Item 2. Management’s Discussion and Analysis
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q (“Form 10-Q”) of T-Mobile US, Inc. (“T-Mobile,” “we,” “our,” “us” or the “Company”) includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “could” or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. The following important factors, along with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, and Part II, Item 1A of this Form 10-Q, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:
• competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity;
• criminal cyberattacks, disruption, data loss or other security breaches;
• our inability to timely adopt and effectively deploy network technology developments;
• our inability to effectively execute our digital transformation and drive customer and employee adoption of emerging technologies;
• our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;
• system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems;
• the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use;
• the timing and effects of any pending and future acquisition, divestiture, investment, joint venture or merger involving us, including our inability to obtain any required regulatory approval necessary to consummate any such transactions or to achieve the expected benefits of such transactions;
• adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in inflation or interest rates, tariffs and trade restrictions, supply chain disruptions, fluctuations in global currencies, immigration policies, and impacts of geopolitical instability, such as the Ukraine-Russia and Israel-Hamas wars and further escalations thereof;
• potential operational delays, higher procurement and operational costs, and regulatory and compliance complexities as a result of changes to trade policies, including higher tariffs, restrictions and other economic disincentives to trade;
• our inability to successfully deliver new products and services;
• any disruption or failure of our third parties (including key suppliers) to provide products or services for the operation of our business;
• sociopolitical volatility and polarization and risks related to environmental, social and governance matters;
• our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms;
• changes in the credit market conditions, credit rating downgrades or an inability to access debt markets;
• our inability to maintain effective internal control over financial reporting;
• any changes in regulations or in the regulatory framework under which we operate;
• laws and regulations relating to the handling of privacy, data protection and artificial intelligence;
• unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings;
• difficulties in protecting our intellectual property rights or if we infringe on the intellectual property rights of others;
• our offering of regulated financial services products and exposure to a wide variety of state and federal regulations;
• new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations;
• our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked;
• our exclusive forum provision as provided in our Certificate of Incorporation;
• interests of Deutsche Telekom AG (“DT”), our controlling stockholder, which may differ from the interests of other stockholders;
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• our current and future stockholder return programs may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value; and
• future sales of our common stock by DT and SoftBank Group Corp. (“SoftBank”) and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the Federal Communications Commission (“FCC”).
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
Investors and others should note that we announce material information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We intend to also use certain social media accounts as a means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR X account (https://x.com/TMobileIR), the @MikeSievert X account (https://x.com/MikeSievert) and our Chief Executive Officer’s LinkedIn account (https://www.linkedin.com/in/sievert), both of which Mr. Sievert also uses as a means for personal communications and observations, and the @TMobileCFO X account (https://x.com/tmobilecfo) and our Chief Financial Officer’s LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr. Osvaldik also uses as a means for personal communication and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.
Overview
The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our condensed consolidated financial statements with the following:
• A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
• Context to the condensed consolidated financial statements; and
• Information that allows assessment of the likelihood that past performance is indicative of future performance.
Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2025, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024. Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc. and its consolidated subsidiaries.
Sprint Merger-Related Costs
As of June 30, 2024, we have incurred substantially all restructuring and integration costs associated with our merger (the “Sprint Merger”) with Sprint Corporation (“Sprint”) and, accordingly, no longer separately disclose Sprint Merger-related costs. The cash payments for the Sprint Merger-related costs incurred extend beyond 2025 and primarily relate to operating leases for which we have recognized accelerated lease expense.
Sprint Merger-related costs were excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA for the three months ended March 31, 2024, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See “Adjusted EBITDA and Core Adjusted EBITDA” in the “ Performance Measures ” section of this MD&A.
Net cash payments for Sprint Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows and our calculation of Adjusted Free Cash Flow and were $61 million and $293 million for the three months ended March 31, 2025 and 2024, respectively.
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Joint Ventures
On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, Infrastructure VI fund (“Fund VI”), to establish a joint venture between us and Fund VI to acquire Lumos (“Lumos”), a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III. Subsequent to March 31, 2025, on April 1, 2025, we completed the joint acquisition of Lumos, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. At closing, we invested $926 million to acquire a 50% equity interest in the joint venture and fiber customers. The funds invested by us will be used to fund future fiber builds. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028 under the existing business plan.
On July 18, 2024, we entered into a definitive agreement with KKR & Co. Inc. (“KKR”) to establish a joint venture to acquire Metronet Holdings, LLC and certain of its affiliates (collectively, “Metronet”), a fiber-to-the-home platform. This arrangement is expected to close in mid-2025, subject to customary closing conditions and regulatory approvals. At closing, we expect to invest approximately $4.9 billion to acquire a 50% equity interest in the joint venture and all existing residential fiber customers, as well as funding of the joint venture. We do not anticipate making further capital contributions following the closing under the existing business plan.
The joint ventures will focus on market identification and selection, build plans, network engineering and design, network deployment, and customer installation, with us owning customer relationships and selling fiber service under the T-Mobile brand. We expect to account for the Lumos and Metronet joint ventures under the equity method of accounting and recognize Service revenues for the acquired Lumos and Metronet fiber customers and wholesale costs paid to the joint ventures for network access within Cost of services on our Condensed Consolidated Statements of Comprehensive Income.
