10-QPeriod: Q3 FY2021

T-Mobile US, Inc. Quarterly Report for Q3 Ended Sep 30, 2021

Filed November 2, 2021For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) reported its third-quarter 2021 financial results, showcasing continued growth in total revenues and a significant increase in net cash provided by operating activities. Total revenues rose by 2% year-over-year to $19.6 billion for the quarter, driven by strong performance in postpaid and prepaid services. The company added a net of 1.3 million customers in the third quarter, bringing the total customer base to over 106 million. The integration of Sprint appears to be progressing, as indicated by the increased scale of operations and the company's focus on realizing synergies. Despite a decrease in net income for the quarter driven by higher merger-related costs and a slight increase in operating expenses, the company's operational execution remains robust. The acquisition of Shentel's wireless assets was completed in July 2021, further expanding T-Mobile's network footprint. Management highlighted strong free cash flow generation and a solid liquidity position, supported by significant debt issuance and management. Investors should monitor the ongoing integration efforts, competitive landscape, and the impact of the recent cybersecurity incident.

Financial Highlights

53 data points
Beta

Revenue

$19.62B

Net Income

$691.00M

3.5% Net Margin

EPS (Diluted)

$0.55

Total Assets

$202.13B

Cash & Equivalents

$4.14B

Free Cash Flow

$533.00M

Financial Statements
Beta
Revenue$19.62B
SG&A Expenses$5.21B
Operating Expenses$18.04B
Operating Income$1.58B
Interest Expense$780.00M
Net Income$691.00M
EPS (Basic)$0.55
EPS (Diluted)$0.55
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.25B

Key Highlights

  • 1Total revenues increased by 2% year-over-year to $19.6 billion for the third quarter of 2021.
  • 2The company added a net of 1.3 million customers in Q3 2021, reaching a total of 106.9 million customers.
  • 3Net income decreased by 45% to $691 million in Q3 2021, primarily due to higher merger-related costs and increased operating expenses.
  • 4Net cash provided by operating activities saw a significant increase of 25% to $3.5 billion in Q3 2021.
  • 5T-Mobile completed the acquisition of Shentel's wireless assets on July 1, 2021, for approximately $1.9 billion.
  • 6The company issued $11.8 billion in long-term debt during the first nine months of 2021, while also repaying $10.1 billion in debt.
  • 7A significant cybersecurity incident was disclosed in August 2021, impacting millions of customer records; the company is incurring costs for investigation, remediation, and customer support.

Frequently Asked Questions

T-Mobile US, Inc. reported total revenues of $19.6 billion for the third quarter of 2021, representing a 2% increase compared to $19.3 billion in the same period of 2020. This growth was primarily driven by an increase in postpaid revenues, which rose by 6% to $10.8 billion, and a 4% increase in prepaid revenues to $2.5 billion.

T-Mobile added a net of 1.3 million customers during the third quarter of 2021. This brought the total customer base to 106.9 million, an increase of 7% year-over-year. The growth was primarily driven by increases in postpaid phone customers and postpaid other customers.

T-Mobile disclosed a significant cybersecurity incident in August 2021 affecting millions of current, former, and prospective customers' data. The company has incurred expenses related to investigation, remediation, customer notification, and enhanced security measures. While the full financial impact is still being assessed, the company expects to continue incurring additional costs in future periods. Lawsuits and regulatory inquiries related to the incident are ongoing, and the potential financial impact could be material.

T-Mobile demonstrated active debt management in the first nine months of 2021, issuing $11.8 billion in long-term debt and repaying $10.1 billion. The company's liquidity remains strong, with $4.1 billion in cash and cash equivalents as of September 30, 2021, and an undrawn revolving credit facility. Free cash flow, excluding specific items, showed significant improvement, indicating robust cash generation capabilities.