TMUS · Q4 2025 Earnings

Bullish

T-Mobile US

Reported February 11, 2026

30-second summary

T-Mobile closed FY2025 with $24.3B Q4 revenue (+11.3% YoY), $4.19B Q4 FCF, and a Q4 Core Adjusted EBITDA print of $8.45B that lands FY2025 at $33.95B — at the high end of the $33.7–33.9B raised guide. The real news is FY2026: Core Adjusted EBITDA guided to $37.0–37.5B (+$3.45B at midpoint vs. FY25 actual), Adjusted FCF $18.0–18.7B, and a postpaid net account additions guide of 900K–1.0M that reflects management's shift to account-level reporting — not a volume collapse, since the prior 7.2–7.4M was a postpaid lines number. Sievert's pre-committed 2026 guide raise arrived materially above the prior CMD framework, and the bull case is now structurally underwritten by FWA scaling to 15M by 2030 plus fiber to 3–4M.

Headline numbers

EPS

Q4 FY2025

$1.88

Revenue

Q4 FY2025

$24.33B

+11.3% YoY

Free cash flow

Q4 FY2025

$4.18B

Operating margin

Q4 FY2025

15.4%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$24.33B	+11.3%	$21.96B	+10.8%
EPS	$1.88	—	$2.41	-22.0%
Operating margin	15.4%	—	20.6%	-520bps
Free cash flow	$4.18B	—	$4.82B	-13.1%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

New guidance

Metric	Period	Guide	YoY
Postpaid Net Account Additions	FY 2026	900 thousand to 1.0 million	—
Effective Tax Rate	FY 2026	25% to 26%	—
Net Cash Provided by Operating Activities	FY 2026	$28.0 to $28.7 billion	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Core Adjusted EBITDA	FY 2025	$33.7 to $33.9 billion	$37.0 to $37.5 billion	+$3.1 to $3.8 billion (midpoint +$3.45B)	Raised
Adjusted Free Cash Flow	FY 2025	$17.8 to $18.0 billion	$18.0 to $18.7 billion	+$0.2 to $0.7 billion (midpoint +$0.45B)	Raised
Effective Tax Rate	FY 2025	23% to 24%	25% to 26%	+100 to 200 basis points	Raised
Net Cash Provided by Operating Activities	FY 2025	$27.8 to $28.0 billion	$28.0 to $28.7 billion	+$0.2 to $0.7 billion (midpoint +$0.45B)	Raised
Postpaid Net Account Additions	FY 2025	7.2 to 7.4 million	Withdrawn — no replacement	—	Withdrawn
Postpaid Phone Net Additions	FY 2025	3.3 million	Withdrawn — no replacement	—	Withdrawn
Fiber Customer Net Additions	FY 2025	approximately 130,000	Withdrawn — no replacement	—	Withdrawn
Postpaid ARPA Growth (including dilution)	FY 2025	at least 3.5%	Withdrawn — no replacement	—	Withdrawn
Postpaid ARPA Growth (organic, excluding acquisitions)	FY 2025	approximately 4%	Withdrawn — no replacement	—	Withdrawn

Reaffirmed unchanged this quarter: Capital Expenditures (~$10.0 billion)

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Postpaid Service Revenues	$15.378B	+13.9%
Equipment Revenues	$5.364B	+14.2%
Prepaid Service Revenues	$2.586B	-3.8%
Wholesale and Other Service Revenues	$0.738B	—

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Postpaid Phone Net Customer Additions (thousands)	962
Postpaid Other Net Customer Additions (thousands)	1,420
Total Postpaid Net Account Additions (thousands)	261
Postpaid ARPA	$150.17
Postpaid Phone ARPU	$50.71
Postpaid Phone Churn	1.02%

Profitability

Q4 FY2025

Segment	Q4 FY2025
Core Adjusted EBITDA	$8,445M
Core Adjusted EBITDA Margin	45.2%

Management tone

Steady execution → Network defense → Offensive repositioning → Capacity expansion

