10-QPeriod: Q1 FY2015

T-Mobile US, Inc. Quarterly Report for Q1 Ended Mar 31, 2015

Filed April 28, 2015For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. reported a net loss of $63 million ($0.09 per diluted share) for the first quarter of 2015, a notable improvement from a net loss of $151 million ($0.19 per diluted share) in the same period last year. Total revenues increased by 13% year-over-year to $7.8 billion, driven by strong performance in branded postpaid and prepaid services, as well as robust equipment sales. The company continued its aggressive network modernization and expansion, investing heavily in LTE technology and spectrum acquisition, which is crucial for its future growth and competitive positioning. The company's "Un-carrier" strategy appears to be resonating with customers, as evidenced by the increase in branded postpaid service revenues and a slight improvement in branded postpaid phone churn. Despite the ongoing investments and the reported net loss, T-Mobile is focused on growing Adjusted EBITDA, which increased by 28% to $1.4 billion, reflecting improved operational efficiency and revenue growth. Investors should monitor the company's substantial capital expenditures and its ability to translate network investments into sustained profitable growth.

Financial Highlights

51 data points
Beta

Revenue

$7.78B

65.6% Gross Margin

Net Income

-$63.00M

-0.8% Net Margin

EPS (Diluted)

$-0.09

Total Assets

$56.56B

Cash & Equivalents

$3.03B

Free Cash Flow

-$493.00M

Financial Statements
Beta
Revenue$7.78B
Cost of Revenue$2.68B
Gross Profit$5.10B
SG&A Expenses$2.37B
Operating Expenses$7.66B
Operating Income$117.00M
Interest Expense$261.00M
Net Income-$63.00M
EPS (Basic)$-0.09
EPS (Diluted)$-0.09
Shares Outstanding (Basic)808.61M
Shares Outstanding (Diluted)808.61M

Key Highlights

  • 1Total revenues increased 13% to $7.8 billion in Q1 2015, driven by strong postpaid, prepaid, and equipment sales.
  • 2Net loss improved significantly to $63 million from $151 million in Q1 2014.
  • 3Adjusted EBITDA grew 28% to $1.4 billion, indicating improved operational profitability.
  • 4Significant investment in network modernization and spectrum acquisition, with $1.0 billion in property and equipment capital expenditures and $1.4 billion for AWS spectrum licenses in Q1 2015.
  • 5Branded postpaid phone churn improved to 1.30% from 1.47% year-over-year.
  • 6Total customers grew to 56.8 million, up 15% year-over-year, signaling continued market traction.

Frequently Asked Questions

T-Mobile US, Inc. reported a net loss of $63 million for the first quarter of 2015, which is an improvement compared to a net loss of $151 million in the same period of 2014. On a diluted basis, the loss per share was $0.09 in Q1 2015, compared to $0.19 in Q1 2014. The company also reported an increase in Adjusted EBITDA to $1.4 billion, a 28% year-over-year increase.

Total revenues for the first quarter of 2015 increased by 13% to $7.8 billion, up from $6.9 billion in the first quarter of 2014. This growth was primarily driven by a 9% increase in total service revenues to $5.8 billion, bolstered by strong branded postpaid and prepaid revenues, and a significant 28% increase in equipment sales to $1.85 billion.

T-Mobile continues to heavily invest in its network infrastructure and spectrum acquisition. In the first quarter of 2015, the company spent $1.0 billion on property and equipment, largely for network modernization and LTE deployment. Additionally, T-Mobile paid $1.4 billion for AWS spectrum licenses to further enhance its nationwide broadband spectrum portfolio, with an expectation to cover 300 million people with LTE by the end of 2015.

The 'Un-carrier' strategy continues to drive customer growth and retention. Total customers reached 56.8 million by the end of Q1 2015, a 15% increase year-over-year. Branded postpaid service revenues grew 9%, and branded postpaid phone churn improved to 1.30% from 1.47% year-over-year, indicating successful customer acquisition and loyalty initiatives. The company also saw an increase in branded postpaid customers per account, suggesting customers are taking advantage of family plans.