NEW YORK, July 23, 2026, 09:34 EDT
- Initial market reaction: U.S. markets were trading, and TMUS fell over 6% near the opening bell.
- Service revenue climbed 8.9%, while adjusted free cash flow was up just 4.4%.
- The midpoint for 2026 cash-flow guidance increased by 1.1% to $18.6 billion.
T-Mobile US stock dropped over 6% shortly after Thursday’s market open, a steeper fall compared to the approximately 1% decrease suggested by U.S. index futures.
The second-quarter results demonstrated solid pricing strength. However, the increase in revenue did not translate to equivalent cash flow.
Service revenue climbed 8.9% and core adjusted EBITDA was up 11.7%. Adjusted free cash flow, which is a non-GAAP metric, advanced 4.4%. The margin contracted by 110 basis points.
Cash capital expenditures increased by 12.8%. Company figures indicate the source of the conversion gap.
| Metric | Q2 2025 | Q2 2026 | Change |
|---|---|---|---|
| Service revenue | $17.44 bln | $18.98 bln | +8.9% |
| Core adjusted EBITDA | $8.54 bln | $9.54 bln | +11.7% |
| Cash capital spending | $2.40 bln | $2.70 bln | +12.8% |
| Adjusted free cash flow | $4.60 bln | $4.80 bln | +4.4% |
| Adjusted free-cash-flow margin | 26.4% | 25.3% | -110 bps |
| Postpaid net account additions | 318,000 | 277,000 | -12.9% |
| Postpaid ARPA | $149.87 | $152.91 | +2.0% |
T-Mobile raised the midpoint of its annual cash-flow guidance by $200 million, or 1.1%, bringing it to $18.6 billion. The company made no adjustments to its outlook for EBITDA, capital spending, or account additions.
Revenue for the quarter was $22.79 billion, falling roughly 0.7% short of the consensus forecast of $22.95 billion. Earnings per share came in at $2.99, surpassing the $2.59 estimate by 15%.
Postpaid net account additions exceeded the 259,000 forecast by analysts, though they declined by 13% year-on-year. Account churn increased to 0.99% compared with 0.92% previously.
Average postpaid revenue per account increased by 2% to $152.91. Chief Operating Officer Jon Freier stated that around 60% of new customers selected “our most premium plans.” Pricing contributed more than customer volume. Reuters
Chief Financial Officer Peter Osvaldik said the increase in cash flow was due to “continued efficiencies,” including reduced cash taxes. He pointed to working-capital improvements resulting from advanced artificial-intelligence tools. Reuters
The distinction is significant. The majority of the upgrade resulted from improved efficiency instead of higher subscriber forecasts.
T-Mobile anticipates around 250,000 postpaid net account additions in the third quarter. Executives project a short-term rise in churn due to changes in rate plans. For the full year, ARPA growth is projected to be close to the upper end of its forecast range at 3%.
AT&T NYSE:T posted 432,000 net postpaid phone subscriber gains and generated $4.7 billion in free cash flow. The company’s phone-addition figure does not align directly with T-Mobile’s billing-account measurement.
Verizon Communications NYSE:VZ is set to announce second-quarter earnings on Friday, July 24. Watch for key updates on churn and cash flow for a peer comparison.
T-Mobile relies on cash conversion to fund capital returns. The firm allocated $2.2 billion for share repurchases and distributed $1.1 billion in dividends, representing roughly 69% of its adjusted free cash flow for the quarter.
Risks persist. Adjustments to rate plans may increase churn. Accelerated network investments could continue to weigh on cash conversion.
The upcoming test is clear-cut. T-Mobile needs to maintain pricing improvements as it works to steady account growth and cash margins.
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