Telecommunications giant T-Mobile US (NASDAQ:TMUS) reported fourth-quarter and full-year 2024 earnings on Wednesday, Jan. 29, that topped analyst consensus estimates. Earnings per share (EPS) came in at $2.57, compared to the analyst estimate of $2.29, and were up 54% year over year. Revenue for the quarter reached $21.9 billion, exceeding the predicted $21.3 billion.
Overall, T-Mobile delivered a strong quarter, demonstrating robust operational performance and continued customer growth, represented by 1.93 million postpaid net customer additions for the quarter.
| Metric | Q4 2024 | Analysts' Estimate | Q4 2023 | Change (YOY) |
|---|---|---|---|---|
| Diluted EPS | $2.57 | $2.29 | $1.67 | 54.1% |
| Revenue | $21.9 billion | $21.3 billion | $20.5 billion | 6.8% |
| Net income | $2.98 billion | -- | $2.01 billion | 48% |
| Core adjusted EBITDA | $7.9 billion | -- | $7.2 billion | 10.1% |
| Postpaid net customer additions | 1.93 million | 1.74 million | 1.57 million | 19% |
Source: T-Mobile US. Note: Analyst consensus estimates for the quarter provided by FactSet. YOY = Year over year. EBITDA: Earnings before interest, taxes, depreciation, and amortization.
About T-Mobile US
T-Mobile is a major player in the U.S. telecommunications market, primarily focused on providing innovative wireless services. The company has consistently leveraged its extensive spectrum assets, which include low-band, mid-band, and millimeter-wave bands, to build what it claims is the largest 5G network in America. Known for its customer-friendly "Un-carrier" initiatives, T-Mobile positions itself as a disruptor in the industry by focusing on removing common customer pain points.
In recent years, T-Mobile has emphasized network leadership and service diversification. Key areas of focus include expanding its 5G infrastructure and increasing its high-speed internet services by utilizing surplus network capacity. The company's continuous effort to enhance operational efficiencies post its merger with former competitor Sprint has been pivotal in bolstering its competitive position.
Quarterly Highlights
T-Mobile achieved record postpaid phone net additions, adding 903,000 new customers in the fourth quarter, showcasing its strong ability to attract and retain subscribers. This growth brought total net customer additions to approximately 1.93 million for the period. T-Mobile's postpaid phone churn rate decreased to a record low of 0.92%, indicating high customer satisfaction and retention.
Service revenue climbed to $16.9 billion in the fourth quarter, reflecting a 6% increase year over year, while postpaid service revenue rose 8% to $13.5 billion. These positive figures underscore the strong demand for T-Mobile's services and highlight its success in leveraging its expansive 5G network.
The company's high-speed internet services saw 428,000 new customers as T-Mobile continues to enhance its service portfolio beyond mobile connectivity, closing the year with 6.4 million internet customers. T-Mobile also made significant shareholder returns, repurchasing shares worth $11.1 billion and distributing $3.3 billion in cash dividends in 2024.
Financially, T-Mobile's net income soared to $2.98 billion, marking a 48% increase from last year due to improved service revenue and cost efficiencies. Core adjusted EBITDA grew by 10% to $7.9 billion, reinforcing its profitability and fiscal health.
Looking Ahead
For 2025, T-Mobile management foresees continued growth and has projected postpaid net customer additions to range between 5.5 million and 6.0 million. It also anticipates core adjusted EBITDA to fall between $33.1 billion and $33.6 billion, reflecting confidence in its ongoing strategic initiatives. Net cash from operating activities is expected to be between $26.8 billion and $27.5 billion and adjusted free cash flow is expected to be between $17.3 billion and $18.0 billion.
T-Mobile remains focused on sustaining its 5G leadership position, enhancing customer experiences through its unique Un-carrier initiatives, and executing strategic integration post-Sprint merger. While regulatory environment changes pose potential risks, T-Mobile aims to manage these challenges by staying agile and strategically aligning its operations with evolving norms.
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