T-Mobile Smashes Records in Q3 2025: What Investors Need to Know
Highlights
- All-time best postpaid customer account growth
- Best-ever total postpaid net additions
- Over 1 million postpaid phone net additions, best Q3 in a decade
- Postpaid ARPA growth of 3.8% on an organic basis
- Postpaid service revenue grew by 12% YoY
- Service revenue as a whole grew by 9%
- Core adjusted EBITDA grew by 6%
- Service revenue to free cash flow conversion at 26%
- Raised total postpaid net additions guidance to 7.2M - 7.4M
- Fiber customer net additions guidance increased to 103,000
- Postpaid ARPA growth expected at least 3.5% for the full year
- Core adjusted EBITDA guidance increased by $300M
- Adjusted free cash flow guidance increased by $200M at the lower end
Investors looking into T-Mobile's Q3 2025 performance will find ample reasons to be optimistic. The company has announced several record-breaking figures for this quarter, reinforcing its position as a market leader in the telecommunications sector.
Unprecedented Customer and Financial Growth
T-Mobile has outdone itself this quarter with remarkable gains in customer acquisition and retention. The company set a new record for postpaid customer account growth and achieved its best-ever total postpaid net additions. Notably, T-Mobile added over 1 million postpaid phone net additions, marking the best third quarter performance in over a decade. This growth isn't just in volume but also value, as seen in the 3.8% rise in postpaid ARPA on an organic basis.
On the financial front, T-Mobile's postpaid service revenue saw a year-over-year growth of 12%, a figure that stands out sharply against industry norms. Overall service revenue increased by 9%, and core adjusted EBITDA grew by 6% from the previous year. Most strikingly, the company reported a conversion rate of 26% from service revenue to free cash flow, showcasing robust cash generation capacity.
Strategic Adjustments and Guidance Increases
Given these positive outcomes, T-Mobile has raised its guidance and expectations across multiple metrics. The total postpaid net additions guidance has been upgraded to a range of 7.2 million to 7.4 million. The company also increased its fiber customer net additions expectation to approximately 103,000 this year, demonstrating confidence in its broadband strategy.
Moreover, T-Mobile expects a postpaid ARPA growth of at least 3.5% for the full year, even when accounting for the dilutive impacts of recent acquisitions such as UScellular. Core adjusted EBITDA guidance has been increased by $300 million, and adjusted free cash flow guidance has seen a $200 million boost at the low end, reflecting a strong operational performance.
In summation, T-Mobile’s Q3 2025 results are a significant affirmation of its market strategy, customer acquisitions, and financial management acumen. Investors have ample reason to keep a close watch on T-Mobile as it continues to capitalize on its strengths in the competitive telecom landscape.