T-Mobile’s 10% EBITDA Explosion Could Make Savvy Investors Filthy Rich

At a Glance

• • EPS: $1.88 vs. $2.10 estimate (includes $0.26 severance impact)
  • Revenue: $24.33 billion vs. $24.66 billion implied estimate
  • Net Income: $2.1 billion, down from $2.98 billion in Q4 2024
  • Core Adjusted EBITDA: $8.4 billion (up 7% YoY)
  • Stock Performance: TMUS traded at $199.43 as of February 10, 2026, down 20.84% over one year

Financial Performance Highlights

T-Mobile’s Q4 results reflected strong operational momentum offset by workforce restructuring costs. Service revenue climbed 10% YoY to $18.7 billion, driven by postpaid service revenue growth of 13.9%. Operating cash flow surged 20% to $6.65 billion, while adjusted free cash flow reached $4.2 billion.

The earnings miss stemmed from $390 million in severance costs ($293 million after-tax) tied to workforce transformation initiatives. Without this charge, operational performance remained robust, with full-year 2025 core adjusted EBITDA hitting $33.9 billion.

Customer Growth & Operational Momentum

T-Mobile added 2.4 million total postpaid net customers in Q4, including 962,000 postpaid phone net additions. Broadband expansion continued with 558,000 net additions, bringing total broadband customers to 9.4 million, including 8.5 million 5G broadband subscribers.

J.D. Power awarded T-Mobile highest network quality ratings in five of six U.S. regions for the first time. However, postpaid phone churn ticked up to 1.02%, rising 10 basis points YoY.

2026 Guidance & Outlook

Management projected aggressive growth for 2026, targeting core adjusted EBITDA of $37.0 billion to $37.5 billion (representing 10% growth at midpoint) and adjusted free cash flow of $18.0 billion to $18.7 billion. Capital expenditures are expected at approximately $10.0 billion.

CEO Srini Gopalan expressed confidence, stating: “As we look to 2026, we’re even more confident that the future is brighter than ever before.”

Capital Returns

T-Mobile returned $3.6 billion to stockholders in Q4 through $2.5 billion in share repurchases and $1.1 billion in dividends. Since Q3 2022, cumulative returns total $45.4 billion. The board authorized a new $14.6 billion program through December 2026, with the next dividend of $1.02 per share payable March 12, 2026.