10-QPeriod: Q3 FY2019

T-Mobile US, Inc. Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 28, 2019For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) reported its third-quarter 2019 financial results, showcasing robust service revenue growth and a significant increase in net income and operating cash flow. Total revenues increased by 2% year-over-year to $11.1 billion, driven by a strong 6% rise in service revenues to $8.6 billion, fueled by customer base expansion and the success of new rate plans. While equipment revenues saw a slight decrease of 9% to $2.2 billion due to lower device sales, the company's operational efficiency improved, leading to a 2% increase in operating income to $1.5 billion and a 9% rise in net income to $870 million. Financially, T-Mobile demonstrated improved liquidity, with net cash provided by operating activities nearly doubling to $1.7 billion for the quarter. The company also reported a substantial increase in Free Cash Flow, up 27% to $1.1 billion. The report also highlights the significant progress and ongoing regulatory considerations for the proposed merger with Sprint, expected to close in early 2020. Key financial and operational metrics indicate continued momentum, positioning T-Mobile for potential future growth, particularly in the burgeoning 5G landscape.

Financial Highlights

52 data points
Beta

Revenue

$11.06B

Net Income

$870.00M

7.9% Net Margin

EPS (Diluted)

$1.01

Total Assets

$86.11B

Cash & Equivalents

$1.65B

Free Cash Flow

$234.00M

Financial Statements
Beta
Revenue$11.06B
SG&A Expenses$3.50B
Operating Expenses$9.59B
Operating Income$1.47B
Interest Expense$184.00M
Net Income$870.00M
EPS (Basic)$1.02
EPS (Diluted)$1.01
Shares Outstanding (Basic)854.58M
Shares Outstanding (Diluted)862.69M

Key Highlights

  • 1Total revenues increased by 2% to $11.1 billion for the third quarter of 2019.
  • 2Service revenues grew by 6% to $8.6 billion, driven by an expanding customer base and successful new rate plans.
  • 3Operating income increased by 2% to $1.5 billion, while Net income rose by 9% to $870 million.
  • 4Net cash provided by operating activities significantly increased by 91% to $1.7 billion.
  • 5Free Cash Flow saw a strong increase of 27% to $1.1 billion.
  • 6The proposed merger with Sprint is now expected to close in early 2020, with regulatory approvals progressing.
  • 7Total customers grew by 9% year-over-year to 84.2 million, with branded postpaid customers showing strong growth.

Frequently Asked Questions

T-Mobile US reported a 2% increase in total revenues to $11.1 billion and a 6% increase in service revenues to $8.6 billion in Q3 2019 compared to Q3 2018. Operating income grew by 2% to $1.5 billion, and Net income increased by 9% to $870 million. Notably, net cash provided by operating activities surged by 91% to $1.7 billion, and Free Cash Flow increased by 27% to $1.1 billion.

The proposed merger with Sprint is progressing, with T-Mobile now expecting the transaction to close in early 2020. Regulatory approvals are advancing, including the FCC's approval. However, a lawsuit filed by state attorneys general is ongoing, and the company is also working to satisfy various government commitments, including divestitures.

T-Mobile experienced robust customer growth, with total customers increasing by 9% year-over-year to 84.2 million. Branded postpaid customers, a key growth area, increased by 11% to 45.7 million. Branded prepaid customers saw a slight decrease primarily due to an agreement to transfer certain prepaid products to an MVNO partner.

T-Mobile raised its 2019 capital expenditure guidance to $5.9-$6.0 billion (excluding capitalized interest) due to accelerated 600 MHz spectrum deployment and 5G groundwork. The company expects its current liquidity sources, including cash flow from operations and existing credit facilities, to be sufficient for its needs for the next 12 months, though the pending Sprint merger will introduce substantial new debt and financial commitments.