Network leadership has crossed from claim to validated fact. A year ago T-Mobile was framing network parity as an aspiration; in Q3 management quantified the 70M-customer addressable prize; this quarter the J.D. Power validation arrived. From the call: "Historically, through the storied history of the un-carrier, the one thing we didn't have was best network. Over the last five years, we have quietly built the best network…J.D. Power. After 35 reports over 17 years, the erstwhile number one network has been unseated." The shift from "we will compete on network" to "we have unseated Verizon per J.D. Power" turns the network-seeker TAM from a thesis into an underwriting input for FY26 and beyond.

FWA has progressed from experimental adjacency to durable scaled business with a defined 2030 endpoint. In Q2 2025, FWA was discussed alongside fiber as a combined 40–45M-homes-equivalent footprint. In Q3, the fiber net-add target was raised 30% as fiber commercialized. This quarter Srini upgraded the 2028 target of 12M FWA customers to 15M by 2030, layered fiber at 3–4M on top, and explicitly closed the "is this temporary?" debate: "the days of asking the question of, you know, is this a temporary category? Is this here to stay? Those are gone." Combined broadband target of 18–19M by 2030 is now in the underwriting case.

Efficiency has been reframed from cost-cutting to experience-led digitalization. Telecom restructurings historically lead with headcount; T-Mobile is explicitly disowning that frame. From the call: "This has not been a slash and burn, let's take out X thousand people. This has been, how do we go after the experience? How do we make that experience a win-win, where consumers enjoy it, where they naturally move towards this, while at the same time making us significantly more efficient as a business?" This matters for FY26 modeling — the EBITDA step-up isn't from layoffs that hit a one-time benefit; it's from a digital operating model that compounds.

The reporting framework shift is itself a signal of confidence. Dropping postpaid phone subscriber metrics and replacing them with account-level metrics is something an operator does when they no longer feel they have to defend the line-count narrative. Sievert: "90% of postpaid lines belong to multi-line accounts." The change reframes T-Mobile as a household-relationships business rather than a SIM-card business — which is the right framing when bundling FWA, fiber, and satellite into multi-product accounts is the bull case.

Tone is now openly inflectionary and asking the buy-side to underwrite 6G and edge AI. The "best lies ahead" framing — paired with explicit mentions that spectrum acquisition, 6G spectral efficiency gains, AI RAN, edge compute, T-Ads, and T-Mobile Visa are NOT in the FY26 guide — positions current guidance as a floor with multiple uncapped optionality vectors. Management is conservatively guiding what's modeled and signaling that everything else is upside.

Recurring themes management leaned on this quarter:

Best network differentiation now proven and wideningNetwork seeker segment unlocks massive consumer wireless growthFWA broadband scaling to 15M customers by 2030 with runway beyondAI and digitalization for customer experience efficiencyPostpaid account and ARPA growth as core value drivers6G and physical/edge AI as new growth frontiers

Risks management surfaced:

Spectrum acquisition and 6G spectral efficiency gains not yet reflected in guidanceCompetitive industry practices around phone promotions could undermine value economicsU.S. Cellular integration timeline acceleration execution riskLegacy pricing plan optimization could face customer resistanceFiber partnership capital intensity and deployment execution

Q&A highlights

Greg Williams · TD Cowen

Updated appetite for additional spectrum acquisitions given $22B M&A flexibility envelope and spectrum coming to market.

Build-vs-buy analysis is standard approach. Disciplined on valuation; walked away from Echo Star spectrum. Three criteria: (1) build vs. buy economics, (2) consistency with existing spectrum holdings, (3) commitment to spectrum leadership. New spectrum supply from legislation will support valuations. Open to acquisitions at right price but not at gun-to-head pricing.