Acquisition of Ka’ena Corporation
On May 1, 2024 (the “Ka’ena Acquisition Date”), we completed the merger with Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile (the “Ka’ena Acquisition”). The total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable on August 1, 2026. On the Ka’ena Acquisition Date and in satisfaction of the upfront payment, we transferred $420 million in cash and 3,264,952 shares of T-Mobile common stock valued at $536 million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $956 million. A portion of the upfront payment made on the Ka’ena Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena. The amount of the upfront payment was subject to customary adjustments, and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum payable in satisfaction of the earnout.
Based on the adjusted amount paid upfront, up to an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout, dependent upon Ka’ena’s achievement of specified performance indicators.
Prior to the Ka’ena Acquisition, Ka’ena was a wholesale partner of the Company for which we recognized service revenues within Wholesale and other service revenues. Upon the closing of the Ka’ena Acquisition, this relationship was effectively terminated, and the Company acquired Ka’ena’s prepaid customer relationships and began to recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income subsequent to the Ka’ena Acquisition Date.
For more information regarding the Ka’ena Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of UScellular Wireless Operations
On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC, pursuant to which, among other things, we will acquire substantially all of UScellular’s wireless operations and select spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through an exchange offer to certain UScellular debtholders prior to closing (the “UScellular Merger”). To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular, and the cash portion of the purchase price will be correspondingly increased. The transaction is expected to close in mid-2025, subject to customary closing conditions and receipt of certain regulatory approvals. Upon closing of the transaction, we expect to account for the UScellular transaction as a business combination and to
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consolidate the acquired operations. We expect this transaction will yield approximately $1.0 billion in total annual run rate cost synergies, including operating expense and capital expenditure synergies, upon integration, with total cost to achieve the integration currently estimated at between $2.2 billion to $2.6 billion.
For more information regarding our acquisition of UScellular’s wireless operations, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Vistar Media Inc.
On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc. (“Vistar”), a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”).
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $621 million.
For more information regarding the Vistar Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Blis Holdco Limited
On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100% of the outstanding capital stock of Blis Holdco Limited (“Blis”), a provider of advertising solutions (the “Blis Acquisition”).
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $180 million.
For more information regarding the Blis Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
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Results of Operations
Set forth below is a summary of our consolidated financial results:
Three Months Ended March 31, Change
(in millions) 2025 2024 $ %
Revenues
Postpaid revenues $ 13,594 $ 12,631 $ 963 8 %
Prepaid revenues 2,643 2,403 240 10 %
Wholesale and other service revenues 688 1,062 (374) (35) %
Total service revenues 16,925 16,096 829 5 %
Equipment revenues 3,704 3,251 453 14 %
Other revenues 257 247 10 4 %
Total revenues 20,886 19,594 1,292 7 %
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,602 2,688 (86) (3) %
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 4,798 4,399 399 9 %
Selling, general and administrative 5,488 5,138 350 7 %
Depreciation and amortization 3,198 3,371 (173) (5) %
Total operating expenses 16,086 15,596 490 3 %
Operating income 4,800 3,998 802 20 %
Other expense, net
Interest expense, net (916) (880) (36) 4 %
Other (expense) income, net (46) 20 (66) (330) %
Total other expense, net (962) (860) (102) 12 %
Income before income taxes 3,838 3,138 700 22 %
Income tax expense (885) (764) (121) 16 %
Net income $ 2,953 $ 2,374 $ 579 24 %
Statement of Cash Flows Data
Net cash provided by operating activities $ 6,847 $ 5,084 $ 1,763 35 %
Net cash used in investing activities (3,409) (1,787) (1,622) 91 %
Net cash provided by (used in) financing activities 3,193 (1,666) 4,859 (292) %
Non-GAAP Financial Measures
Adjusted EBITDA $ 8,259 $ 7,652 $ 607 8 %
Core Adjusted EBITDA 8,258 7,617 641 8 %
Adjusted Free Cash Flow 4,396 3,347 1,049 31 %
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The following discussion and analysis is for the three months ended March 31, 2025, compared to the same period in 2024, unless otherwise stated.
Total revenues increased $1.3 billion, or 7%. The components of these changes are discussed below.
Postpaid revenues increased $963 million, or 8%, primarily from:
• Higher postpaid ARPA. See “Postpaid ARPA” in the “ Performance Measures ” section of this MD&A; and
• Higher average postpaid accounts.
Prepaid revenues increased $240 million, or 10%, primarily from:
• Higher average prepaid customers, primarily from the prepaid customers acquired through the Ka’ena Acquisition; partially offset by
• Lower prepaid ARPU. See “Prepaid ARPU” in the “ Performance Measures ” section of this MD&A.
Wholesale and other service revenues decreased $374 million, or 35%, primarily from:
• Lower MVNO revenues, including the impact from the Ka’ena Acquisition and lower DISH and TracFone MVNO revenues; and
• Lower Affordable Connectivity Program revenues.
Equipment revenues increased $453 million, or 14%, primarily from:
• An increase of $290 million in device sales revenue, primarily from higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix, including the impact of higher postpaid device upgrades and lower Assurance Wireless device sales; and
• An increase of $190 million in liquidation revenue, primarily due to an increase in the high-end phone mix and a higher number of liquidated devices.
