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    TMUS
    Earnings call· Jun 2026(Q2 FY26)

    T-Mobile US, Inc. TMUS

    Jul 23, 2026 Source

    Executive summary

    T-Mobile Q2 FY26 — Record NPS and Strong Financial Growth

    T-Mobile delivered strong Q2 FY26 results, driven by network superiority, leading to record NPS and robust customer acquisition. The company continues to balance volume and value, with significant ARPA growth and increased free cash flow guidance. Strategic investments in network and spectrum opportunities are prioritized, while managing expected temporary churn from rate plan modernization.

    Highlights

    7

    • Achieved a record high NPS of 46, the highest in wireless ever across the big 3 carriers.

    • Delivered postpaid net account additions of 277,000 in Q2.

    • Reported postpaid ARPA growth of 2% year-over-year, or 3.7% excluding M&A impacts.

    • Grew postpaid service revenue by 13% and total service revenue by 9%.

    • Increased core adjusted EBITDA by 12% year-over-year.

    • Raised adjusted free cash flow guidance by $200 million at the midpoint to $18.4 billion-$18.8 billion.

    • Repurchased an incremental $2.5 billion in shares during Q2 and through July 17.

    Concerns

    3

    • Anticipate Q3 rate plan modernization to result in temporary elevated account churn and lower postpaid net account additions of approximately 250,000.

    • Memory price increases are leading to higher smartphone prices, with T-Mobile not increasing subsidy levels, requiring customers to pay more.

    • Prepaid revenue is experiencing minimal trends, reflecting declines in subscribers and ARPA, though partially offset by migrations to postpaid.

    Guidance & targets

    9
    CategoryTargetConfidence
    Full-year postpaid account net additions
    950,000 and 1,050,000
    high materiality
    High
    Q3 postpaid net account additions
    approximately 250,000
    medium materiality
    Medium
    Full-year service revenues
    approximately $77 billion
    high materiality
    High
    Q3 service revenues
    approximately $19.3 billion or up 6% year-over-year
    medium materiality
    High
    Full-year postpaid ARPA growth
    between 2.5% and 3%
    high materiality
    High
    Full-year core adjusted EBITDA
    between $37.1 billion and $37.5 billion
    high materiality
    High
    Q3 core adjusted EBITDA
    approximately $9.4 billion or up 8% year-over-year
    medium materiality
    High
    Full-year 2026 cash CapEx
    approximately $10 billion
    high materiality
    High
    Adjusted free cash flow
    between $18.4 billion and $18.8 billion
    high materiality
    High

    Operational metrics

    11
    NPS
    46record high
    Q2 FY26

    Highest NPS in wireless ever across the big 3 carriers.

    Customer Lifetime Value (CLV) growth
    healthy double digitsover last year
    Q2 FY26

    CLVs in Q2 up healthy double digits over last year.

    Port-in ARPA vs. Port-out ARPA ratio
    20%higher
    Q2 FY26

    Port-in ARPAs continued to exceed port-out ARPAs by approximately 20%.

    Premium plan adoption on new accounts
    over 60%
    Q2 FY26

    Over 60% of customers on new accounts selecting our premium plans.

    T-Life monthly active users
    over 30 million
    Q2 FY26

    Ended the quarter with over 30 million monthly active users.

    Free cash flow margin
    25%industry-leading
    Q2 FY26

    Industry-leading free cash flow margin of 25%.

    Postpaid ARPA growth (ex M&A)
    3.7%
    YoY

    Postpaid ARPA actually grew 3.7% on a year-over-year basis ex M&A.

    Broadband net adds
    upper 400,000 rangeyet again
    Q2 FY26

    Total broadband right in the upper 400,000 range yet again.

    Broadband customers with mobile bundle
    closer to 70%
    Q2 FY26

    Approximately 70% of our broadband customers also have mobile within the bundle.

    Fiber JV penetration
    close to 20%
    first 12 months

    Getting to close to 20% penetration over the first 12 months of deploying fiber in each area.

    Satellite network usage
    0.0003%up from 0.0002%
    busiest summer months

    In our busiest summer months, satellite usage went to 0.0003% of our network usage.

    Industry KPIs

    10
    MetricValueDetails
    Postpaid arpa vs ARPU2% ARPA growth year-over-year%
    Free cash flow FCF guidance$18.4 billion to $18.8 billionUSD
    Service revenue growth rate9%%
    Postpaid switching win sharegrew postpaid share of households
    Fiber jv cost synergy programsclose to 20%%
    Postpaid net account additions277,000net adds
    Share buyback capital returned$2.5 billionUSD
    Postpaid phone vs account churn0.85%
    Spectrum position network benchmarks46NPS
    Fwa subscriber base and capacity modelupper 400,000 rangenet adds

    Product announcements

    1
    ProductTypeDetails
    Live translation on betalaunch

    Deals & partnerships

    4
    UScellularAcquisition to expand T-Mobile's presence in smaller markets and rural areas.

    T-Mobile's acquisition of UScellular last year is supercharging its opportunity in smaller markets and rural areas, where it has significant room to grow its household share.

    Capital OneCo-branded Visa credit card launch.

