10-QPeriod: Q3 FY2018

T-Mobile US, Inc. Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 30, 2018For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. reported a strong third quarter for 2018, demonstrating robust revenue growth and improved profitability. Total revenues increased by 8% year-over-year to $10.8 billion, driven by solid performance in both service and equipment revenues. The company added a significant number of net new customers, particularly in the branded postpaid segment, reflecting successful customer acquisition and retention strategies. Net income saw a substantial increase of 45% compared to the prior year quarter, reaching $795 million, supported by operational efficiencies and lower interest expenses. The company also highlighted progress on its proposed merger with Sprint, with regulatory filings advancing. Management expressed confidence in its growth trajectory and strategic initiatives aimed at expanding market share and enhancing customer value.

Financial Highlights

52 data points
Beta

Revenue

$10.84B

Net Income

$795.00M

7.3% Net Margin

EPS (Diluted)

$0.93

Total Assets

$70.18B

Cash & Equivalents

$329.00M

Free Cash Flow

-$448.00M

Financial Statements
Beta
Revenue$10.84B
SG&A Expenses$3.31B
Operating Expenses$9.40B
Operating Income$1.44B
Interest Expense$194.00M
Net Income$795.00M
EPS (Basic)$0.94
EPS (Diluted)$0.93
Shares Outstanding (Basic)847.09M
Shares Outstanding (Diluted)853.85M

Key Highlights

  • 1Total revenues grew by 8% year-over-year to $10.8 billion.
  • 2Service revenues increased by 6% to $8.1 billion, driven by customer base growth and success in new customer segments.
  • 3Equipment revenues saw a significant increase of 13% to $2.4 billion, boosted by higher average revenue per device and the adoption of new revenue standards.
  • 4Net income surged by 45% to $795 million, reflecting improved operational performance and reduced expenses.
  • 5Total branded customers grew by 8% year-over-year to 62.2 million.
  • 6Branded postpaid phone churn decreased by 21 basis points to 1.02%, indicating strong customer retention.
  • 7The company continued to advance its proposed merger with Sprint, with regulatory filings progressing.

Frequently Asked Questions

T-Mobile reported a total revenue of $10.8 billion for the third quarter of 2018, an increase of 8% compared to the same period in the prior year. This growth was driven by increases in both service revenues (up 6% to $8.1 billion) and equipment revenues (up 13% to $2.4 billion).

Profitability improved significantly. Operating income increased by 9% to $1.4 billion, and net income rose by 45% to $795 million year-over-year. This improvement was attributed to higher revenues, operational efficiencies, and lower interest and tax expenses.

The company reported progress on the proposed merger with Sprint, noting that regulatory filings had advanced and the merger was expected to close in the first half of 2019, subject to regulatory approvals and other customary closing conditions.

T-Mobile experienced strong customer growth, with total branded customers increasing by 8% year-over-year to 62.2 million. Branded postpaid phone customers grew by 9% to 36.2 million, and branded prepaid customers increased by 2% to 21.0 million. Churn rates, particularly for branded postpaid phone customers, also decreased, indicating improved customer retention.