TMUS T-Mobile US 10-Q 2026-09-30 section summaries

T-Mobile US — Q3 and nine months ended September 30, 2026

Consolidated results

Amounts in billions, except per-share data.

Q3 revenue grew 7.4%, led by postpaid and equipment, while prepaid and wholesale/other service revenue declined. Net income rose 27.3% in Q3, versus 3.5% for 9M; higher equipment costs, bad-debt expense ($437M versus $337M in Q3) and interest costs were offsets. T-Mobile’s sole operating segment is Wireless; the CEO evaluates it using net income, shown above.

Cash flow and investment

Nine-month financing cash used increased to $16.470B from $8.250B, including $9.138B of debt repayments and $9.564B of common-stock repurchases. Investing cash flow was positive $358M in Q3, including $2.927B of asset-sale proceeds, compared with $10.139B used in Q3 2025; 9M investing cash used was $5.543B versus $15.107B. Cash, including restricted cash, was $6.026B at September 30, 2026, versus $5.976B at year-end 2025.

Balance sheet, debt and shares

Tangible common equity, calculated as equity less goodwill and other intangible assets, was negative $60.404B. Q3 began with 1,074,817,571 shares; weighted-average diluted shares were 1,071,630,434 for Q3 and 1,085,476,683 for 9M, down from 1,126,627,708 and 1,136,920,521, respectively, in 2025. Debt carrying value exceeded estimated fair value of $74.412B at quarter-end. The $10B revolving facility, maturing in 2031, had no borrowings and carries a 4.5x leverage-ratio maintenance covenant. A separate $1B floating-rate borrowing remained outstanding.

Credit exposure, spectrum and capital allocation

Net EIP receivables were $6.987B at September 30, down from $7.680B at year-end; the balance included a $370M credit-loss allowance. Nine-month bad-debt expense increased to $1.261B from $925M, and write-offs rose to $1.246B from $930M. EIP write-offs were $656M. Receivable-sale programs provided $1.3B of EIP funding and $775M of service-receivable funding; recourse-guarantee liabilities were $137M. The arrangements leave T-Mobile with servicing and credit exposure, and their losses were $52M for 9M, versus $58M.

Spectrum licenses rose to $99.980B, including $2.478B of acquisitions. In August, T-Mobile exchanged 800 MHz licenses for $2.9B cash and Grain’s 600 MHz licenses valued at $690M; it expects about $850M of related cash taxes and may receive half of qualifying future monetization proceeds. A post-quarter agreement by Grain to sell the licenses to SpaceX remains subject to approvals. T-Mobile also won 102 AWS-3 licenses for $278M and agreed to acquire 600 MHz licenses for $290M.

The 2026 stockholder-return authorization was increased to $18.2B. In 9M, T-Mobile repurchased 48.372M shares for $9.5B and paid $3.3B in dividends; $5.4B remained authorized at quarter-end. From October 1–23, it repurchased 4,987,500 shares for $791M. The quarterly dividend increased to $1.17 per share from $1.02.

Business actions, obligations and risks

T-Mobile completed the UScellular wireless acquisition in August 2025 for $2.770B cash plus replacement equity awards; acquired assets included $1.730B of spectrum licenses and $206M of goodwill. Integration is intended to generate savings through network, facilities, personnel and systems consolidation. The company recorded $214M of UScellular-related restructuring expense in 9M 2026, plus $321M of accelerated lease expense and $242M of accelerated depreciation. Network restructuring, workforce transformation and retail initiatives also incurred costs; substantially all UScellular costs are expected by fiscal year-end 2027. Tower financing obligations were $3.419B, with effective rates of 11.6% for existing CCI arrangements and 5.3% for acquired arrangements.

T-Mobile invested $671M for a 50% interest in the i3 Broadband fiber venture on October 1, 2026, and expects to invest approximately $2.0B for a 50% interest in another fiber venture, expected to close in H1 2027. On October 9, it satisfied the $420M Ka’ena earnout with $164M cash and 1,510,371 shares.

The company faces ongoing regulatory inquiries and litigation, including matters related to customer-data incidents and the Sprint merger. The 2021 cyberattack settlement involved $350M paid for claims, legal fees and administration and $150M spent on data security; separate government inquiries continue, and additional losses are possible. Missed Sprint merger commitments could also result in penalties.