Other revenues were essentially flat.
Total operating expenses increased $490 million, or 3%. The components of this change are discussed below.
Cost of services , exclusive of depreciation and amortization, decreased $86 million, or 3%, primarily from $107 million in Sprint Merger-related costs related to network decommissioning and integration recognized in the prior year.
Cost of equipment sales , exclusive of depreciation and amortization, increased $399 million, or 9%, primarily from:
• An increase of $253 million in device cost of equipment sales, primarily from higher average cost per device sold, primarily driven by an increase in the high-end phone mix, including the impact of higher postpaid device upgrades and lower Assurance Wireless device sales; and
• An increase of $132 million in liquidation costs, primarily due to an increase in the high-end phone mix and a higher number of liquidated devices.
Selling, general and administrative expenses increased $350 million, or 7%, primarily from:
• Higher payroll and benefit related expenses; and
• Higher costs as a result of the Ka’ena Acquisition.
Depreciation and amortization decreased $173 million, or 5%, primarily from higher depreciation expense from the acceleration of certain technology assets in the prior year.
Operating income , the components of which are discussed above, increased $802 million, or 20%.
Interest expense, net was essentially flat.
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Other (expense) income, net was insignificant for both periods.
Income before income taxes , the components of which are discussed above, was $3.8 billion and $3.1 billion for the three months ended March 31, 2025 and 2024, respectively.
Income tax expense increased $121 million, or 16%, primarily from:
• Higher income before income taxes; partially offset by
• An increase in excess tax benefits related to the vesting of restricted stock awards.
Our effective tax rate was 23.0% and 24.4% for the three months ended March 31, 2025 and 2024, respectively.
Net income , the components of which are discussed above, was $3.0 billion and $2.4 billion for the three months ended March 31, 2025 and 2024, respectively.
Net income included Sprint Merger-related costs, net of tax, of $97 million for the three months ended March 31, 2024. There were no Sprint Merger-related costs for the three months ended March 31, 2025.
Guarantor Financial Information
Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation (collectively, the “Issuers”) are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of Parent’s 100% owned subsidiaries (“Guarantor Subsidiaries”).
The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Generally, the guarantees of the Guarantor Subsidiaries with respect to the Senior Notes issued by T-Mobile USA, Inc. (other than $3.5 billion in principal amount of Senior Notes issued in 2017 and 2018) and the credit agreement entered into by T-Mobile USA, Inc. will be automatically and unconditionally released if, immediately following such release and any concurrent releases of other guarantees, the aggregate principal amount of indebtedness of non-guarantor subsidiaries (other than certain specified subsidiaries) would not exceed $2.0 billion. The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and to merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.
Basis of Presentation
The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.
The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:
(in millions) March 31, 2025 December 31, 2024
Current assets $ 25,719 $ 16,741
Noncurrent assets 176,706 179,335
Current liabilities 21,866 18,279
Noncurrent liabilities 126,418 122,934
Due to non-guarantors 1,547 1,507
Due to related parties 2,058 2,098
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The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:
(in millions) Three Months Ended
March 31, 2025 Year Ended
December 31, 2024
Total revenues $ 20,304 $ 78,996
Operating income 3,919 14,463
Net income 2,247 8,360
Revenue from non-guarantors 690 2,619
Operating expenses to non-guarantors 615 2,481
Other income (expense) to non-guarantors 3 (116)
The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions) March 31, 2025 December 31, 2024
Current assets $ 18,452 $ 10,970
Noncurrent assets 14,830 14,734
Current liabilities 16,446 12,683
Noncurrent liabilities 96,903 96,145
Due to non-guarantors (1)
18,037 21,371
Due to related parties 2,058 2,098
(1) The decrease in Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the three months ended March 31, 2025.
The summarized results of operations information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions) Three Months Ended
March 31, 2025 Year Ended
December 31, 2024
Total revenues $ 505 $ 330
Operating loss (914) (3,628)
Net loss (2,147) (8,101)
Other expense, net, to non-guarantors (112) (584)
The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:
(in millions) March 31, 2025 December 31, 2024
Current assets $ 18,452 $ 10,970
Noncurrent assets 14,830 14,734
Current liabilities 16,517 12,756
Noncurrent liabilities 93,030 92,278
Due to non-guarantors (1)
9,005 12,318
Due to related parties 2,058 2,098
(1) The decrease in Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the three months ended March 31, 2025.
The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:
(in millions) Three Months Ended
March 31, 2025 Year Ended
December 31, 2024
Total revenues $ 505 $ 330
Operating loss (914) (3,628)
Net loss (2,140) (8,041)
Other expense, net, to non-guarantors (41) (257)
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Performance Measures
In managing our business and assessing financial performance, we supplement the information provided by our condensed consolidated financial statements with other operating or statistical data and non-GAAP financial measures. These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements. Although companies in the wireless communications services industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the wireless industry on key operating and financial measures.
Postpaid Accounts
A postpaid account is generally defined as a billing account number that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service.