    The T-Mobile Visa credit card launch was one of Capital One's most successful co-branded launches and is on track to rank among its leading co-brand programs in terms of new accounts.

    Figure AIPartnership for physical AI and edge inferencing.

    T-Mobile continues to partner with key industry leaders, including Figure AI, to explore opportunities in physical AI with inferencing at the edge.

    StarlinkJoint venture for direct-to-device (D2D) satellite along with cellular service.

    Conversations for the direct-to-device joint venture are progressing rapidly towards a long-form agreement, with an update expected shortly. The JV aims to pool spectrum to enhance customer experience, making satellite a complementary service to cellular.

    Risks & headwinds

    3
    Temporary elevated account churn due to rate plan modernizationQ3 FY26

    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.

    Mitigation: This modernization creates strong value for customers and T-Mobile, setting up for 2027 guidance ambitions. The impact to postpaid phone churn is lower as it's concentrated in accounts with fewer lines.

    Increased smartphone prices due to memory price increasesH2 FY26

    Memory price increases are resulting in higher prices for smartphones across the board.

    Mitigation: T-Mobile does not intend to increase its subsidy levels, meaning customers will have to pay more. The company focuses on broadening its value proposition beyond just free phones.

    Prepaid revenue declineFull year FY26

    Minimal trends in prepaid service revenue decline.

    Mitigation: The company sees a healthy migration of higher, more premium prepaid customers to postpaid brands, leading to higher CLVs and overall value accretion. There is also an opportunity to cultivate and grow the prepaid segment.

    What to watch in Q3 FY26

    4

    Postpaid net account additions

    Q3 FY26
    Currentalmost 500,000 (H1 FY26)
    Targetapproximately 250,000 (Q3 FY26)

    Why it matters

    To assess the actual impact of rate plan modernization on churn and net adds, and progress towards the full-year guidance range.

    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.

    Q&A highlights

    6

    How does T-Mobile balance volume and price growth, and what's the competitive environment like?

    Management emphasizes maximizing Customer Lifetime Value (CLV) through a careful balance of volume and value. Network superiority attracts network seekers, leading to higher ARPA from port-ins (20% higher than port-outs) and double-digit CLV growth. Underlying postpaid ARPA grew 3.7% year-over-year excluding M&A.

    “It's a careful titration of where we want to maximize volume versus where we want to maximize value, all brought together with CLV.”

    asked by Sean Diffley · answered by Srinivasan Gopalan

    2 min read6 chapters

    Detailed Narrative

    01

    Network Superiority & Customer Experience

    T-Mobile achieved a record-high NPS of 46 in Q2, the highest ever among major wireless carriers, underscoring its differentiation. The company's 5G Advanced network continues to win accolades from third-party providers like Ookla and Opensignal, sweeping subcategories for Quality of Experience and Network Performance. T-Mobile is also investing in network-native AI applications, such as live translation beta, aiming for inferencing at the edge to leverage its low-latency, high-capacity network.

    02

    Strategic Customer Acquisition & Value

    The company continues to attract 'network seekers,' with postpaid net account additions of 277,000 in Q2. This growth is driven by a strong value proposition, evidenced by port-in ARPAs being approximately 20% higher than port-out ARPAs and over 60% of new accounts selecting premium plans. T-Mobile maintains its 'more-for-more' philosophy, modernizing legacy rate plans to ensure customers benefit from the 5G network and achieving double-digit CLV growth year-over-year.

    03

    Broadband Leadership & Capacity Model

    T-Mobile's 5G broadband is positioned as a premium offering, delivering fiber-like speeds over WiFi and leading the industry in customer satisfaction, including winning J.D. Power's #1. The company operates under a robust 'fallow capacity model,' which forecasts traffic growth at a hexbin level and caps market share, ensuring ample capacity. Upcoming spectrum availability in 2027 and 2028 is expected to unlock even greater capacity, further strengthening the 5G broadband offering.

    04

    Capital Allocation & Future Spectrum Opportunities

    T-Mobile is thoughtfully managing its capital envelope to prepare for upcoming spectrum opportunities in 2027 and 2028, including C-band 2.0 and 2.7 gigahertz. The company views these as critical moments to further cement its network leadership position and drive differentiation. This strategic focus aims to unlock increased 5G broadband capacity and create long-term value for shareholders, applying a diligent capital allocation framework.

    05

    Prepaid to Postpaid Migration & Service Revenue Growth

    While prepaid revenue shows minimal trends, T-Mobile observes a healthy phenomenon of premium prepaid customers migrating to postpaid brands. This migration contributes to higher CLVs and overall value accretion for the company. This dynamic, combined with strong postpaid performance, underpins the company's total service revenue growth of 9%, demonstrating the effectiveness of its portfolio strategy.

    06

    Fiber JVs and Complementary Strategy

    T-Mobile's fiber joint ventures are performing well, achieving close to 20% penetration within the first 12 months of deployment in new areas. The company emphasizes that these customer additions are incremental, as they often start with zero customers in these markets. Fiber is considered complementary to FWA, as winning a fiber customer frees up fallow capacity in the mobile network, which can then be utilized for additional FWA sales in broader areas.

    AI-generated summary of the company’s earnings call. Not investment advice.