T-Mobile US reports record Q1 earnings and subscriber growth

Overview

T-Mobile delivered a record-breaking first quarter of 2025, marked by industry-leading customer growth and strong financial performance. The company reported its best-ever Q1 for postpaid net customer additions and achieved significant profitability milestones.

CEO Mike Sievert stated: “A record number of customers chose the Un-carrier in Q1 – we grew postpaid gross additions year-over-year across the board and our High Speed Internet business led the industry in net customer additions for the 13th straight quarter. And all of this customer growth drove fantastic financial growth with strong net cash provided by operating activities and our highest-ever Q1 Adjusted Free Cash Flow. This is a great start to 2025, and we’re excited about what’s to come as we continue to deliver innovative experiences, our best-in-class network, and unmatched value to customers.”

Q1 2025 vs. Q1 2024:

The company had postpaid net customer additions of 1.3m (+117,000 YoY), the best ever Q1, driven by T-Mobile’s industry-leading 5G availability, network quality improvements, and successful differentiation via value-added services like T-Satellite and High-Speed Internet.
Also, the company had High-Speed Internet net adds of 424,000 (13th consecutive quarter leading the industry), led by strong fixed wireless momentum, expanding rural coverage, and ongoing improvements to T-Mobile’s 5G home internet offering.
Total service revenue increased to $16.9bn (+5% YoY), driven by growth in both postpaid phone and high-speed internet subscribers, alongside steady ARPU performance and increased customer retention.
- Postpaid service revenue recorded a value of $13.6bn (+8% YoY), boosted by record postpaid net additions, and supported by low churn and high-quality customer base growth.
Total revenues grew to $20.9bn (+6.6% YoY), driven by service revenue growth and partially supported by increased device revenues as a result of new customer activations.
Net income rose to $3.0bn (+24% YoY), driven by top-line growth, disciplined cost structure, and higher profitability from scale and customer mix.
Diluted EPS had a record value for Q1, reaching $2.58 (+29% YoY), boosted by increased net income and reduced share count from ongoing repurchase activity.
Core Adjusted EBITDA also increased to $8.3bn (+8% YoY), benefiting from service revenue growth, scale efficiencies, and improved operational performance.
Adjusted free cash flow had a record value of $4.4bn (+31% YoY), driven by higher EBITDA, capital efficiency, and optimized working capital, reflecting strong execution across network and customer operations.
Net cash from operations rose to $6.8bn (+35% YoY), led by improved profitability and strong receivables performance, combined with lower device subsidy outflows.
Total net customer additions were 1.4m (vs. 1.2m in Q1 2024), driven by strong postpaid and broadband momentum, increased rural penetration, and continued network leadership recognized by third parties (such as Opensignal or RootMetrics).
Total customer base was 130.9m, expanded due to consistent performance across postpaid, prepaid, and high-speed internet segments, reflecting T-Mobile’s appeal to both urban and underserved markets.
Postpaid phone ARPU was $49.38 (slightly down QoQ), modestly pressured by promotional activity and plan mix, offset partially by upsell into premium services and growing device attachment.
Prepaid net adds had a value of 45,000 (vs. -48,000 in Q1 2024), with improved churn (2.68%), driven by better customer retention, lower churn, and refreshed prepaid offerings that increased competitiveness in key markets.
Postpaid churn was 0.91% (slightly higher YoY), attributed to seasonal device upgrade cycles and ongoing competition, although churn remains low by industry standards thanks to strong network and customer service metrics.
In Q1 2025, T-Mobile returned a total of $3.5bn to stockholders, including $2.5bn in share repurchases and $1.0bn in dividend payments. Since the launch of its capital return program, the company has delivered $34.8bn in total shareholder value – comprising $29.8bn in buybacks and $5.1bn in dividends, highlighting its strong commitment to disciplined capital allocation.

T-Mobile updated its full-year 2025 outlook, maintaining its record-high guidance for postpaid net customer additions at 5.5m to 6.0m, reflecting continued confidence in subscriber growth. The company raised its Core Adjusted EBITDA forecast to a range of $33.2bn to $33.7bn, up $100m at the midpoint, and increased its expected net cash from operations to $27.0bn to $27.5bn, from a previous estimate of $26.8bn. Adjusted free cash flow guidance was also lifted to $17.5bn to $18.0bn, up $200m at the midpoint. Capital expenditures are expected to remain steady at approximately $9.5bn, as T-Mobile continues investing in its 5G leadership while delivering strong financial returns.

Despite the fact that the results reported for the first quarter of 2025 broke records for the company and were also mainly above the estimates of Wall Street analysts, TMUS’s share price decreased by more than -5% in post-market trading, and thus it returned to the area below the 50-day moving average, after an extremely volatile April. However, since the beginning of the year, TMUS’s stock price still remains quite appreciated, increasing by more than +19% by the time of writing this article, a sign that the company was not necessarily affected by the reciprocal tariffs imposed globally. However, this rather surprising trend reversal could raise some question marks for some investors in the immediate future.