10-QPeriod: Q3 FY2022

T-Mobile US, Inc. Quarterly Report for Q3 Ended Sep 30, 2022

Filed October 27, 2022For Securities:TMUSTMUSZTMUSITMUSL

Summary

T-Mobile US, Inc. (TMUS) reported its third-quarter 2022 financial results, showcasing continued revenue growth in its core postpaid segment, which increased by 7% year-over-year to $11.55 billion. While total revenues saw a slight sequential dip, the company demonstrated resilience with a 4% increase in total service revenues year-to-date. This growth was supported by an increase in total customers by 5% to 111.7 million, driven by strong postpaid net additions across phone and other services, including a significant expansion in High Speed Internet offerings. The company also reported a substantial increase in net cash provided by operating activities, up 26% year-over-year for the quarter, contributing to a healthy Free Cash Flow of $2.07 billion, up 32% year-over-year. However, the quarter was marked by significant one-time charges, including a $1.1 billion loss on the sale of its Wireline Business and a $477 million impairment charge related to Wireline assets. These items, along with substantial merger-related costs, impacted net income, which decreased by 26% year-over-year to $508 million for the quarter. Despite these charges, the company's strategic focus on its 5G network build-out and customer acquisition remains evident, supported by strong operational metrics and a reaffirmed commitment to growth.

Financial Highlights

51 data points
Beta

Revenue

$19.48B

Net Income

$508.00M

2.6% Net Margin

EPS (Diluted)

$0.40

Total Assets

$213.50B

Cash & Equivalents

$6.89B

Free Cash Flow

$757.00M

Financial Statements
Beta
Revenue$19.48B
SG&A Expenses$5.12B
Operating Expenses$18.20B
Operating Income$1.28B
Net Income$508.00M
EPS (Basic)$0.40
EPS (Diluted)$0.40
Shares Outstanding (Basic)1.25B
Shares Outstanding (Diluted)1.26B

Key Highlights

  • 1Total service revenues increased by 4% to $15.36 billion for the three months ended September 30, 2022, driven by a 7% increase in postpaid revenues.
  • 2Total customers grew by 5% to 111.7 million, with total postpaid customers increasing by 5% to 90.4 million.
  • 3Net cash provided by operating activities increased by 26% to $4.39 billion for the three months ended September 30, 2022.
  • 4Free Cash Flow increased by 32% to $2.07 billion for the three months ended September 30, 2022.
  • 5The company recognized a $1.1 billion pre-tax loss on the disposal of its Wireline Business.
  • 6Depreciation and amortization decreased by 20% to $3.31 billion for the three months ended September 30, 2022, partly due to network rationalization.
  • 7T-Mobile announced a new $14.0 billion stock repurchase program authorized in September 2022.

Frequently Asked Questions

T-Mobile's net income for the third quarter of 2022 was $508 million, a decrease of 26% compared to $691 million in the same period last year. This decrease was primarily influenced by a significant $1.1 billion pre-tax loss on the disposal of its Wireline Business and a $477 million impairment charge related to Wireline assets. Additionally, merger-related costs and higher bad debt expense contributed to the reduced net income.

T-Mobile saw robust customer growth in the third quarter of 2022. Total customers increased by 5% year-over-year to 111.7 million. Total postpaid customers grew by 5% to 90.4 million, driven by strong net additions in both postpaid phone and other categories, including a significant increase in High Speed Internet customers.

The company demonstrated strong cash flow generation, with net cash provided by operating activities increasing by 26% to $4.39 billion and Free Cash Flow increasing by 32% to $2.07 billion for the third quarter of 2022. As of September 30, 2022, T-Mobile's total debt and financing lease liabilities were $76.6 billion. The company also has a revolving credit facility with an aggregate commitment amount of $7.5 billion, of which no balance was outstanding at the end of the quarter. T-Mobile also announced a new $14.0 billion stock repurchase program.

The most significant one-time items impacting the third quarter of 2022 results were a $1.1 billion pre-tax loss recognized from the agreement to sell the Wireline Business and a $477 million non-cash impairment expense on certain Wireline long-lived assets. Merger-related costs also continued to impact operating expenses.