T-Mobile tops Q3 profit estimates as service revenue rises 6%

T-Mobile US, Inc. (TMUS) said on Oct. 28 that third-quarter diluted earnings per share rose to $3.22 from $2.41 a year earlier, topping the $2.97 consensus estimate compiled by Finnhub. Revenue of $23.58 billion was in line with the $23.6 billion estimate.

The company also raised part of its 2026 outlook at the midpoint and said account growth was ahead of its original expectations, according to its 8-K filing.

Here's how the company did:

• Diluted EPS: $3.22 vs. $2.41 a year earlier, and $2.97 expected, according to Finnhub
• Total revenues: $23.58 billion vs. $21.96 billion a year earlier, and $23.6 billion expected, according to Finnhub
• Net income: $3.5 billion vs. $2.7 billion a year earlier

Service revenues grew 6% year-over-year to $19.4 billion, and postpaid service revenues grew 9% to $16.3 billion. The company attributed the postpaid growth to higher average postpaid accounts, including after the UScellular and Metronet acquisitions, and to higher postpaid ARPA.

“Q3 marked another strong quarter and is further proof that our winning formula of the best network, best value, and best experiences drives durable and profitable growth,” said CEO Srini Gopalan. “More families and businesses are choosing T-Mobile, fueling our industry-leading financial growth.”

Postpaid net account additions were 274 thousand, and total postpaid accounts reached 35.0 million, up 3% year-over-year. Average revenue per account, or ARPA, rose 4% to $155.73. Postpaid account churn was 1.09%, up 12 basis points year-over-year.

Net income rose 27% to $3.5 billion. Core Adjusted EBITDA, or Adjusted EBITDA less device lease revenues, rose 11% to $9.6 billion. Adjusted Free Cash Flow, or operating cash flow less purchases of property and equipment, rose 5% to $5.1 billion.

2026 guidance

The company raised its Core Adjusted EBITDA forecast at the midpoint, to a range of $37.35 billion to $37.45 billion from the $37.1 billion to $37.5 billion range it gave on July 23. The midpoint rose $100 million.

Adjusted Free Cash Flow is now expected to be $18.7 billion to $18.8 billion, an increase of $150 million at the midpoint from prior guidance of $18.4 billion to $18.8 billion. Net cash provided by operating activities is now expected at $28.7 billion to $28.8 billion, up $150 million at the midpoint from $28.4 billion to $28.8 billion.

The effective tax rate forecast falls to 24% to 25%, from 25% to 26%. Postpaid net account additions are expected at about 1.0 million, unchanged at the midpoint. Capital expenditures are still expected to be about $10.0 billion.

Cash flow and shareholder returns

Net cash provided by operating activities fell 2% to $7.3 billion, primarily due to higher net cash outflows from changes in working capital, the company said. Cash purchases of property and equipment fell 14% to $2.3 billion, which it attributed to the planned timing of capital purchases.

The board declared a quarterly cash dividend of $1.17 per share, an increase of 15 cents, or 15%. The dividend is payable Dec. 10, 2026, to holders of record at the close of business on Nov. 25, 2026.

Stockholder returns totaled $3.5 billion in the quarter, including $2.4 billion of common stock repurchases and $1.1 billion of cash dividends. The board raised the 2026 stockholder return authorization to up to $18.2 billion on April 23, an increase of up to $3.6 billion. Through Oct. 23, 2026, the company said it had repurchased an additional $791 million of common stock in the fourth quarter.