obligations) to LTM Core Adjusted EBITDA Ratio | 2.3 | 2.3 | 2.5 | 2.4 | 2.4 | 2.3 | 2.2 |
Adjusted Free Cash Flow and Adjusted Free Cash Flow margin are calculated as follows:
Quarter | Nine Months Ended September 30, | ||||||||||||||||
(in millions, except percentages) | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 | Q1 2026 | Q2 2026 | Q3 2026 | 2025 | 2026 | ||||||||
Net cash provided by operating activities | $ 6,847 | $ 6,992 | $ 7,457 | $ 6,654 | $ 7,222 | $ 7,500 | $ 7,341 | $21,296 | $22,063 | ||||||||
Cash purchases of property and equipment, including capitalized interest | (2,451) | (2,396) | (2,639) | (2,469) | (2,623) | (2,703) | (2,270) | (7,486) | (7,596) | ||||||||
Adjusted Free Cash Flow | $ 4,396 | $ 4,596 | $ 4,818 | $ 4,185 | $ 4,599 | $ 4,797 | $ 5,071 | $13,810 | $14,467 | ||||||||
Net cash provided by operating activities margin | 40.5 % | 40.1 % | 40.9 % | 35.6 % | 38.4 % | 39.5 % | 37.9 % | 40.5 % | 38.6 % | ||||||||
Adjusted Free Cash Flow margin | 26.0 % | 26.4 % | 26.4 % | 22.4 % | 24.4 % | 25.3 % | 26.2 % | 26.3 % | 25.3 % | ||||||||
Operating and financial measures are utilized by T-Mobile's management to evaluate its operating performance and, in certain cases, its ability to meet liquidity requirements. Although companies in the telecommunications industry may not define measures in precisely the same way, T-Mobile believes the measures facilitate key operating performance comparisons with other companies in the telecommunications industry to provide management, investors and analysts with useful information to assess and evaluate past performance and assist in forecasting future performance.
Account - Generally, a billing account that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, 5G broadband gateways, fiber connections, mobile internet devices, including tablets and hotspots, wearables, DIGITS or other connected devices, including SyncUP and IoT, where they generally pay after receiving service.
Account Churn - The number of accounts whose service was deactivated as a percentage of the average number of accounts during the specified period further divided by the number of months in the period. The number of accounts whose service was deactivated is calculated net of accounts that subsequently had their service restored within a certain period of time and excludes accounts who received service for less than a certain minimum period of time, account mergers and account migrations.
Postpaid Average Revenue Per Account ("ARPA") - Average monthly postpaid service revenue earned per account. Postpaid service revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period.
Service revenues - Postpaid, including handset insurance, prepaid, wholesale and other service revenues.
Cost of services - Costs directly attributable to providing wireless communications and broadband services, including direct switch and cell site costs, such as rent, network access and transport costs, utilities, maintenance, associated labor costs, long distance costs, regulatory program costs, roaming fees paid to other carriers and data content costs.
Cost of equipment sales - Costs of devices and accessories sold to customers and dealers, device costs to fulfill insurance and warranty claims, write-downs of inventory related to shrinkage and obsolescence, and shipping and handling costs.
Selling, general and administrative expenses - Costs not directly attributable to providing wireless communications and broadband services for the operation of sales, customer care and corporate activities. These include all commissions paid to dealers and retail employees for activations and upgrades, labor and facilities costs associated with retail sales force and administrative space, marketing and promotional costs, customer support and billing, bad debt expense and administrative support activities.
Net income margin - Net income divided by Service revenues.
Adjusted EBITDA and Core Adjusted EBITDA - Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and Special Items. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Core Adjusted EBITDA and Adjusted EBITDA are non-GAAP financial measures utilized by T-Mobile's management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole. T-Mobile historically used Adjusted EBITDA and T-Mobile currently uses Core Adjusted EBITDA internally as a measure to evaluate and compensate its personnel and management for their performance. T-Mobile uses Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate its operating performance in comparison to competitors. Management believes analysts and investors use Core Adjusted EBITDA and Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications and broadband services companies because they are indicative of T-Mobile's ongoing operating performance and trends by excluding the impact of Interest expense from financing, depreciation and amortization from capital investments, stock-based compensation and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company's device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Core Adjusted EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for Income from operations, Net income or any other measure of financial performance reported in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").
