T-Mobile US, Inc.

Good 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, 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 hashtag 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 2026 earnings call. Joining me on our call today are Srini Gopalan, Peter Osvaldik, Jessica Yule, 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. Thanks, Cathy, and good afternoon, everyone.

We're here in Bellevue today, very much looking forward to discussing our results. But first, I'd like to welcome two new faces at the table, Jessica Yule, CFO Designate, and Chris Sambar, Chief Enterprise Officer. Jessica and Chris bring tremendous talent and experience to this leadership team, and I'm thrilled to have them join us, and I'm looking forward to all of you getting to know them very well. Turning to Q3, This was another great quarter of executing on our strategy, and it reflects our ability to optimize both volume and value to deliver industry-leading results. In Q3, we once again led the industry in postpaid phone net additions and 5G broadband net additions, both of which helped translate to strong postpaid net account additions of 274,000. Alongside this importantly, we saw over 4% postpaid ARPA growth year over year. We also saw 5G broadband ARPU grow year over year and sequentially in Q3. These strong unit results translated to industry-leading financial growth. Postpaid service revenue grew 9%, total service revenue 6%, core adjusted EBITDA 11%, and we reported a really strong adjusted free cash flow margin of 26%. Now, what underlies all of this is our unique proposition of best value, best network, best experience. So let me double-click into that. From a value standpoint, this is something we continue to guard zealously. We're maintaining our unique back book to front book pricing advantage, which is that on average, our existing customers actually pay less than our new customers. We do not, however, take our best value position for granted. Earlier this week, we launched our TMix portfolio, the latest example of disruption by solving customer pain points. For far too long, carriers have chosen how customers get value. 84% of surveyed customers want more control of how their wireless plans are structured. And T-Mix is smashing through this pain point by allowing customers to choose what benefits they want and allowing them to change them when their needs change. On customer experience, we're leveraging our amazing team empowered with digital and AI tools to deliver a best-in-class experience. Last quarter, we shared with you that the customer excitement around member month drove us to over 30 million monthly active users of TLIFE. That was in June. That momentum continued throughout Q3, and TLIFE now has 32 million monthly active users. As a result, more and more of our transactions are being done directly in the app ecosystem. In Q3, over 80% of our upgrades and half of our phone line activations were done digitally between customers using the app on their own or being guided through it by our associates. Now, underpinning both value and experience is, of course, our network, which positions us for outsized growth for the next decade and beyond. We have the industry's best network, both through the lens of real, tangible, lived customer experiences, as well as recognized through third-party awards. Our overall median speeds are approximately 60% to 70% faster than our two largest competitors based on nuclear data. And the awards, they just keep coming. Among many this quarter, OpenSignal awarded us the global winner in 5G coverage. In fact, T-Mobile has been named an OpenSignal 5G global winner every year the program has existed. And no other US operator has ever been named a 5G global winner. Our margin of network leadership will continue to widen through our unreplicable spectrum holdings and our focus on leadership and innovation. Talking of innovation, we completed the world's first AI RAM call here in Bellevue, not in the lab, but out there in the real world using our network. We also continue to see more proof points in the physical AI opportunity, where we've progressed beyond connecting humanoid robots with eSIMs and are now testing how the network helps deliver the intelligence itself. To enable all of these use cases, we're partnering with Amazon Web Services, AWS, to build the first instances of our Kinetic Edge. Now, Kinetic Edge is a distributed intelligence infrastructure for physical AI. It combines our nationwide 5G advanced network and distributed edge with AWS's cloud orchestration and AI services. This puts together deterministic connectivity, compute, and intelligence closer to the machines and gives enterprises exactly what they need to take physical AI from isolated demos to production at scale. Let me now turn to how we're monetizing our unique capability to deliver the best network, best value, and best experience. In wireless, The consistent improvement in our network perception year over year and our heritage of value and experienced leadership allowed us to once again grow our share of postpaid households across the top 100 and in smaller markets and rural areas. T-Mobile for Business, now under Chris' stewardship, continues to flourish as we bring customers technology solutions powered by America's best network. Q3 marked the 17th straight quarter of positive ports, contributing to healthy, double-digit revenue growth year over year. And in the quarter, J.D. Power named us the most awarded business for business wireless customer satisfaction, as well as number one in both large enterprise and small business customer satisfaction. This is an incredible accomplishment and a testament to the power of our network, our brand, and our value. Governments and enterprises today are not only rigorously testing networks, but also focusing on how new network capabilities can solve their business needs before they make the buying decision. We recently won the top spot in the Department of Justice's wireless purchasing contract. As one of the largest public safety agencies in America, the DOJ is an incredibly discerning buyer. They've spent hours of testing, hundreds of hours of testing, and evaluating our network against others before they chose the best public safety network in America. This is again proof that we're growing our TFB presence with large and influential customers. Broadband, another key component of our growth portfolio. Our 5G broadband offers near fiber-like download speeds over Wi-Fi, seamless setup, and an award-winning customer experience. Ookla once again ranked us as the fastest 5G broadband provider for both upload and download speeds. It's no wonder our 5G broadband customers continue to have the highest NPS of any broadband connectivity category, and that includes fiber. We're tracking well ahead of the pace we set for you to reach 15 million customers by the end of the decade. Importantly, in addition, our phone-like ARPUs in FWA have grown on a year-over-year and sequential basis. Our fiber business is also scaling well with approximately 20% 12-month penetration and a sequential and year-over-year acceleration in customer growth. We're well on track towards our target of 3 to 4 million customers by 2030. To conclude, the environment we're operating in has been dynamic for quite some time. But through it all, this team right here is laser-focused on delivery, execution, and controlling our controllables. We're incredibly confident in our differentiation, consistently leading to outsized growth today and in the future.