T-Mobile US, Inc.

Afternoon. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, please press star and then one. To withdraw your questions, please press star, then two. You may also submit a question via X by sending a post to at T-Mobile IR or at Mike Sievert using cash tag TMUS. I would now like to turn the conference over to Cathy Yao, Senior Vice President of Investor Relations for T-Mobile US. Please go ahead.

Good afternoon. Welcome to T-Mobile's third quarter 2024 earnings call. Joining me on our call today are Mike Sievert, our President and CEO, Peter Oswaldek, our CFO, as well as other members of the senior leadership team. During this call, we will make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially from our forward-looking statements. We provide a comprehensive list of risk factors in our SEC filings which I encourage you to review. Our earnings release, investor factbook, and other documents related to our results, as well as reconciliations between GAAP and non-GAAP results discussed on this call, can be found in the quarterly results section of the investor relations website. With that, let me now turn it over to Mike.

Okay, thanks, Kathy. Hi, everybody. Welcome to the Q3 call. We're coming to you from Bellevue today, and I'm joined by several members of our senior leadership team to talk about another outstanding quarter for T-Mobile. Now, given our recent capital markets day, Peter and I are going to keep our remarks pretty light so that we can get right to your questions. Before I get into our quarter, I do want to take a moment to recognize our team for their hard work around the clock to help our customers, fellow employees and communities to get back on their feet in the wake of hurricanes Helene and Milton. It was devastating to have back to back storms of this scale form in such rapid succession. But I am so proud of how our team showed up. From readiness to recovery, their tireless efforts and use of innovative technologies made a huge difference in affected communities. Okay, turning to the quarter. In short, it was a really strong one. In fact, Q3 is an example of the consistent execution we talked about a few weeks ago as a core enabler of our bold multi-year plan. As you know, achieving that plan is predicated on delivering strong results reliably and repeatedly to keep pace with our ambition. And we did just that in Q3, empowering us to raise our 2024 guidance yet again. I'll start with our mobile business. We delivered the best Q3 postpaid phone net ads in a decade, fueled by record low Q3 postpaid phone churn and continued year-over-year growth in gross ads. We also continued to lead the industry in share of switchers, and we grew share of households in both top 100 and smaller markets and rural areas. Our powerful combination of our best network, best value, and best customer experience continues to be a winning formula. We believe we have lots of room to run in our underpenetrated areas and segments, including among those who shop primarily on network attributes all across this country. Now, you heard us lay down some pretty audacious digitalization goals at our Capital Markets Day event, and we're making steady progress. I'm proud to share that our total digital mix of iPhone launch sales in Q3 is up 40% just year over year. And that for the first time, the majority of T-Mobile branded iPhone pre-orders this year were digital. This highlights the early progress we've already begun to make in further simplifying and digitalizing and transforming the customer buying experience. And it validates the appetite our customers have for buying online when they are given the option for a more seamless process. Our customer momentum also continues in broadband, where we delivered industry-leading net ads once again and reached a major milestone of 6 million customers in just three years. We're now halfway to our long-term target of 12 million customers by 2028. Our performance is fueled by our leading 5G network, which was recently awarded once again as having the best 5G availability in the world by OpenSignal. And our industry-leading technology will continue to further differentiate us as more and more new handsets come into the marketplace that can take advantage of our new technologies like voice over new radio, our incredible four-way carrier aggregation technology, and so many other things. Across the board, our team is doing awesome work to further extend our 5G network leadership for the benefit of customers. And they're noticing the superior speed, capacity, and consistency relative to our competition. Okay, moving on to our financials. In Q3, we once again demonstrated our ability to deliver profitable customer growth, which we translated to industry-leading service revenue growth, including year-over-year post-paid service revenue growth about 2x that of peers, driven by our highest ARPA growth in seven years as we continue to deepen customer relationships. Our core adjusted EBITDA growth of 9% led the industry by a wide margin. That, combined with our unparalleled capital efficiency, led once again to industry-leading free cash flow conversion. I said I'd keep it brief, so let me sum it up. Our formula for generating outsized value creation from focusing on smart and profitable growth continues to work really well. We have lots of runway ahead of us to continue to deliver profitable, industry-leading growth as we drive forward on the ambitious plan we shared with you last month.