Special Items - Certain expenses, gains, and losses which are not reflective of our ongoing performance. Special Items include UScellular merger-related costs, network restructuring initiative costs (as discussed above), certain legal-related expenses and recoveries, Impairment expense, restructuring costs not directly attributable to the UScellular acquisition (including severance), and other non-core gains and losses.
Adjusted EBITDA margin and Core Adjusted EBITDA margin - Adjusted EBITDA margin is calculated as Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin is calculated as Core Adjusted EBITDA divided by Service revenues. Adjusted EBITDA margin and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by T-Mobile's management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole.
Net cash provided by operating activities margin - Net cash provided by operating activities margin is calculated as Net cash provided by operating activities divided by Service revenues.
Adjusted Free Cash Flow - Net cash provided by operating activities less cash payments for purchases of property and equipment, including capitalized interest. Adjusted Free Cash Flow is utilized by T-Mobile's management, investors, and analysts of our financial information to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
Adjusted Free Cash Flow margin - Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow margin is utilized by T-Mobile's management, investors, and analysts to evaluate the company's ability to convert service revenue efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
Net debt - Short-term debt, long-term debt (excluding tower obligations), and long-term debt to affiliates, short-term financing lease liabilities and financing lease liabilities, less cash and cash equivalents.
Net payments for merger-related costs include net cash payments for Sprint merger-related costs and UScellular merger-related costs.
UScellular merger-related costs to date include:
Integration costs to achieve efficiencies in network, retail, information technology and back office operations and migrate customers to the T-Mobile network and billing systems;
Restructuring costs, including contract terminations, severance and network decommissioning; and
Transaction costs, including legal and professional services related to the completion of the UScellular acquisition.
This communication includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including information concerning T-Mobile US, Inc.'s future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words "anticipate," "believe," "estimate," "expect," "intend," "may," "could" or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties and may cause actual results to differ materially from the forward-looking statements. Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity; cyberattacks, disruptions, data loss or other security breaches; our inability to adopt and deploy network technologies in a timely and effective manner; our inability to effectively execute our digital initiatives and drive customer and employee adoption of emerging technologies; our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture; system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems; the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use; the timing and effects of any pending and future acquisition, investment, joint venture, merger or divestiture involving us, including our inability to obtain any required regulatory approval necessary to consummate any such transactions or to achieve the expected benefits of such transactions; adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in oil prices, inflation or interest rates, tariffs and trade restrictions, supply chain disruptions, fluctuations in global currencies, immigration policies, and impacts of geopolitical instability, such as global conflict, wars and further escalations thereof; operational delays, higher procurement costs, such as memory chip cost impacts on smartphones, and operational costs, and increased regulatory and compliance complexities, for example, as a result of changes to trade policies, including higher tariffs, restrictions and other economic disincentives to trade; our inability to successfully deliver new products and services; any failure or inability of our third parties (including key suppliers) to provide products or services for the operation of our business; sociopolitical volatility and polarization and risks related to environmental, social and governance matters; our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms; changes in the credit market conditions, credit rating downgrades or an inability to access debt markets; our inability to maintain effective internal control over financial reporting; compliance with the current regulatory framework, including our national security obligations, and any changes in regulations or in the regulatory framework under which we operate; laws and regulations relating to the handling of privacy, data protection and artificial intelligence; unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings; difficulties in protecting our intellectual property rights or if we infringe on the intellectual property rights of others; our offering of regulated financial services products and exposure to a wide variety of state and federal regulations; new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations; our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked; our exclusive forum provision as provided in our Certificate of Incorporation; interests of Deutsche Telekom AG ("DT"), our controlling stockholder, which may differ from the interests of other stockholders; our current and future stockholder return programs may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value; future sales of our common stock by DT and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the Federal Communications Commission; and other risks as disclosed in our most recent annual report on Form 10-K, and subsequent Forms 10-Q and other filings with the Securities and Exchange Commission. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
About T-Mobile US, Inc.As the supercharged Un-carrier, T-Mobile US, Inc. (NASDAQ: TMUS) is powered by an award-winning nationwide 5G Advanced network that connects more people, in more places, than ever before. With T-Mobile's unique value proposition of best network, best value and best experiences, the Un-carrier is redefining connectivity and fueling competition while continuing to drive the next wave of innovation in wireless, broadband and beyond. Headquartered in Bellevue, Wash., T-Mobile provides services through its subsidiaries and operates its flagship brands, T-Mobile, Metro by T-Mobile and Mint Mobile. For more information, visit https://www.t-mobile.com.