T-Mobile US (TMUS) — Q3 and nine months ended September 30, 2026

Consolidated results

Revenue increased 7% in Q3 and 9% for 9M. Postpaid growth reflected higher average accounts—including acquired UScellular and Metronet accounts in Q3, and Lumos accounts in the 9M comparison—and higher ARPA. Prepaid revenue declined amid fewer average customers and promotional and rate-plan mix pressure. Wholesale revenue was lower mainly because of reduced MVNO revenue, including DISH and TracFone. Equipment revenue benefited from device and liquidation revenue, premium-device mix and higher manufacturer pricing, partly offset by fewer devices sold.

Q3 operating income rose 25% and net income 27%; for 9M they increased 8% and 3%, respectively. Higher equipment costs reflected device costs, liquidations and premium mix. Service costs increased with network access, acquired fiber installation-fee amortization, repairs, UScellular-related costs and 5G site costs. Nine-month SG&A rose 5%, including merger, bad-debt, advertising and retail-initiative costs, and comparison against a prior-year $151 million spectrum-sale gain. Depreciation and amortization rose 10% for 9M, reflecting acquired assets, 5G build-out and accelerated depreciation. Q3/9M 2025 operating expenses included a $278 million software-impairment charge, with none in 2026.

Net interest expense was $1.031 billion versus $924 million in Q3 and $3.117 billion versus $2.762 billion for 9M, reflecting higher average debt and rates and lower interest income. The effective tax rate was 23.9% versus 23.1% in Q3 and 24.6% versus 23.7% for 9M. Adjusted EBITDA is non-GAAP; its adjustments include merger, restructuring, legal, impairment and other special items. Nine-month 2026 adjustments included $717 million of UScellular merger costs, $166 million of network restructuring costs and $470 million of other net costs, including workforce and retail charges.

Operating metrics

Account additions fell 31% in Q3 and 16% for 9M. Higher deactivations—particularly among higher-churn broadband-only accounts—rate-plan modernization and industry switching weighed on additions; acquired fiber accounts helped offset the 9M decline. ARPA growth was driven by fee revenue, tax-and-fee-exclusive plans, plan modernization and more customers per account, partly offset by promotions and bundled offers.

Cash flow and investment

Q3 operating cash flow declined as working-capital outflows increased $592 million, partly offset by higher adjusted income; 9M cash flow improved as adjusted income increased $1.4 billion, partly offset by $681 million more working-capital outflows. Q3 investing cash flow included $2.9 billion of 800 MHz spectrum-sale proceeds. Nine-month financing uses included $9.5 billion of stock repurchases, $9.1 billion of debt repayments and $3.3 billion of dividends, partly offset by $6.9 billion of net debt issuance proceeds. Adjusted free cash flow increased 5% in both periods; Q3’s increase primarily reflected the timing of lower capital spending. Capital spending supports nationwide 5G expansion and UScellular integration.

Strategic developments, liquidity and risks

T-Mobile completed its UScellular wireless-business acquisition on August 1, 2025, for $2.8 billion cash and exchanged UScellular senior notes with $1.7 billion aggregate outstanding principal for T-Mobile notes with matching terms. UScellular merger-related costs were $129 million in Q3 and $959 million for 9M, compared with $73 million and $120 million. Net cash payments were $164 million and $420 million, respectively. T-Mobile expects $1.2 billion in annual run-rate synergies—$950 million of operating-expense and $250 million of capital-expenditure savings—against $2.6 billion of estimated costs to achieve. Most costs and payments are expected by year-end 2027.

T-Mobile is expanding residential fiber through 50%-owned joint ventures: Lumos ($932 million invested, with about $500 million of further contributions expected in 2027–2028) and Metronet ($4.6 billion invested). After quarter-end it invested $671 million in i3 Broadband; a GoNetspeed/Greenlight joint venture is expected to close in the first half of 2027, with an expected T-Mobile investment of about $2.0 billion. T-Mobile owns the customer relationship and sells service under its brand, while the ventures are equity-method accounted. It also acquired Vistar for $621 million and Blis for $180 million in 2025. After quarter-end, it settled a $420 million Ka’ena earnout with $164 million cash and 1,510,371 shares.

In August 2026, T-Mobile sold its 800 MHz licenses for $2.9 billion cash plus Grain 600 MHz licenses valued at $690 million. It expects about $850 million of cash income taxes, primarily through 2027, and may receive 50% of qualifying future proceeds from Grain’s monetization; no gain was recognized for that contingent consideration. It won 102 AWS-3 licenses for $278 million and acquired additional 600 MHz licenses for $290 million, payable in Q1 2027.