Build-vs-buy analysis standard approach to spectrum decisionsWalked away from Echo Star as too expensiveNew spectrum legislation will improve valuationsDisciplined on valuation; won't overpay for spectrum

Answers to last quarter's watch list

The withdrawn FY service revenue growth guide. Resolved — and the withdrawal looks benign in hindsight. Postpaid service revenue grew +13.9% YoY in Q4 (after +12% in Q3, +9.2% in Q2), so the underlying number ran materially above the prior "at least 6%" floor. T-Mobile didn't restore the metric; it instead retired the entire postpaid-line reporting framework in favor of account/ARPA disclosure. The silent withdrawal was metric-redefinition, not a covered cut.

Resolved positively

2026 and 2027 guide raises Sievert pre-committed to on the year-end call. The FY26 Core Adjusted EBITDA guide of $37.0–37.5B is +$3.45B above FY25 actual at midpoint — ~9.6% YoY growth and materially above the prior CMD framework's implied trajectory. The pre-commit was delivered. 2027 guidance was not formally restated in the press release but the qualitative commentary on FWA 15M-by-2030, fiber 3–4M, and 6G/AI optionality reinforces step-up.

Resolved positively

Q4 Core Adj. EBITDA in the $7.4–7.6B implied range. Q4 came in at $8.45B — ~$850M above the implied top of that range, taking FY25 to $33.95B at the high end of the raised $33.7–33.9B guide. The Q3 raise was conservative, exactly as the watch list framed.

Resolved positively

Postpaid phone churn vs. the 0.89% Q3 level. Q4 churn printed 1.02%, up 13bps from Q3 and above the 0.90% Q2 level. Some of this is seasonal Q4 holiday switching, but it sits at the high end of the 12-month band and warrants a fresh watch in Q1 2026. Going forward T-Mobile will report account-level churn, so the line-level series is itself being retired — limiting comparability.

Resolved negatively

Organic ARPA growth pace at the ~4% disclosure level. ARPA stepped up sequentially to $150.17 from $149.44 in Q3, but management did not refresh the organic-vs-headline cut, and the FY26 guide reframes the path as "2.5–3% PAR growth with 1–1.5% underlying ARPU" per Q&A. The structural pricing-power thesis is intact but the framing has shifted from "organic ARPA ~4%" to a tiered account-level decomposition.

Continue monitoring

What to watch into next quarter

Q1 2026 postpaid phone churn vs. the 1.02% Q4 print. With device-promotion intensity rising and the metric itself being retired mid-year, the Q1 line-level churn print is the last clean read on whether rate-plan optimization fully cleared or whether the Q4 uptick was structural.

FY26 Core Adjusted EBITDA quarterly cadence vs. the $37.0–37.5B guide. Q1 print and any management color on the in-quarter quarterly EBITDA pace will signal whether the FY26 guide carries the same conservatism as the Q3 FY25 framework — and whether a mid-year raise is on the table.

Account-level churn baseline disclosure in Q1. The new metric will set the bar; management has not pre-disclosed it. Worth watching what range T-Mobile establishes and how it characterizes account churn vs. competitors' equivalent metrics.

FY26 Adjusted FCF $18.0–18.7B against the +100–200bps tax-rate headwind. The flat-to-+4% YoY FCF range is the weakest component of the FY26 guide; watch whether 1H delivery comes in at the high end (implying tax-rate conservatism) or low end (implying capex/working-capital drag).

Any FY26 service revenue growth disclosure or implied figure in the 10-K. Postpaid service revenue grew 13.9% in Q4; if the 10-K or analyst day discloses an FY26 service revenue implied number, watch whether it sustains double-digit or decelerates toward the "core 6%/5%" framing Walt's Q&A surfaced.

Sources

T-Mobile US Q4 2025 / FY 2025 press release / Form 8-K Exhibit 99.2 — https://www.sec.gov/Archives/edgar/data/1283699/000128369926000007/tmus12312025ex992.htm
T-Mobile US Q4 2025 earnings call commentary (management prepared remarks and Q&A as captured in extraction).

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