T-Mobile's Q4 Earnings Beat Estimate on Solid Customer Growth

T-Mobile, US, Inc. TMUS reported impressive fourth-quarter 2024 results, with both the bottom and top lines surpassing the respective Zacks Consensus Estimate. This Bellevue, WA-based wireless service provider reported a top-line expansion backed by industry-leading postpaid customer growth.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.T-Mobile follows a multi-layer approach to 5G, with dedicated standalone 5G deployed nationwide across 600MHz, 1.9GHz and 2.5GHz bands.TMUS’ Net IncomeNet income in the fourth quarter was $2.98 billion or $2.57 per share, up from $2.01 billion or $1.67 per share in the year-ago quarter. The 48% year-over-year growth was primarily driven by top-line expansion. The bottom line exceeded the Zacks Consensus Estimate of $2.17.In 2024, TMUS reported a net income of $11.3 billion or $9.66 per share compared with $8.4 billion or $6.93 per share in 2023.T-Mobile US, Inc. Price, Consensus and EPS Surprise T-Mobile US, Inc. price-consensus-eps-surprise-chart | T-Mobile US, Inc. QuoteTMUS’ RevenuesNet sales during the quarter were $21.87 billion, up from $20.47 billion in the year-ago quarter, driven by solid growth in service and equipment revenues. The top line beat the consensus estimate of $21.17 billion.In 2024, TMUS generated a total revenue of $81.4 billion, up from $78.55 billion in 2023.Segment Results for TMUSTotal Service revenues were $16.92 billion, up from $16.04 billion in the year-ago quarter. The segment’s net sales marginally beat our revenue estimate of $16.75 billion. The 6% year-over-year growth was primarily driven by solid demand for postpaid services. Net sales from Postpaid Services contributed $13.5 billion in revenues, up 8.3% year over year.During the quarter, T-Mobile added 1.9 million postpaid net customers and 263,000 postpaid net accounts, both being the best in the industry. Postpaid phone net customer additions were 903,000, the best in the industry. The postpaid phone churn rate was 0.92%. High-speed Internet net customer additions were 428,000. Postpaid average revenues per account rose to $146.28 from $140.23 in the year-ago quarter.Net sales from Prepaid services were $2.68 billion, up from $2.43 billion in the year-earlier quarter. Prepaid net customer additions were 103,000, with a churn rate of 2.85%. Wholesale and other service revenues decreased to $738 million from $1.13 billion in the year-earlier quarter. Prepaid ARPU (average revenues per user) declined to $35.49 from $37.55 in the year-ago quarter.Equipment revenues were $4.69 billion, up from $4.17 billion in the year-ago quarter. The segment revenues beat our estimate of $4.05 billion. The improvement was primarily attributed to a higher average revenue per device sold, owing to an increase in the high-end phone mix.Other revenues were $245 million, down from the prior-year quarter’s tally of $261 million.Other Details for TMUSTotal operating expenses increased to $17.28 billion from $17 billion in the year-ago quarter. Operating income rose to $4.58 billion from $3.48 billion. T-Mobile recorded core adjusted EBITDA of $7.9 billion compared with $7.18 billion a year ago, backed by solid growth in service revenues.TMUS’ Cash Flow & LiquidityIn the December quarter, T-Mobile generated $5.54 billion of cash from operating activities compared with $4.85 billion in the prior-year quarter. Adjusted free cash flow was $4.08 billion, down from $4.3 billion in the year-earlier quarter. In 2024, the company generated $22.29 billion of cash from operating activities compared with $18.55 billion in the prior-year.As of Dec 31, 2024, the company had $5.4 billion in cash and cash equivalents, with $72.7 billion of long-term debt compared with respective tallies of $5.1 billion and 69.9 billion in 2023. During the quarter, it repurchased 20.3 million shares for $4.6 billion.TMUS’ OutlookFor 2025, the company expects postpaid net customer additions to be between 5.5 million and 6 million. Core adjusted EBITDA is estimated to be $33.1-$33.6 billion. It anticipates cash from operating activities within $26.8-$27.5 billion. TMUS expects adjusted free cash flow in the band of $17.3-$18 billion. Capital expenditure is projected to be around $9.5 billion.TMUS’ Zacks Rank & Stocks to ConsiderT-Mobile currently carries a Zacks Rank #5 (Strong Sell).Here are some better-ranked stocks that investors may consider.Keysight Technologies, Inc. KEYS has a Zacks Rank of 2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.In the last reported quarter, it delivered an earnings surprise of 5.10%. Keysight is expected to benefit from the growing proliferation of electronic content in vehicles, momentum in space and satellite applications and rising adoption of driver-assistance systems globally.InterDigital IDCC sports a Zacks Rank #1 at present. In the last reported quarter, it delivered an earnings surprise of 114.47%.It is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company designs and develops a wide range of advanced technology solutions used in digital cellular, wireless 3G, 4G and IEEE 802-related products and networks.Zillow Group, Inc. ZG carries a Zacks Rank #2 at present. In the last reported quarter, it delivered an earnings surprise of 9.38%. ZG delivered an earnings surprise of 25.47%, on average, in the trailing four quarters. The company is witnessing solid momentum in rental revenues, driven by growth in multi and single-family listings, which is a positive factor.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report InterDigital, Inc. (IDCC): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis Report Keysight Technologies Inc. (KEYS): Free Stock Analysis Report Zillow Group, Inc. 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