Why did TMUS's Q1 2024 earnings disappoint?

T-Mobile US's Q1 2024 earnings disappointed due to several factors:

1. **Revenue Decline**: Although T-Mobile's revenue was slightly below expectations at $21.87 billion, the primary concern was the year-over-year decrease of 2.6% in revenue compared to the previous quarter. This decline is a significant indicator of weakening sales trends.

|code|Ticker|Name|Date|Revenue Surprise|Total Revenue|market_code|
|---|---|---|---|---|---|---|
|TMUS|TMUS.O|T-Mobile US|2024 Q1|-2.1E8|1.9594E10|185|
|TMUS|TMUS.O|T-Mobile US|2024 Q2|2.02E8|1.9772E10|185|
|TMUS|TMUS.O|T-Mobile US|2024 Q3|1.52E8|2.0162E10|185|
|TMUS|TMUS.O|T-Mobile US|2024 Q4|5.12E8|2.1872E10|185|

2. **Customer Addition Slowdown**: The company's CEO, Mike Sievert, indicated that certain factors would impact the results, including a slowdown in customer additions. T-Mobile's customer growth had been a highlight, but this momentum seemed to wane, as evidenced by a "decade-long record" of subscriber additions in the fourth quarter. This slowdown is a critical aspect of the revenue disappointment.
3. **Gross Margin Pressure**: T-Mobile faced challenges in managing costs, as indicated by a $50 million increase in costs due to the Affordable Connectivity Program and a $137 million non-cash spectrum gain. These pressures squeezed margins, affecting the company's profitability.
4. **Market Saturation and Competition**: The U.S. wireless market is becoming increasingly saturated, making it challenging for T-Mobile to find new customers. The company has been promoting products like home internet service to find new income streams, but this transition takes time and effort. The intense competition from rivals AT&T and Verizon also contributed to the difficulties in sustaining growth.

In summary, T-Mobile's Q1 2024 earnings disappointment can be attributed to a combination of revenue decline, customer addition slowdown, gross margin pressure, and market saturation. These factors, either directly or indirectly, affect the company's financial performance and investor confidence.