The following table sets forth the number of ending postpaid accounts:
As of March 31, Change
(in thousands) 2025 2024 # %
Postpaid accounts 31,099 30,015 1,084 4 %
Postpaid Net Account Additions
The following table sets forth the number of postpaid net account additions:
Three Months Ended March 31, Change
(in thousands) 2025 2024 # %
Postpaid net account additions 205 218 (13) (6) %
Postpaid net account additions decreased 13,000, or 6%, for the three months ended March 31, 2025, primarily from higher account deactivations, including the impact from a growing account base and the temporary impact of current year rate plan optimizations, partially offset by higher gross account additions.
Customers
A customer is generally defined as a SIM number with a unique T-Mobile identifier which is associated with an account that generates revenue. Customers are qualified either for postpaid service utilizing phones, High Speed Internet modems, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.
The following table sets forth the number of ending customers:
As of March 31, Change
(in thousands) 2025 2024 # %
Customers, end of period
Postpaid phone customers 79,508 76,468 3,040 4 %
Postpaid other customers 25,947 22,804 3,143 14 %
Total postpaid customers 105,455 99,272 6,183 6 %
Prepaid customers 25,455 21,600 3,855 18 %
Total customers 130,910 120,872 10,038 8 %
High Speed Internet customers included in Postpaid other customers were 6,129,000 and 4,634,000 as of March 31, 2025 and 2024, respectively. High Speed Internet customers included in Prepaid customers were 725,000 and 547,000 as of March 31, 2025 and 2024, respectively.
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Net Customer Additions (Losses)
The following table sets forth the number of net customer additions (losses):
Three Months Ended March 31, Change
(in thousands) 2025 2024 # %
Net customer additions (losses)
Postpaid phone customers 495 532 (37) (7) %
Postpaid other customers 842 688 154 22 %
Total postpaid customers 1,337 1,220 117 10 %
Prepaid customers 45 (48) 93 (194) %
Total net customer additions 1,382 1,172 210 18 %
Total net customer additions increased 210,000, or 18%, primarily from:
• Higher postpaid other net customer additions, primarily due to
• Higher net additions from other connected devices;
• Higher net additions from mobile internet devices; and
• Higher net additions from High Speed Internet; partially offset by
• Increased deactivations from a growing customer base; and
• Lower net additions from wearables; and
• Higher prepaid net customer additions, primarily from higher net additions following the Ka’ena Acquisition and lower prepaid to postpaid migrations, partially offset by continued moderation of prepaid industry growth; partially offset by
• Lower postpaid phone net customer additions from higher churn, primarily driven by the temporary impact of current year rate plan optimizations, increased deactivations from a growing customer base and lower prepaid to postpaid migrations, partially offset by higher gross additions.
• High Speed Internet net customer additions included in postpaid other net customer additions were 387,000 and 346,000 for the three months ended March 31, 2025 and 2024, respectively. High Speed Internet net customer additions included in prepaid net customer additions (losses) were 37,000 and 59,000 for the three months ended March 31, 2025 and 2024, respectively.
Churn
Churn represents the number of customers whose service was deactivated as a percentage of the average number of customers during the specified period further divided by the number of months in the period. The number of customers whose service was deactivated is presented net of customers that subsequently had their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time. We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.
The following table sets forth the churn:
Three Months Ended March 31, Change
2025 2024
Postpaid phone churn 0.91 % 0.86 % 5 bps
Prepaid churn 2.68 % 2.75 % -7 bps
Postpaid phone churn increased 5 basis points, primarily from the temporary impact of current year rate plan optimizations.
Prepaid churn decreased 7 basis points, primarily driven by the inclusion of prepaid customers associated with the Ka’ena Acquisition with lower churn.
Postpaid Average Revenue Per Account
Postpaid Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. Postpaid ARPA is calculated as Postpaid revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and
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assists in forecasting our future postpaid service revenues on a per account basis. We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including High Speed Internet, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT).
The following table sets forth our operating measure ARPA:
(in dollars) Three Months Ended March 31, Change
2025 2024 $ %
Postpaid ARPA $ 146.22 $ 140.88 $ 5.34 4 %
Postpaid ARPA increased $5.34, or 4%, primarily from:
• An increase in customers per account, including from the continued adoption of High Speed Internet;
• Higher premium services, primarily high-end rate plans, net of contra-revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; and
• The positive impact from prior year rate plan optimizations; partially offset by
• Increased promotional activity; and
• An increase in total High Speed Internet only accounts.
Average Revenue Per User
Average Revenue per User (“ARPU”) represents the average monthly service revenue earned per customer. ARPU is calculated as service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period. We believe ARPU provides management, investors and analysts with useful information to assess and evaluate our service revenue per customer and assist in forecasting our future service revenues generated from our customer base. Postpaid phone ARPU excludes postpaid other customers and related revenues, which include High Speed Internet, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT).
The following table sets forth our operating measure ARPU:
(in dollars) Three Months Ended March 31, Change
2025 2024 $ %
Postpaid phone ARPU $ 49.38 $ 48.79 $ 0.59 1 %
Prepaid ARPU 34.67 37.18 (2.51) (7) %
Postpaid Phone ARPU
Postpaid phone ARPU increased $0.59, or 1%, primarily from:
• Higher premium services, primarily high-end rate plans, net of contra-revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; and
• The positive impact from prior year rate plan optimizations; partially offset by
• Increased promotional activity, including the success of bundled offerings and continued growth in T-Mobile for Business customers with lower ARPU given large account sizes.
