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TMUS Q2 Earnings Top Estimates on Strong Service Revenue Growth
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Key Takeaways
T-Mobile beat Q2 earnings and revenue estimates on strong service revenue growth and higher postpaid ARPA.
TMUS grew postpaid service revenues 12.6% and raised its 2026 operating cash flow and free cash flow outlook.
TMUS generated higher EBITDA and cash flow despite rising operating costs and continued network investments.
T-Mobile US, Inc. (TMUS - Free Report) reported second-quarter 2026 earnings of $3.13 per share, beating the Zacks Consensus Estimate of $2.49 by 25.7%. Total revenues of $22.79 billion also edged past the consensus mark of $22.74 billion by 0.21% and increased 7.9% year over year.
The strong performance reflected continued growth in service revenues, expanding postpaid average revenue per account (ARPA) and solid customer additions. Postpaid ARPA increased 2% year over year to $152.91, underscoring the company's ability to deepen customer relationships and drive higher monetization.
TMUS Benefits From Service Revenue Expansion
T-Mobile generated total service revenues of $18.98 billion in the second quarter, up 8.9% from the year-ago period. Postpaid service revenues climbed 12.6% year over year to $15.85 billion, supported by higher average postpaid accounts following the UScellular and Metronet acquisitions as well as higher postpaid ARPA.
Total revenues increased 7.9% year over year to $22.79 billion despite a sequential decline from the first quarter, reflecting lower equipment sales. Equipment revenues increased modestly from the prior-year quarter as a richer mix of high-end smartphones offset lower unit volumes, while service revenues continued to be the primary growth engine.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
TMUS reported postpaid net account additions of 277,000 during the quarter compared with 318,000 a year ago. Total postpaid accounts increased to 34.7 million from 31.5 million in the prior-year quarter, highlighting continued expansion of the subscriber base despite slower net additions.
Postpaid account churn was 0.99% compared with 0.92% a year ago, primarily reflecting a higher mix of broadband-only accounts. Meanwhile, ARPA rose to $152.91 from $149.87, benefiting from higher fee revenue, increased customers per account, broader adoption of tax and fee-exclusive plans and continued growth in broadband and business accounts.
TMUS Faces Higher Operating Costs
Operating expenses increased to $17.30 billion from $15.92 billion in the prior-year quarter. Higher costs of services, equipment sales, selling, general and administrative expenses, and depreciation and amortization all contributed to the increase.
Despite elevated expenses, profitability remained resilient. Net income rose modestly to $3.24 billion from $3.22 billion a year earlier, while diluted earnings per share increased 5.3% year over year to $2.99. Results included the impact of UScellular merger-related costs, including accelerated depreciation, net of tax, amounting to $146 million, or $0.14 per share.
T-Mobile Delivers Healthy Cash Generation
Core adjusted EBITDA increased 11.7% year over year to $9.54 billion, reflecting continued operating leverage as service revenues expanded. Net cash provided by operating activities rose 7.3% year over year to $7.5 billion, demonstrating the company's ability to translate revenue growth into cash generation.
Adjusted free cash flow improved 4.4% year over year to $4.8 billion despite higher capital spending. Cash purchases of property and equipment, including capitalized interest, increased 12.8% to $2.7 billion as the company continued investing in network expansion and integration initiatives. During the quarter, T-Mobile returned $3.3 billion to shareholders through $2.2 billion of share repurchases and $1.1 billion in dividends.
TMUS Raises Cash Flow Outlook for 2026
Management reaffirmed its expectation for postpaid net account additions between 950,000 and 1.05 million for 2026 while maintaining its Core Adjusted EBITDA guidance in the range of $37.1 billion to $37.5 billion.
The company raised its outlook for net cash provided by operating activities to $28.4-$28.8 billion from the prior range of $28.1-$28.7 billion. Adjusted free cash flow guidance was also increased to $18.4-$18.8 billion from the previous outlook of $18.1-$18.7 billion, reflecting management's confidence in sustained service revenue growth, disciplined execution and continued cash generation.
Arista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.
View the Zacks #1 Rank List
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TMUS Q2 Earnings Top Estimates on Strong Service Revenue Growth
Key Takeaways
T-Mobile US, Inc. (TMUS - Free Report) reported second-quarter 2026 earnings of $3.13 per share, beating the Zacks Consensus Estimate of $2.49 by 25.7%. Total revenues of $22.79 billion also edged past the consensus mark of $22.74 billion by 0.21% and increased 7.9% year over year.
