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T-Mobile US, Inc. a Bellevue-based  company has announced that its Q2 numbers have been the best in company history. Here are some of the highlights from T-Mobile’s record setting second quarter:

T-Mobile Announced Its Best Q2 So FarT-Mobile

Industry-Leading Customer Growth

  • 1.6 million total net additions – 21st consecutive quarter with more than 1 million net additions
  • 1.0 million total branded postpaid net additions – supported by continued strong postpaid other net additions
  • 686,000 branded postpaid phone net additions – led industry for the 18th consecutive quarter
  • 91,000 branded prepaid net additions – flat year-over-year despite increased competitive activity in the market
  • Record low 0.95% branded postpaid phone churn, down 15 bps year-over-year

Strong Financial Performance (all percentages year-over-year)

  • Service revenues up 7% to $7.9 billion – led industry for the 17th consecutive quarter
  • Total revenues up 4% to $10.6 billion
  • Net income up 35% to $782 million and diluted earnings per share (EPS) of $0.92
  • Adjusted EBITDA(1) up 7% to $3.2 billion
  • Net cash provided by operating activities(3) up 14% to $1.3 billion
  • Free Cash Flow(1)(3) up 61% to $774 million

Network Expansion Continues, Garners Industry Accolades

  • T-Mobile now covers 323 million people with 4G LTE – targeting 325 million people by year-end 2018
  • Aggressive deployment of 600 MHz in Q2 2018, augmenting existing low-band capabilities on 700 MHz
  • Fastest LTE network according to Ookla; outright winner in 5 of 7 categories in most recent OpenSignal study

Continued Strong Outlook for 2018

  • Increased target for branded postpaid net customer additions of 3.0 to 3.6 million
  • Net income is not available on a forward-looking basis(2)
  • Increased Adjusted EBITDA target of $11.5 to $11.9 billion including leasing revenues of $0.6 to $0.7 billion(1)
  • Cash purchases of property and equipment, excluding capitalized interest, of $4.9 to $5.3 billion, unchanged from the prior target range, now expected to come in at the high end of the range. This includes expenditures for 5G deployment
  • Three-year compound annual growth rates (CAGRs) for Net cash provided by operating activities and Free Cash Flow from FY 2016 to FY 2019 also unchanged at 7% – 12% and 46% – 48%, respectively(1)(3)

T-Mobile US, Inc. (NASDAQ: TMUS) reported record results in the second quarter of 2018 with industry-leading branded customer growth, record-high service revenues, record-high Q2 profitability, and record-low postpaid phone churn. The Un-carrier has changed wireless for good and proven that putting customers first is the best way to deliver sustained, industry-leading results. T-Mobile continues to balance growth and profitability – delivering records in both categories in the second quarter of 2018.
T-Mobile once again outperformed the competition as the company continues to optimize its offers for key segments of the market, expand into new geographies and set the standard for customer experience. This has resulted in growth in postpaid phone net additions both sequentially and year-over-year as the Un-carrier again leads the industry in the second quarter with nearly twice the aggregate postpaid phone net additions of Verizon, AT&T, Sprint and Comcast combined and more than three times the net additions of our next closest competitor, Comcast. In addition, the company delivered record-low postpaid phone churn of 0.95% – the best result in company history. These results have translated into record-high service revenues, which T-Mobile has now grown year-over-year for 17 quarters in a row.
“T-Mobile just recorded its best Q2 in company history,” said John Legere, CEO of T-Mobile. “That means 21 quarters with over one million net adds, record-high service revenues, industry-leading postpaid phone net additions, and record-low postpaid phone churn. Our business is strong, our strategy is working and we won’t stop!”
Industry-Leading Customer Growth
T-Mobile continues to deliver industry-leading customer growth, and Q2 2018 was no different. We once again led the industry in branded postpaid phone customer net additions, capturing about two thirds of the segment. Customers continue to choose the Un-carrier over the competition as we put all our energy and efforts into giving our customers more value and treating them right.

