T-Mobile US, Inc.

Good morning. 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, then one. To withdraw your question, please press star, then two. You may also submit a question via X. by sending a post to at T-Mobile IR or at Srini Gopalan using cash tag TMUS. I would now like to turn the conference over to Kathy Yao, Senior Vice President of Investor Relations for T-Mobile US. Please go ahead.

Good morning. Welcome to T-Mobile's second quarter 2026 earnings call. Joining me on our call today is Srini Gopalan, our President and CEO Peter Osvaldik, our CFO, as well as other members of the leadership team. During this call, we will make forward-looking statements which involve risks and uncertainties that may cause actual results to differ materially. We encourage you to review the risk factors set forth in our SEC filing. Our earnings release, investors' factbook, and other documents related to our results, as well as reconciliations between GAAP and non-GAAP results discussed on this call, Srinivasan Gopalan

Thank you for watching. and it is of course well ahead of the competition. This differentiation is why we outgrow the industry time and time again and we did it again in Q2. In the wireless space, we continue to see a substantial opportunity of more than 20 million families and businesses who are network seekers and not yet with T-Mobile. With the best network in America, we have an unparalleled right to win with these customers. This quarter, the highest percentage ever of network-seeking prospects ranked T-Mobile number one on having an extremely reliable network and as a completely trusted brand. This is why we grew our postpaid share of households yet again. across every single cohort within the top 100 markets and also in smaller markets and rural areas. Let me double-click on smaller markets and rural areas. These markets represent 40% approximately of the population, and we have lots of room to run at this opportunity with just 24% total share of households. This opportunity is supercharged by our acquisition of US Cellular last year, and the integration is going great. Our share in T-Mobile for Business gives us that same kind of runway. This quarter, we continue to take share with a network superiority-led value proposition. Our nationwide 5G advanced network continue to drive new TAM creation through advanced network solutions, subsequently leading to traditional voice and broadband sales. And I'm also really excited to welcome Chris Sambar to T-Mobile as our Chief Enterprise Officer. Chris will be joining us in August. Turning now to broadband. It wasn't that long ago some competitors were calling 5G broadband cell phone internet. Today it's the most exciting evolution in broadband technology in a long, long time. It has consistently produced industry-leading growth, and we have so much more runway left here. André Almeida, Daniel Drobac, Jonathan Freier, Srinivasan Gopalan It's no wonder our 5G broadband offering leads the industry in customer experience, including winning JD Power's number one in customer satisfaction. That's also why we've consistently been the fastest growing ISP in the country, including in Q2. And this industry-leading growth has come with very healthy R2s. As we approach 2027 and 2028, There will be even more spectrum availability reflecting the stewardship of Chairman Carr and his commitment to American 6G leadership. This will unlock even greater capacity that will be deployed under our fallow capacity model. Putting it all together, our unmatched value proposition drove postpaid net account additions of $277,000 in Q2 alongside 2% ARPA growth year-over-year, a really strong result. We continue to bring new families and businesses to T-Mobile in a durable and profitable way, with CLVs in Q2 up healthy double digits over last year. In addition, port and ARPAs continue to exceed port-out ARPAs by approximately 20%. This is another highlight of our unrivaled value proposition, with over 60% of customers on new accounts selecting our premium plans. Our adjacencies, tea ads, and financial services continue to add incremental growth, leveraging our brand and ecosystem. I'm really excited to share that our T-Mobile Visa credit card launch was one of the most successful co-branded launches for Capital One, and we're on track to rank amongst Capital One's leading co-brand programs in terms of new accounts. Most importantly, we will not stop. We're not standing still. Our network keeps winning accolades from third-party providers, even as we continue to invest in it. Let me double-click into both. For the third straight time, we won the Best Mobile Network by Ookla. We also swept every single subcategory across OpenSignals, Quality of Experience, and Network Performance Awards, making us their most awarded mobile network over the last five years. In addition, P3, a global crowdsourced data benchmarking company using real people and real devices, awarded us the US Test Champion, sweeping the national benchmark for all 13 categories tested, including AI Services Champion. Turning now to our ongoing investments into our network, we continue to push the envelope of what's possible. In Q2, we rolled out live translation on beta, This is our first network-native AI application, embedding AI models directly into our core. Longer term, we believe our network will become the connective tissue for physical AI with inferencing at the edge. I am so excited by the opportunity here highlighting what a low-latency, high-capacity network can deliver. We continue to partner with key industry leaders here, including bigger AI. Our value, something we guard zealously, We continue to lead the industry while ensuring that customers are able to take advantage of America's best network. Our back book pricing remains a clear advantage to our differentiated growth strategy. We continue to abide by the more for more philosophy. One example of this is our recent initiative where we modernized legacy rate plans to ensure all of our customers can benefit from our great nationwide 5G advanced network. On customer experience, we're continuing to meet the customer where they want, while driving digital transformation to further enhance the experience. Ten years ago, we launched T-Mobile Tuesdays because we deeply believe that here at T-Mobile, we don't think customers should have to prove loyalty, but rather receive thankings from us just by being a customer. In June, we celebrated that milestone with Member Month, which was a tremendous success that truly underscored the spirit of the un-carrier. We rolled out many new member benefits and brought back old favorites from the Delta Premium in-flight beverage on us to free dash bars for a year to gas for $1.99 per gallon at select Shell gas stations. This drove record momentum in T-Life usage, and we ended the quarter with over 30 million monthly active users. Pulling it all together, this differentiation is what drives industry-leading financial growth. And we delivered, again, across every key metric in Q2. Postpaid service revenue, up 13%. Total service revenue, up 9%, both at multiples to our competition. Core adjusted EBITDA, up 12%, with industry-leading free cash flow margin of 25%. This is what this team does, deliver day in and day out. Our results speak for themselves, as you can see with our industry-leading NPS. What fuels that differentiation is the incredible future-proofed asset base we've built and our willingness to continue to invest to build it. And this is only just the beginning.