• Postpaid Phone Net Additions: 903,000 in Q4 2024.
• Postpaid Service Revenue Growth: Over 8% in Q4 2024.
• Core Adjusted EBITDA Growth: 10% in Q4 2024, 9% for the full year.
• Diluted Earnings Per Share: Highest-ever for the full year 2024.
• Free Cash Flow: $17 billion for the full year 2024.
• Cash Flow Conversion from Service Revenues: 26% for the full year 2024.
• Broadband Net Additions: 428,000 in Q4 2024.
• Postpaid ARPA Growth: Highest rate in over seven years in Q4 2024.
• 2025 Postpaid Customer Net Additions Guidance: 5.5 million to 6 million.
• 2025 Service Revenue Growth Expectation: Approximately 5% for the full year.
• 2025 Core Adjusted EBITDA Guidance: $33.1 billion to $33.6 billion.
• 2025 Cash CapEx Expectation: Approximately $9.5 billion.
• 2025 Adjusted Free Cash Flow Guidance: $17.3 billion to $18 billion.

• Warning! GuruFocus has detected 6 Warning Signs with TMUS.

Release Date: January 29, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• T-Mobile US Inc (NASDAQ:TMUS) achieved its highest-ever postpaid phone gross additions in 2024, marking the greatest growth year in its history.
• The company led the industry in postpaid phone net additions in Q4 2024, with 903,000 net additions, and maintained the lowest-ever total postpaid churn.
• T-Mobile US Inc (NASDAQ:TMUS) saw over 60% of new customers selecting premium plans, leading to the highest postpaid ARPA growth in over seven years.
• The company delivered its highest-ever diluted earnings per share and free cash flow of $17 billion in 2024, with a cash flow conversion from service revenues of 26%.
• T-Mobile US Inc (NASDAQ:TMUS) was recognized by third parties for network leadership, winning all five overall network experience categories from OpenSignal and outperforming competitors in Ookla's assessments.

Negative Points

• The wholesale revenue is expected to reach its low point in 2025 due to the planned tapering of partnerships with companies like DISH and TracFone.
• The company faces challenges in maintaining growth in fixed wireless access, with a slight decline in high-speed Internet-only accounts compared to previous quarters.
• T-Mobile US Inc (NASDAQ:TMUS) is navigating the complexities of multiple acquisitions and joint ventures, which may impact financials and require significant integration efforts.
• The company is exposed to potential impacts from immigration trends, although it claims to be insulated due to its focus on premium monthly prepaid subscriptions.
• There is uncertainty regarding the financial impact of new ventures like the Vistar acquisition and the expansion of satellite services, which are still in early stages of development.

Q & A Highlights

Q: Can you provide more details on the 5% service revenue growth guidance and the factors contributing to it? A: Peter Osvaldik, CFO, explained that the growth is driven by both customer growth and ARPA (Average Revenue Per Account) growth. The wholesale revenue decline is slowing, and they expect continued deepening of customer relationships to drive ARPA growth. The company delivered over 3% ARPA growth in 2024 and expects similar growth in 2025.

Q: How is T-Mobile addressing the potential slowdown in subscriber growth, and what gives you confidence in your guidance? A: CEO Mike Sievert highlighted that T-Mobile is gaining share across various markets, including top 100 markets, smaller markets, and rural areas. The company is also experiencing strong growth in T-Mobile for Business. The combination of best network, best value, and best experiences is driving this growth, leading to an increased guidance for subscriber additions.

Q: What is the strategy behind the Vistar acquisition, and how does it fit into T-Mobile's advertising ambitions? A: Mike Katz, President of Marketing, Innovation, and Experience, explained that Vistar's technology platform combined with T-Mobile's customer intelligence can transform the out-of-home advertising industry by bringing measurability and impact. This aligns with T-Mobile's ambition to become a leading advertising support service.

Q: How is T-Mobile planning to leverage its fiber and high-speed wireless products in the broadband market? A: CEO Mike Sievert stated that the focus is on taking market share rather than just market growth. T-Mobile has adjusted its pricing to compete for price-sensitive customers while also achieving broadband ARPA growth. The company sees opportunities to deepen ARPU with associated services over time.

Q: What is T-Mobile's approach to wholesale opportunities and managing fixed wireless demand in high-utilization areas? A: Mike Sievert explained that T-Mobile looks for wholesale partners who can target audiences better than T-Mobile's existing brands. The company aims for attractive returns on network capacity. For fixed wireless, T-Mobile uses an algorithm to ensure sectors have excess capacity before approving broadband applicants, avoiding congestion issues.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.