Prepaid ARPU
Prepaid ARPU decreased $2.51, or 7%, primarily from the inclusion of prepaid customers with lower ARPU associated with the Ka’ena Acquisition.
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Adjusted EBITDA and Core Adjusted EBITDA
Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain expenses, gains and losses, which are not reflective of our ongoing operating performance (“Special Items”). Special Items include Sprint Merger-related costs, UScellular Merger-related costs, certain legal-related expenses, restructuring costs not directly attributable to the Sprint Merger or UScellular Merger (including severance), and other non-core gains and losses. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Adjusted EBITDA margin represents Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin represents Core Adjusted EBITDA divided by Service revenues.
Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole. We historically used Adjusted EBITDA, and we currently use Core Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors. Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation, and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP.
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The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended March 31, Change
(in millions, except percentages) 2025 2024 $ %
Net income $ 2,953 $ 2,374 $ 579 24 %
Adjustments:
Interest expense, net 916 880 36 4 %
Other expense (income), net 46 (20) 66 (330) %
Income tax expense 885 764 121 16 %
Operating income 4,800 3,998 802 20 %
Depreciation and amortization 3,198 3,371 (173) (5) %
Stock-based compensation (1)
168 140 28 20 %
Sprint Merger-related costs — 130 (130) (100) %
UScellular Merger-related costs (2)
14 — 14 NM
Legal-related expenses, net (3)
6 — 6 NM
Other, net (4)
73 13 60 462 %
Adjusted EBITDA 8,259 7,652 607 8 %
Lease revenues (1) (35) 34 (97) %
Core Adjusted EBITDA
$ 8,258 $ 7,617 $ 641 8 %
Net income margin (Net income divided by Service revenues) 17 % 15 % 200 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 49 % 48 % 100 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
49 % 47 % 200 bps
(1) Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense on the condensed consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Sprint Merger have been included in Sprint Merger-related costs.
(2) UScellular Merger-related costs generally include pre-merger consulting and legal fees.
(3) Legal-related expenses, net, consists of the settlement of certain litigation and compliance costs associated with the August 2021 cyberattack and is presented net of insurance recoveries.
(4) Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, not directly attributable to the Sprint Merger or UScellular Merger, which are not reflective of T-Mobile’s core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA.
NM - Not meaningful
Core Adjusted EBITDA increased $641 million, or 8%, for the three months ended March 31, 2025. The components comprising Core Adjusted EBITDA are discussed further above.
The increase was primarily from:
• Higher Total service revenues; and
• Higher Equipment revenues, excluding lease revenues; partially offset by
• Higher Cost of equipment sales; and
• Higher Selling, general and administrative expenses, excluding Special Items.
Adjusted EBITDA increased $607 million, or 8%, for the three months ended March 31, 2025, primarily due to the increase in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $34 million for the three months ended March 31, 2025.
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Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt, financing leases, the sale of certain receivables, the Revolving Credit Facility (as defined below) and an unsecured short-term commercial paper program. Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt in the future to finance our business strategy under the terms governing our existing and future indebtedness.
Cash Flows
The following is a condensed schedule of our cash flows:
Three Months Ended March 31, Change
(in millions) 2025 2024 $ %
Net cash provided by operating activities $ 6,847 $ 5,084 $ 1,763 35 %
Net cash used in investing activities (3,409) (1,787) (1,622) 91 %
Net cash provided by (used in) financing activities 3,193 (1,666) 4,859 (292) %
Operating Activities
Net cash provided by operating activities increased $1.8 billion, or 35%, primarily from:
• A $1.1 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts payable and accrued liabilities, Accounts receivable and Short- and long-term operating lease liabilities, partially offset by higher use of cash from Inventory, Equipment installment plan receivables and Other current and long-term assets; and
• A $663 million increase in Net income, adjusted for non-cash income and expenses.
• Net cash provided by operating activities includes the impact of the Pledge Amendments as described below.
• Net cash provided by operating activities includes the impact of $61 million and $293 million in net payments for Sprint Merger-related costs for the three months ended March 31, 2025 and 2024, respectively.
Investing Activities
Net cash used in investing activities increased $1.6 billion, or 91%. The use of cash was primarily from:
• $2.5 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network; and
• $727 million of cash consideration, net of cash acquired, related to our acquisitions of Vistar and Blis.
Financing Activities
Net cash provided by financing activities increased $4.9 billion from a net use of cash for the three months ended March 31, 2024, to a net source of cash for the three months ended March 31, 2025. The net source of cash was primarily from:
• $7.8 billion in Proceeds from issuance of long-term debt; partially offset by
• $2.5 billion in Repurchases of common stock;
• $1.0 billion in Dividends on common stock;
• $479 million in Repayments of long-term debt;
• $315 million in Repayments of financing lease obligations; and
• $272 million in Tax withholdings on share-based awards.
Cash and Cash Equivalents
As of March 31, 2025, our Cash and cash equivalents were $12.0 billion compared to $5.4 billion at December 31, 2024.
