T-Mobile (NASDAQ: TMUS) reported Q3 EPS of $1.00, $0.57 better than the analyst estimate of $0.43. Revenue for the quarter came in at $19.3 billion versus the consensus estimate of $18.3 billion.

• Record-high 2,035,000 total net additions, best in industry
• Record-high 1,979,000 postpaid net additions, best in industry
• 689,000 postpaid phone net additions, best in industry
• 56,000 prepaid net additions
• Record-high 100.4 million total customers at the end of Q3 2020

Strong Financial Results Drive Guidance Raise Across the Board

• Total revenues of $19.3 billion and service revenues of $14.1 billion
• Net income(1) of $1.3 billion and diluted earnings per share (“EPS”) of $1.00
• Adjusted EBITDA(1) of $7.1 billion, raising H2 2020 guidance
• Net cash provided by operating activities of $2.8 billion, raising H2 2020 guidance
• Free Cash Flow(1) of $352 million, raising H2 2020 guidance

Raising H2 2020 Outlook

• Postpaid phone net customer additions are expected to be between 1.3 million and 1.4 million, including 600,000 to 700,000 in Q4 2020. The prior guidance of 1.7 million to 1.9 million total postpaid net customer additions was achieved with Q3 2020 results.
• Adjusted EBITDA is expected to be in the range of $13.6 billion to $13.7 billion, up from prior guidance of $12.4 billion to $12.7 billion. The Adjusted EBITDA target includes leasing revenues of $2.5 billion to $2.6 billion, compared to prior guidance of $2.4 billion to $2.6 billion.
• Cash purchases of property and equipment, including capitalized interest are expected to be between $6.7 billion and $6.9 billion, compared to prior guidance of $6.5 billion to $6.9 billion.
• Merger-related costs are expected to be $800 million to $1 billion before taxes, unchanged from prior guidance. These costs are excluded from Adjusted EBITDA but will impact Net income and cash flows.
• Net cash provided by operating activities, including payments for Merger-related costs, is expected to be in the range of $5.9 billion to $6.1 billion, up from prior guidance of $5.3 billion to $5.7 billion.
• Free Cash Flow, including payments for Merger-related costs, is expected to be in the range of $700 million to $900 million, up from prior guidance of $300 million to $500 million. Free Cash Flow guidance does not assume any material net cash inflows from securitization.

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