Six Months Ended
June 30,
(in thousands, except churn) Q2 2018 Q1 2018 Q2 2017 2018 2017
Total net customer additions(2) 1,579 1,433 1,333 3,012 2,475
Branded postpaid net customer additions 1,017 1,005 817 2,022 1,731
Branded postpaid phone net customer additions (1)(2) 686 617 533 1,303 1,331
Branded postpaid other customer additions (1) 331 388 284 719 400
Branded prepaid net customer additions(2) 91 199 94 290 480
Total customers, end of period (2)(3) 75,619 74,040 69,562 75,619 69,562
Branded postpaid phone churn 0.95 % 1.07 % 1.10 % 1.01 % 1.14 %
Branded prepaid churn 3.81 % 3.94 % 3.91 % 3.87 % 3.96 %
(1) During the third quarter of 2017, we retitled our “Branded postpaid mobile broadband customers” category to “Branded postpaid other customers” and included DIGITS customers and reclassified 253,000 DIGITS customer net additions from our “Branded postpaid phone customers” category for the second quarter of 2017, when the DIGITS product was released.
(2) As a result of the acquisition of Iowa Wireless Services, LLC (IWS), we included an adjustment of 13,000 branded postpaid phone and 4,000 branded prepaid IWS customers in our reported subscriber base as of January 1, 2018. Additionally, as a result of the acquisition of Layer3 TV, we included an adjustment of 5,000 branded prepaid customers in our reported subscriber base as of January 22, 2018. Customer activity post acquisition was included in our net customer additions for Q1 2018.
(3) We believe current and future regulatory changes have made the Lifeline program offered by our wholesale partners uneconomical. We will continue to support our wholesale partners offering the Lifeline program, but have excluded the Lifeline customers from our reported wholesale subscriber base resulting in the removal of 4.4 million reported wholesale customers as of the beginning of Q2 2017.
  • Total net customer additions were 1.6 million in Q2 2018, bringing our total customer count to 75.6 million. Q2 2018 marked the 21st straight quarter in which T-Mobile generated more than 1 million total net customer additions.
  • Branded postpaid net customer additions were 1.0 million in Q2 2018, up 200,000 from Q2 2017. Strength in postpaid phone net additions and postpaid other net additions, driven by wearables, drove the year-over-year increase.
  • Branded postpaid phone net customer additions were 686,000 in Q2 2018, up 153,000 from Q2 2017. This marks the 18th consecutive quarter in which T-Mobile has led the industry in this category. Sequentially and year-over-year, branded postpaid phone net customer additions increased due to continued growth in existing and Greenfield markets, the growing success of new customer segments such as T-Mobile for Business, T-Mobile ONE Unlimited 55+, and T-Mobile ONE Military, as well as record-low churn.
  • Branded postpaid other net customer additions were 331,000 in Q2 2018, up 47,000 from Q2 2017. Year-over-year the increase was due to higher gross customer additions from connected devices, specifically the Apple watch, partially offset by lower DIGITS gross customer additions and higher deactivations from a growing customer base.
  • Branded postpaid phone churn was a record-low of 0.95% in Q2 2018, down 15 basis points from Q2 2017, primarily due to increased customer satisfaction and loyalty from ongoing improvements to network quality, industry-leading customer service and the overall value of our offerings in the marketplace.
  • Branded prepaid net customer additions were 91,000 in Q2 2018, down 3,000 from Q2 2017.
  • Branded prepaid churn was 3.81% in Q2 2018, down 10 basis points compared to Q2 2017, primarily due to the continued impact from the optimization of our third-party distribution channels which was substantially completed during Q1 2017, partially offset by higher deactivations from a growing customer base and increased competitive activity in the marketplace.

Strong Financial Performance
Our strong customer results translated into record financial results. T-Mobile again posted record-high service revenues, and Q2 marks the 17th quarter in a row where we led the industry in year-over-year service revenue percentage growth. In addition, the company posted strong net income and record Adjusted EBITDA.

(in millions, except EPS) Quarter
Six Months Ended
June 30,
Q2 2018
Q1 2018
Q2 2018
Q2 2017
YTD 2018
YTD 2017
Q2 2018 Q1 2018 Q2 2017 2018 2017
Total service revenues $ 7,931 $ 7,806 $ 7,445 $ 15,737 $ 14,774 1.6 % 6.5 % 6.5 %
Total revenues 10,571 10,455 10,213 21,026 19,826 1.1 % 3.5 % 6.1 %
Net income 782 671 581 1,453 1,279 16.5 % 34.6 % 13.6 %
EPS 0.92 0.78 0.67 1.69 1.47 17.9 % 37.3 % 15.0 %
Adjusted EBITDA (1) 3,233 2,956 3,012 6,189 5,680 9.4 %

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