The strong performance reflected continued growth in service revenues, expanding postpaid average revenue per account (ARPA) and solid customer additions. Postpaid ARPA increased 2% year over year to $152.91, underscoring the company's ability to deepen customer relationships and drive higher monetization.
TMUS Benefits From Service Revenue Expansion
T-Mobile generated total service revenues of $18.98 billion in the second quarter, up 8.9% from the year-ago period. Postpaid service revenues climbed 12.6% year over year to $15.85 billion, supported by higher average postpaid accounts following the UScellular and Metronet acquisitions as well as higher postpaid ARPA.
Total revenues increased 7.9% year over year to $22.79 billion despite a sequential decline from the first quarter, reflecting lower equipment sales. Equipment revenues increased modestly from the prior-year quarter as a richer mix of high-end smartphones offset lower unit volumes, while service revenues continued to be the primary growth engine.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
T-Mobile US, Inc. price-consensus-eps-surprise-chart | T-Mobile US, Inc. Quote
T-Mobile Strengthens Customer Metrics
TMUS reported postpaid net account additions of 277,000 during the quarter compared with 318,000 a year ago. Total postpaid accounts increased to 34.7 million from 31.5 million in the prior-year quarter, highlighting continued expansion of the subscriber base despite slower net additions.
Postpaid account churn was 0.99% compared with 0.92% a year ago, primarily reflecting a higher mix of broadband-only accounts. Meanwhile, ARPA rose to $152.91 from $149.87, benefiting from higher fee revenue, increased customers per account, broader adoption of tax and fee-exclusive plans and continued growth in broadband and business accounts.
TMUS Faces Higher Operating Costs
Operating expenses increased to $17.30 billion from $15.92 billion in the prior-year quarter. Higher costs of services, equipment sales, selling, general and administrative expenses, and depreciation and amortization all contributed to the increase.
Despite elevated expenses, profitability remained resilient. Net income rose modestly to $3.24 billion from $3.22 billion a year earlier, while diluted earnings per share increased 5.3% year over year to $2.99. Results included the impact of UScellular merger-related costs, including accelerated depreciation, net of tax, amounting to $146 million, or $0.14 per share.
T-Mobile Delivers Healthy Cash Generation
Core adjusted EBITDA increased 11.7% year over year to $9.54 billion, reflecting continued operating leverage as service revenues expanded. Net cash provided by operating activities rose 7.3% year over year to $7.5 billion, demonstrating the company's ability to translate revenue growth into cash generation.
Adjusted free cash flow improved 4.4% year over year to $4.8 billion despite higher capital spending. Cash purchases of property and equipment, including capitalized interest, increased 12.8% to $2.7 billion as the company continued investing in network expansion and integration initiatives. During the quarter, T-Mobile returned $3.3 billion to shareholders through $2.2 billion of share repurchases and $1.1 billion in dividends.
TMUS Raises Cash Flow Outlook for 2026
Management reaffirmed its expectation for postpaid net account additions between 950,000 and 1.05 million for 2026 while maintaining its Core Adjusted EBITDA guidance in the range of $37.1 billion to $37.5 billion.
The company raised its outlook for net cash provided by operating activities to $28.4-$28.8 billion from the prior range of $28.1-$28.7 billion. Adjusted free cash flow guidance was also increased to $18.4-$18.8 billion from the previous outlook of $18.1-$18.7 billion, reflecting management's confidence in sustained service revenue growth, disciplined execution and continued cash generation.
TMUS’ Zacks Rank
TMUS currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. (ANET - Free Report) is scheduled to release second-quarter 2026 earnings on Aug. 8. The Zacks Consensus Estimate for earnings is pegged at 89 cents per share, suggesting growth of 21.92% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 19.86%. The company delivered an average earnings surprise of 8.31% in the last four reported quarters.
Amphenol Corporation (APH - Free Report) is set to release second-quarter 2026 earnings on July 29. The Zacks Consensus Estimate for earnings is pegged at $1.19 per share, implying growth of 46.91% from the year-ago reported figure.
Amphenol has a long-term earnings growth expectation of 24.01%. The company delivered an average earnings surprise of 14.08% in the last four reported quarters.
Corning Incorporated (GLW - Free Report) is set to release second-quarter 2026 earnings on July 28. The Zacks Consensus Estimate for earnings is pegged at 76 cents per share, implying growth of 26.67% from the year-ago reported figure.
Corning has a long-term earnings growth expectation of 23.89%. The company delivered an average earnings surprise of 2.41% in the last four reported quarters.