T-Mobile Earnings: FCF Up, Revenue Slightly Misses

T-Mobile earnings on July 23, 2026 showed a profit gain and an upgraded full-year free-cash-flow outlook as customers migrated to premium "Experience" plans, even as quarterly revenue came in slightly below analyst expectations and management flagged moderation tied to rate-plan modernization.

Quarter Results, Profitability, and Guidance

T-Mobile US, Inc. (TMUS) reported results for the quarter ended June 30, 2026, in a press release and SEC Form 8-K filed on July 23. Total revenues reached $22.8 billion, up about 8% year over year, while total service revenue rose 9% to $19.0 billion.

Postpaid service revenue increased 13% to $15.9 billion. Postpaid net additions totaled 277,000, down 13% from a year earlier but above some analyst estimates. Postpaid average revenue per account (ARPA) rose 2% to $152.91.

Net income was $3.2 billion, about 1% higher year over year. Diluted GAAP earnings per share (EPS) rose 5% to $2.99, including $146 million after-tax merger-related costs from the UScellular transaction and $46 million after-tax network restructuring costs, impacting EPS by roughly $0.14 and $0.04 per share, respectively. Core Adjusted EBITDA, a proxy for operating profit, grew 12% to $9.5 billion.

Cash generation strengthened as net cash provided by operating activities rose 7% to $7.5 billion. Adjusted Free Cash Flow (FCF) increased 4% to $4.8 billion, yielding a 25.0% free-cash-flow margin for the quarter.

For full-year 2026, T-Mobile reiterated a target of 950,000 to 1.05 million postpaid net account additions and forecast Core Adjusted EBITDA between $37.1 billion and $37.5 billion. The company raised its outlook for net cash provided by operating activities to $28.4 billion–$28.8 billion and increased free cash flow guidance to $18.4 billion–$18.8 billion. Capital expenditures are expected to total about $10.0 billion, with a full-year service revenue target near $77 billion.

Management attributed the upward revisions to efficiencies in cash income taxes and working capital, aided by deploying advanced AI tools in finance and operations. The company has been retiring legacy wireless plans and migrating customers to newer Experience premium plans, which bundle premium unlimited data, streaming perks, and a five-year pricing guarantee. About 60% of new customers in the quarter chose extended premium options, supporting ARPA growth.

Management also signaled that rate-plan modernization would weigh on near-term additions, forecasting roughly 250,000 postpaid net additions in the third quarter as migrations continue. The company described the quarter as driven more by a higher-value customer mix and cash generation than by short-term account-add momentum, stating, "T-Mobile delivered continued strong account growth and deepening customer relationships fueled by widening differentiation."

These results illustrate T-Mobile’s strategy to prioritize ARPA and cash-flow expansion through premium plans and operational efficiencies while accepting some moderation in near-term subscriber growth as customers transition from legacy offers.