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Adjusted Free Cash Flow
Adjusted Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, plus Proceeds related to beneficial interests in securitization transactions. Adjusted Free Cash Flow is a non-GAAP financial measure utilized by management, investors and analysts of our financial information to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business. Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow margin is utilized by management, investors, and analysts to evaluate the Company’s ability to convert service revenue efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended March 31, Change
(in millions, except percentages) 2025 2024 $ %
Net cash provided by operating activities $ 6,847 $ 5,084 $ 1,763 35 %
Cash purchases of property and equipment, including capitalized interest (2,451) (2,627) 176 (7) %
Proceeds related to beneficial interests in securitization transactions — 890 (890) (100) %
Adjusted Free Cash Flow $ 4,396 $ 3,347 $ 1,049 31 %
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 40 % 32 % 800 bps
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 26 % 21 % 500 bps
Adjusted Free Cash Flow increased $1.0 billion, or 31%, for the three months ended March 31, 2025, primarily from:
• Higher Net cash provided by operating activities, as described above; and
• Lower Cash purchases of property and equipment, including capitalized interest, driven by planned timing of capital purchases; partially offset by
• Proceeds related to beneficial interests in securitization transactions recognized in the prior year.
• Adjusted Free Cash Flow includes the impact of $61 million and $293 million for the three months ended March 31, 2025 and 2024, respectively, in net payments for Sprint Merger-related costs.
During the three months ended March 31, 2025 and 2024, there were no significant net cash proceeds from securitization.
On October 22, 2024, we executed amendments (the “Pledge Amendments”) to the EIP Sale Arrangement and the Service Receivable Sale Arrangement (as discussed in Note 5 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements). Following the effective date of the Pledge Amendments of November 1, 2024, all cash proceeds associated with the sale of such receivables, a portion of which, prior to November 1, 2024, were recognized as Proceeds related to beneficial interests in securitization transactions within Net cash used in investing activities on our Condensed Consolidated Statements of Cash Flows, were recognized as operating cash flows. The Pledge Amendments did not have a net impact on Adjusted Free Cash Flow.
Borrowing Capacity
We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $7.5 billion. As of March 31, 2025, there was no outstanding balance under the Revolving Credit Facility.
We maintain an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program supplements our other available external financing arrangements and proceeds are expected to be used for general corporate purposes. As of March 31, 2025, there was no outstanding balance under this program.
Debt Financing
On January 31, 2025, our wholly owned subsidiary, T-Mobile USA, Inc., entered into a credit agreement with certain financial institutions, backed by an Export Credit Agency (the “ECA Facility”), providing for a loan of up to $1.0 billion. On March 17, 2025, we drew down the full $1.0 billion available under the ECA Facility and recognized the net proceeds within Proceeds from issuance of long-term debt on our Condensed Consolidated Statements of Cash Flows.
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As of March 31, 2025, our total debt and financing lease liabilities were $88.0 billion, excluding our tower obligations, of which $77.5 billion was classified as long-term debt and $1.1 billion was classified as long-term financing lease liabilities.
During the three months ended March 31, 2025, we issued long-term debt for net proceeds of $7.8 billion, including proceeds from the ECA Facility, and repaid short-term debt with an aggregate principal amount of $479 million.
Subsequent to March 31, 2025, on April 15, 2025, we repaid at maturity $3.0 billion of our 3.500% Senior Notes due 2025.
For more information regarding our debt financing transactions, see Note 8 – Debt of the Notes to the Condensed Consolidated Financial Statements.
License Purchase Agreements
On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) in exchange for total cash consideration of $3.5 billion. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements, pursuant to which we and the Sellers agreed to bifurcate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, whereby we deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent approximately $1.1 billion of the aggregate $3.5 billion cash consideration.
The FCC approved the purchase of the first tranche on December 29, 2023. The first tranche closed on June 24, 2024, and the associated payment of $2.4 billion was made on August 5, 2024.
The FCC approved the purchase of the Dallas licenses included in the second tranche on October 22, 2024. The purchase of the Dallas licenses closed on December 6, 2024, and the associated payment of $541 million was made on the same day.
We anticipate that the remaining deferred licenses from the second tranche of $604 million will close in the second quarter of 2025.
The parties have agreed that each of the closings will occur within 180 days after the receipt of the applicable required regulatory approvals, and payment of each portion of the aggregate $3.5 billion purchase price will occur no later than 40 days after the date of each respective closing.
On September 12, 2023, we entered into a License Purchase Agreement with Comcast (the “Comcast License Purchase Agreement”) pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the Comcast License Purchase Agreement. On January 13, 2025, we and Comcast entered into an amendment to the Comcast License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. We anticipate the closing will occur in the first half of 2028.
On September 10, 2024, we entered into a License Purchase Agreement with N77 License Co LLC (“Buyer”), pursuant to which Buyer has the option to purchase all or a portion of our remaining 3.45 GHz spectrum licenses in exchange for a range of cash consideration, with the specific licenses sold to be determined based upon the amount of committed financing raised by Buyer. As of March 31, 2025, $1.8 billion of the associated licenses have been classified as held for sale at cost and presented in Other current assets on our Condensed Consolidated Balance Sheets. The transaction is subject to receipt of regulatory approvals and is expected to close in the second quarter of 2025. The closing of this transaction is not expected to have a material impact on our Condensed Consolidated Statements of Comprehensive Income.