At September 30, cash and equivalents were $5.6 billion and total debt and financing-lease liabilities were $86.0 billion, excluding tower obligations. Its $10.0 billion revolver and $2.0 billion commercial-paper program were undrawn, and it was compliant with restrictive debt covenants. It had derecognized $1.7 billion of net receivables through revolving receivable sales. Management expects principal funding sources to cover anticipated operating liquidity needs, but additional funding may be sought for spectrum, investments, capital returns or refinancing. Capital expenditures are expected to remain at 2025 levels in 2026.

The 2026 stockholder-return authorization was increased to $18.2 billion through year-end. For January 2026 through end-2027, the business plan supports up to about $30.0 billion for repurchases and dividends, plus a flexible allocation exceeding $22.0 billion for potential deleveraging, investment or additional returns. T-Mobile repurchased 48,372,465 shares for $9.5 billion in 9M and paid $3.3 billion in dividends; up to $5.4 billion remained under the program at September 30. From October 1–23, it repurchased another 4,987,500 shares for $791 million.

Key risks include competition, spectrum availability and regulation, cyber and service disruptions, execution of network and digital initiatives, supplier costs and disruption, regulatory and legal exposure, and substantial debt-service needs. Integration and restructuring costs, including UScellular costs that may exceed estimates, could adversely affect results. T-Mobile, AT&T and Verizon formed a spectrum-sharing venture in September to support satellite-based direct-to-device coverage; its formation had no material financial-statement impact.

*Non-GAAP measures.

Market Risk

As of September 30, 2026, T-Mobile had €7.3 billion of EUR-denominated Senior Notes exposed to foreign-exchange fluctuations. Cross-currency swap agreements designated as fair value hedges mitigate foreign-currency transaction gains and losses on this debt.

Other market risks include changes in interest rates, investment yields and credit spreads, which can affect the company’s cost of capital. T-Mobile monitors interest-rate sensitivity across its debt portfolio and does not expect significant changes to its market-risk management strategy in the near term.

Disclosure Controls and Internal Control

The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the Form 10-Q period. No changes in internal control over financial reporting during the most recently completed fiscal quarter materially affected, or were reasonably likely to materially affect, those controls.

T-Mobile began implementing a new global ERP system in Q2 2025. The phased deployment is expected to take several years and replace many operating and financial systems. The company expects the system to strengthen financial-record maintenance, integrate billing and supply-chain functions, improve data analysis, and accelerate management reporting. The transition may change processes and procedures and could affect internal controls; T-Mobile will assess quarterly whether any changes have a material impact.

The Sarbanes-Oxley Section 302 certifications were filed as Exhibits 31.1 and 31.2.

Cybersecurity risk

T-Mobile reports no material changes to its previously disclosed risk factors other than an expanded discussion of cybersecurity. The company faces persistent, evolving attacks aimed at customer, employee, supplier, and corporate information and systems—including its wireless network and third-party cloud, software-as-a-service (SaaS), and other services. Threats include credential theft, social engineering, insider access, ransomware, and denial-of-service attacks. Attackers include nation-state-sponsored actors and others who may operate where law enforcement is ineffective.

T-Mobile may not identify vulnerabilities or install patches before attackers exploit them. Third- and fourth-party providers add exposure because T-Mobile does not control their security systems and may not be able to assess their safeguards. Acquired businesses may also have vulnerabilities or less-developed security practices. Strengthening defenses takes significant resources and management attention, and insurance may not adequately cover resulting losses or disruption.

The filing identifies artificial intelligence as an emerging cybersecurity risk: threat actors may use increasingly sophisticated AI to find and exploit vulnerabilities faster, evade controls, and reduce the time available to patch systems. Rapid remediation can itself disrupt operations or destabilize systems, and integrating AI may introduce additional risks. T-Mobile expects attacks against both the company and its providers to continue. A significant incident could harm operations, reputation, financial condition, cash flows, and results.

T-Mobile previously disclosed cyberattacks in August 2021 and January 2023 and incurred significant costs responding to and resolving mass-arbitration claims, class-action lawsuits, and an FCC investigation. It also reports other unrelated, non-material incidents involving unauthorized access. These have often involved customer phone-line takeover fraud or exposure of customer information—including payment and financial data, Social Security numbers, and passwords—and some involved third-party providers or retail and customer-service partners.

For the three months ended September 30, 2026, no Company director or officer adopted, modified, or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement. This section reports no financial or business developments.