T-Mobile USA Inc 5.5 % Notes 2025-01.06.70

Q3 performance: strong unit + financial outperformance (supports raised confidence going forward) - Led industry in postpaid phone net additions and 5G broadband net additions, translating to +274k postpaid net account adds. - Postpaid ARPA up >4% YoY; 5G broadband ARPU grew both YoY and sequentially. - Financial growth: Postpaid service revenue +9% YoY, total service revenue +6%, core adj. EBITDA +11%, and adjusted free cash flow (FCF) margin of 26%. - Management framed results as “best value, best network, best experience” execution.

Outlook / guidance for full-year 2026: accounts up ~1M; service growth +8%; margin/FCF improved - Account outlook: expect ~1.0 million net account additions for the year (again, “far exceeding industry”). - Service revenue: now guiding ~$76.8B total service revenue (~8% growth YoY). - Postpaid ARPA: raised to ~3.5% growth (from prior ~2.5% to 3%), driven by premium-rate adoption + rate plan modernization + stronger customer relationships. - Q4 postpaid organic service revenue: guided ~7% YoY. - EBITDA: core adj. EBITDA $37.35B–$37.45B (midpoint +$100M vs prior guide). - Capex: ~$10B full-year (unchanged). - Adjusted FCF: $18.7B–$18.8B (midpoint +$150M vs prior guide).

Customer/value strategy: “T-Mix” and app-led engagement; ARPA strength seen as adoption + mix, not just promos - Maintains “back book vs front book” pricing advantage (existing customers pay less on average than new customers). - Launched T-Mix to address customer desire for more control over plan benefits (survey: 84% want control; customers can choose/change benefits as needs change). - T-Life momentum: 32M monthly active users (up from 30M in June); >80% of upgrades and ~half of phone line activations completed digitally via app ecosystem in Q3. - Management emphasized ARPA drivers include premium rate plan adoption, deepening relationships, and higher port-in ARPUs (~20% higher than port-out).