Lumos Joint Venture
On April 24, 2024, we entered into a definitive agreement with Fund VI to establish a joint venture between us and Fund VI to acquire Lumos from EQT’s predecessor fund, EQT Infrastructure III. Subsequent to March 31, 2025, on April 1, 2025, we completed the joint acquisition of Lumos. At closing, we invested $926 million to acquire a 50% equity interest in the joint venture and fiber customers. The funds invested by us will be used to fund future fiber builds. In addition, pursuant to the
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definitive agreement, we expect to make an additional capital contribution of approximately $500 million in 2027 or 2028 under the existing business plan.
For more information regarding the Lumos joint venture, see Note 3 – Joint Ventures of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Ka’ena Corporation
On May 1, 2024, we completed the Ka’ena Acquisition. The total purchase price is variable, dependent upon specified performance indicators of Ka’ena, and consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable on August 1, 2026.
Based on the adjusted amount paid upfront, up to an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout, dependent upon Ka’ena’s achievement of specified performance indicators.
For more information regarding the Ka’ena Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of UScellular Wireless Operations
On May 24, 2024, we entered into a securities purchase agreement with UScellular pursuant to which, among other things, we will acquire substantially all of UScellular’s wireless operations and select spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through an exchange offer to certain UScellular debtholders prior to closing. To the extent any debtholders do not participate in the exchange, their bonds will continue as obligations of UScellular, and the cash portion of the purchase price will be correspondingly increased. The transaction is expected to close in mid-2025, subject to customary closing conditions and receipt of certain regulatory approvals.
Following the closing of the transaction, UScellular will retain ownership of its other spectrum, as well as its towers. Subject to the closing of the transaction, we will enter into a 15-year master license agreement to lease space on at least 2,100 towers being retained and to extend our tenancy term on approximately 600 towers where we are already leasing space from UScellular for 15 years post-closing. We estimate the incremental future minimum lease payments associated with the master license agreement will be $1.4 billion over 15 years post-closing.
Metronet Joint Venture
On July 18, 2024, we entered into a definitive agreement with KKR to establish a joint venture to acquire Metronet. This arrangement is expected to close in mid-2025, subject to customary closing conditions and regulatory approvals. At closing, we expect to invest approximately $4.9 billion to acquire a 50% equity interest in the joint venture and all existing residential fiber customers, as well as funding of the joint venture. We do not anticipate making further capital contributions following the closing under the existing business plan.
For more information regarding the Metronet joint venture, see Note 3 – Joint Ventures of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Vistar Media Inc.
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025, we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $621 million.
For more information regarding the Vistar Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Blis Holdco Limited
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025, we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, T-Mobile transferred cash of $180 million.
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For more information regarding the Blis Acquisition, see Note 2 – Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We have arrangements, as amended from time to time, to sell certain EIP accounts receivable and service accounts receivable on a revolving basis as a source of liquidity. As of March 31, 2025, we derecognized net receivables of $1.6 billion upon sale through these arrangements.
For more information regarding these off-balance sheet arrangements, see Note 5 – Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.
Future Sources and Uses of Liquidity
We may seek additional sources of liquidity, including through the issuance of additional debt, to continue to opportunistically acquire spectrum licenses or other long-lived assets in private party transactions, make strategic investments, repurchase shares, pay dividends or for the refinancing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for acquisitions of businesses, spectrum and other long-lived assets, or for any potential stockholder returns, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months, as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of debt, tower obligations, share repurchases, and dividend payments.
We determine future liquidity requirements for operations, capital expenditures, share repurchases and dividend payments based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments (as defined below), and we have incurred all of the remaining restructuring and integration costs associated with the Sprint Merger, with the cash expenditures for the Sprint Merger-related costs extending beyond 2024. There are a number of additional risks and uncertainties that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.
The indentures, supplemental indentures and credit agreements governing our long-term debt to affiliates and third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. We were in compliance with all restrictive debt covenants as of March 31, 2025.
Financing Lease Facilities
We have uncommitted financing lease facilities with certain third parties that provide us with the ability to enter into financing leases for network equipment and services. We expect to enter into up to a total of $1.2 billion in financing lease commitments during the year ending December 31, 2025. As of March 31, 2025, we have entered into $10.2 billion of financing leases under these financing lease facilities, of which $243 million was executed during the three months ended March 31, 2025.
Capital Expenditures
Our liquidity requirements for capital expenditures have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure, the integration of the networks, spectrum, technology, personnel and customer base of T-Mobile and Sprint, which is substantially complete, and investments in information technology platforms. We expect to maintain our investment in capital expenditures related to these efforts in 2025 compared to 2024, as we continue to build out our nationwide 5G network and our digital transformation. Future capital expenditure requirements will be primarily driven by the deployment of acquired spectrum licenses.
For more information regarding our spectrum licenses, see Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Condensed Consolidated Financial Statements.
