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T-Mobile US (TMUS) Q2 Earnings call transcript Jul 31, 2024

AInvestWednesday, Jul 31, 2024 9:22 pm ET
1min read

T-Mobile US, a leading wireless communications provider, showcased a robust performance in its second quarter earnings call for 2024, highlighting record-breaking customer growth, network leadership, and strategic expansion into fiber broadband. The call was led by Mike Sievert, President and CEO, and Peter Osvaldik, CFO, alongside other senior leaders.

Customer Growth and Network Performance

T-Mobile reported its highest-ever Q2 postpaid phone net adds, reaching 777,000, with a total of 100 million customer connections. This growth was balanced across both smaller markets and rural areas, as well as top 100 markets. The company's postpaid phone gross adds also saw a significant increase, reflecting the strength of its customers' experience on its differentiated 5G network.

Network leadership was a prominent theme during the call, with T-Mobile sweeping every category for overall network performance in the latest Opensignal and Ookla tests. The company's download speeds are up to 3x as fast as competitors, and it has nearly 6x the 5G availability as its next closest competitor. T-Mobile's network was also awarded the most consistent by both independent third parties, a key indicator of an overall superior network experience.

Expansion into Fiber Broadband

A significant highlight of the call was T-Mobile's strategic expansion into fiber broadband. The company announced its partnership with KKR to acquire Metronet, the nation's fastest-growing pure-play fiber provider, which already reaches over 2 million homes today and is expected to grow to 6.5 million homes passed by 2030. This partnership represents a unique opportunity for T-Mobile to bring consumers greater choice where they need it most and leverage its scale, brand, distribution, and existing customer relationships to grow faster and smarter.

Financial Performance and Guidance

T-Mobile's financial performance in Q2 was impressive, demonstrating profitable growth in customers and translating that to industry-leading service revenue growth and core adjusted EBITDA growth. The company reported record adjusted free cash flow, growing 54% year-over-year and leading the major wireless companies in free cash flow margin.

Looking ahead, T-Mobile raised its total postpaid customer net additions to between 5.4 million and 5.7 million for the full year, with a record number of postpaid phone net customer additions. The company also expects its full-year postpaid ARPA to be up to 3% higher year-over-year, with industry-leading service revenue growth accelerating at a higher rate in 2024 than in 2023.

Conclusion

T-Mobile's second quarter earnings call for 2024 underscored its strong financial performance, customer growth, and strategic expansion into fiber broadband. The company's focus on network leadership, coupled with its strategic partnerships and innovative approaches, positions it well for continued growth and value creation for shareholders. With its unique assets and capabilities, T-Mobile is poised to unlock significant shareholder value in the coming years.

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