T-Mobile US reports all-time high financials in Q1, lowest churn

T-Mobile US said its financial results reached an all-time high in the first quarter, while churn went to a record low of 0.88 percent, down 19 basis points. As a result, the company has increased its full year forecast for net additions to 3.1-3.7 million, from its previous guidance of 2.6-3.6. In Q1, the company recorded 1.7 million net additions, up 15 percent from the year before, with 1.0 million branded postpaid net additions, 656,000 branded postpaid phone net additions and 69,000 branded prepaid net additions. The total customer count is 81.3 million. 

Revenues for the quarter advanced 6 percent from the year before to USD 11.1 billion, with service revenues rising 6 percent, also, to USD 8.3 percent. The net profit jumped 35 percent to USD 908, with diluted earnings per share going 36 percent higher to USD 1.06. The adjusted EBITDA lifted 11 percent to USD 3.3 billion. Operating cash flow leaped 81 percent to USD 1.4 billion while the free cash flow slid 7 percent to USD 618 million on the back of higher capex and the impact of merger-related costs. 

Branded postpaid ARPU decreased 1.3 percent to USD 46.07, mainly due to regulatory effects, plus a reduction in certain non-recurring charges, the growing success of new customer segments and rate plans, and the impact of the ongoing growth in the company’s Netflix offering, partially offset by higher premium services revenue and a net reduction in promotional activities. The company still expects full year ARPU to be generally stable. Branded prepaid ARPU fell 3.2 percent, primarily because of dilution from promotional rate plans and growth at the company’s Amazon Prime offering. 

T-Mobile US said that 99 percent of people in the US are now covered by its 4G network and that the deployment of 600 MHz using 5G ready equipment has reached nearly 3,500 cities and towns. The company said it is on track to have the first nationwide 5G network available next year.

For the full year, the company still sees adjusted EBITDA at USD 12.7-13.2 billion but has increased expectations for net cash provided by operating activities. This is now expected up 32-35 percent, from the previous guidance of 17-21 percent. The three-year CAGR for free cash flow from FY 2016 to FY 2019 is maintained at 46-48 percent.