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Stockholder Returns
On December 13, 2024, we announced that our Board of Directors authorized our 2025 Stockholder Return Program of up to $14.0 billion that will run through December 31, 2025. The 2025 Stockholder Return Program consists of repurchases of shares of our common stock and the payment of cash dividends. The declaration and payment of all dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations. The amount available under the 2025 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us.
The 2025 Stockholder Return Program is consistent with the Company’s capital allocation framework outlined during its Capital Markets Day in September 2024. As discussed at Capital Markets Day, the Company expects its business plan to support approximately $80.0 billion in investments and capital returns between September 18, 2024, and the end of 2027. The Company currently plans to allocate such funds as follows:
• Up to $50.0 billion for share repurchases and cash dividends, which includes the 2025 Stockholder Return Program;
• Approximately $19.0 billion in a discretionary and flexible envelope for potential activities, which may include de-levering, investments in our core business, strategic investments, and/or additional capital returns to stockholders beyond the $50.0 billion initial allocation; and
• Approximately $11.0 billion for announced transactions, including the acquisitions closed during the three months ended March 31, 2025. See Note 2 - Business Combinations , Note 3 - Joint Ventures and Note 6 – Goodwill, Spectrum License Transactions and Other Intangible Assets for additional information.
On November 21, 2024, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which was paid on March 13, 2025, to stockholders of record as of the close of business on February 28, 2025.
On February 6, 2025, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which will be paid on June 12, 2025, to stockholders of record as of the close of business on May 30, 2025.
During the three months ended March 31, 2025, we paid an aggregate of $1.0 billion in cash dividends to our stockholders, which was presented within Net cash provided by (used in) financing activities on our Condensed Consolidated Statements of Cash Flows. As of March 31, 2025, $993 million for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets.
During the three months ended March 31, 2025, we repurchased 10,091,227 shares of our common stock at an average price per share of $244.77 for a total purchase price of $2.5 billion under the 2025 Stockholder Return Program. As of March 31, 2025, we had up to $10.5 billion remaining under the 2025 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2025.
Subsequent to March 31, 2025, from April 1, 2025, through April 17, 2025, we repurchased 1,975,200 shares of our common stock at an average price per share of $259.09 for a total purchase price of $512 million under the 2025 Stockholder Return Program. As of April 17, 2025, we had up to $10.0 billion remaining under the 2025 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2025.
For additional information regarding the 2025 Stockholder Return Program, see Note 1 2 – Stockholder Return Program of the Notes to the Condensed Consolidated Financial Statements.
Related Party Transactions
We have related party transactions associated with DT, SoftBank or their respective affiliates in the ordinary course of business, including intercompany servicing and licensing.
As of April 17, 2025, DT and SoftBank held, directly or indirectly, approximately 51.8% and 7.5%, respectively, of the outstanding T-Mobile common stock, with the remaining approximately 40.7% of the outstanding T-Mobile common stock held by other stockholders. As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank, DT has voting control, as of April 17, 2025, over approximately 59.0% of the outstanding T-Mobile common stock.
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Disclosure of Iranian Activities under Section 13(r) of the Exchange Act
Section 219 of the Iran Threat Reduction and the Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.
As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended March 31, 2025, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates that we do not control and that are our affiliates solely due to their common control with either DT or SoftBank. We have relied upon DT and SoftBank for information regarding their respective activities, transactions and dealings.
DT, through certain of its non-U.S. subsidiaries, is party to roaming and interconnect agreements with the following mobile and fixed line telecommunication providers in Iran, some of which are or may be government-controlled entities: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the three months ended March 31, 2025, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to seven customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control: Bank Melli, Europäisch-Iranische Handelsbank, CPG Engineering & Commercial Services GmbH, Golgohar Trade and Technology GmbH, International Trade and Industrial Technology ITRITEC GmbH, The Airline of the Islamic Republic of Iran and Kara Industrial Trading GmbH. These services are in the process of being terminated, in particular by undertaking appropriate legal steps before German courts. For the three months ended March 31, 2025, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.
In addition, DT, through certain of its non-U.S. subsidiaries that operate a fixed-line network in their respective European home countries (in particular, Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries. Gross revenues and net profits recorded from these activities for the three months ended March 31, 2025, were less than $0.1 million. We understand that DT intends to continue these activities.
Separately, SoftBank, through one of its non-U.S. subsidiaries, provides roaming services in Iran through Irancell Telecommunications Services Company. During the three months ended March 31, 2025, SoftBank had no gross revenues from such services, and no net profit was generated. We understand that the SoftBank subsidiary intends to continue such services. This subsidiary also provides telecommunications services in the ordinary course of business to accounts affiliated with the Embassy of Iran in Japan. During the three months ended March 31, 2025, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million. We understand that the SoftBank subsidiary is obligated under contract and intends to continue such services.
In addition, SoftBank, through one of its non-U.S. indirect subsidiaries, provides office supplies to the Embassy of Iran in Japan. SoftBank estimates that gross revenues and net profit generated by such services during the three months ended March 31, 2025, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.
Critical Accounting Estimates
Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. There have been no material changes to the critical accounting policies and estimates as previously disclosed in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2024, and which are hereby incorporated by reference herein.
Accounting Pronouncements Not Yet Adopted
For information regarding recently issued accounting standards, see Note 1 – Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements.
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