Summary
- Postpaid ARPA rose 2% to $152.91; postpaid net account additions fell 13% to 277,000 and account churn was 0.99%.
- Service revenue rose 8.9% to $18.983 billion and postpaid service revenue rose 12.6% to $15.853 billion.
- Net income was $3.239 billion, up 0.5%, and diluted EPS was $2.99, up 5.3%; the quarter included $146 million, or $0.14 per share, of after-tax UScellular merger-related costs including accelerated depreciation.
- Core Adjusted EBITDA rose 11.7% to $9.537 billion; it is a non-GAAP measure and is not a substitute for net income.
- T-Mobile raised 2026 operating-cash-flow guidance to $28.4 billion-$28.8 billion and Adjusted Free Cash Flow guidance to $18.4 billion-$18.8 billion, each $200 million higher at the midpoint.
T-Mobile’s account story is not a simple acceleration. It added 277,000 postpaid accounts, down from 318,000 a year earlier. Account churn rose from 0.92% to 0.99%. The total postpaid account base nevertheless reached 34.7 million, and the average account produced more monthly service revenue.
ARPA measures revenue per account, not per phone line or per subscriber. An account may contain several connections and services. At $152.91, it was 2% higher than a year earlier. The company is deepening value within the billing relationship even as the pace of new relationships slows.
That conversion appears in service revenue. Total service revenue rose 8.9% to $18.983 billion, while postpaid service revenue rose 12.6% to $15.853 billion. Total revenue, which also includes equipment and other items, was $22.791 billion.
Integration sits inside the GAAP result
Net income increased only 0.5% to $3.239 billion, while diluted EPS increased 5.3% to $2.99. T-Mobile says both include UScellular merger-related costs, including accelerated depreciation, with an after-tax effect of $146 million and $0.14 per share.
Core Adjusted EBITDA rose 11.7% to $9.537 billion. The measure removes interest, taxes, depreciation and amortisation, stock compensation and specified items, then excludes device lease revenue. It is useful for operating comparison but cannot be used to predict net income.
The gap shows who pays for consolidation timing. T-Mobile obtains network assets, accounts and revenue opportunities, but shareholders absorb accelerated depreciation and integration costs before every expected benefit is established. Customers may gain coverage or capacity, yet the quarter does not isolate how much revenue growth came from acquired assets versus organic expansion.
Cash guidance moved, capital spending did not
Operating cash flow rose 7.3% to $7.5 billion. Cash purchases of property and equipment, including capitalised interest, rose 12.8% to $2.703 billion. T-Mobile’s Adjusted Free Cash Flow calculation subtracts that cash capex from operating cash and reached $4.797 billion, 4.4% higher.
This is a company-defined non-GAAP cash measure, although its bridge is explicit. It does not make capital spending disappear; it places the spending directly in the calculation.
For 2026, T-Mobile raised operating-cash guidance from $28.1 billion-$28.7 billion to $28.4 billion-$28.8 billion. Adjusted Free Cash Flow guidance moved from $18.1 billion-$18.7 billion to $18.4 billion-$18.8 billion. Both midpoints rose $200 million.
The company kept Core Adjusted EBITDA guidance at $37.1 billion-$37.5 billion, postpaid net account additions at 950,000-1.05 million and cash capex at about $10 billion. It does not provide forward net-income guidance because volatile GAAP items cannot be forecast without unreasonable effort.
The raised cash ranges benefit debt capacity and shareholder distributions, but they also have to cover merger payments and network investment. The next quarter should be read through ARPA, account churn, service-revenue mix and the bridge from operating cash to capex. If value per account keeps growing without higher churn, T-Mobile can fund integration from a stronger customer base. If churn and capital intensity rise, the cash upgrade will have bought less durable growth.