Latest quarter
T-Mobile reported Q2 FY2026 revenue of $22.8 billion, above the $22.7 billion consensus. Adjusted earnings per share, as counted by the consensus, were $3.13, above the $2.49 estimate.
Revenue rose from $21.1 billion a year earlier. CEO Srinivasan Gopalan said postpaid service revenue grew 13% and total service revenue grew 9%, while T-Mobile added 277,000 postpaid accounts on a net basis. The company reported diluted earnings per share of $2.99, compared with $2.84 a year earlier; that figure differs from the adjusted measure used for the consensus comparison.
T-Mobile’s gross margin was 64.8%, compared with 65.1% a year earlier, and its operating margin was 24.1%, down from 24.7%. The company reported free cash flow of $4.3 billion, compared with $5.8 billion in the prior-year quarter.
| Q2 FY2026 | Q2 FY2025 | Change | |
|---|---|---|---|
| Revenue | $22.8 billion | $21.1 billion | 7.85% |
| Diluted EPS | $2.99 | $2.84 | 5.28% |
| Gross margin | 64.8% | 65.1% | −0.3 percentage points |
| Operating margin | 24.1% | 24.7% | −0.6 percentage points |
| Free cash flow | $4.3 billion | $5.8 billion | −25.6% |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $3.13 | $2.49 | Beat by 25.7% |
| Revenue | $22.8 billion | $22.7 billion | In line |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On the Q2 call, CEO Srinivasan Gopalan said T-Mobile gained postpaid household share across the top 100 markets and in smaller markets and rural areas. He said more than 60% of customers on new accounts selected premium plans, while postpaid average revenue per account grew 2% year over year.
Asked about device promotions, Gopalan said T-Mobile wanted to explain more of its offer to customers rather than focus solely on a free phone. He said: “Our intention, consistent with what we’ve said, is not to increase our subsidy levels.” He added that customers would consequently have to pay more.
CFO Peter Osvaldik said the company anticipated its Q3 rate-plan modernization would temporarily elevate account churn, with the effect concentrated more in accounts with fewer lines. At the time of the call, he expected approximately 250,000 net postpaid account additions in Q3. Osvaldik also said comparisons for core adjusted EBITDA reflected the timing of acquisitions in the prior year.
On broadband competition and network capacity, Gopalan said T-Mobile’s fixed-wireless model uses capacity left over after accounting for other traffic at peak hours. He said the company’s customer target did not assume new spectrum or technology improvements. Osvaldik described the target as 15 million subscribers by 2030.
Gopalan said T-Mobile had rolled out live translation in beta, embedding AI models in its core network. Asked about capital allocation, Osvaldik said the company was considering spectrum opportunities in 2027 and 2028. He declined to specify an exact amount of quarterly share repurchases, saying the amount would depend on the opportunities available at the time.
Guidance
In its October update, T-Mobile raised its FY2026 adjusted free cash flow outlook to $18.7 billion–$18.8 billion from $18.4 billion–$18.8 billion. It also raised expected operating cash flow, including UScellular merger-related payments, to $28.7 billion–$28.8 billion from $28.4 billion–$28.8 billion.
The company expects core adjusted EBITDA of $37.35 billion–$37.45 billion, compared with its previous $37.1 billion–$37.5 billion range. It expects approximately 1,000,000 postpaid net account additions, the midpoint of its previous 950,000–1,050,000 range. T-Mobile also lowered its expected effective tax rate to 24.0%–25.0% from 25%–26%.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| Free cash flow, non-GAAP | FY2026 | $18.7 billion–$18.8 billion | — | New |
| Capex | FY2026 | $10.0 billion | — | New |
| Operating cash flow | FY2026 | $28.7 billion–$28.8 billion | — | New |
| EBITDA, Core Adjusted | FY2026 | $37.4 billion–$37.5 billion | $37.1 billion–$37.5 billion | Held |
| Tax rate | FY2026 | 24.0%–25.0% | — | New |
| Customers, Postpaid Accounts | FY2026 | 1,000,000 | 950,000–1,050,000 | — |
| Free cash flow, Adjusted; including net payments for uscellular merger-related costs | FY2026 | $18.4 billion–$18.8 billion | — | New |
| Capex, Including capitalized interest | FY2026 | $10.0 billion | — | New |
| Operating cash flow, Including net payments for uscellular merger-related costs | FY2026 | $28.4 billion–$28.8 billion | — | New |
| Customers, Postpaid | FY2026 | 950,000–1,050,000 | — | — |
| Customers, Fixed Wireless | FY2030 | 15,000,000 | — | — |
| Capex, Cash | FY2026 | $10.0 billion | $10.0 billion | Held |
| EBITDA, Core Adjusted | Q3 FY2026 | $9.4 billion | Q2 2026: $9.4 billion | Held |
| Revenue, Service | Q3 FY2026 | $19.3 billion | Q2 2026: $19.0 billion | Raised |
| Revenue, Service | FY2026 | $77.0 billion | $77.0 billion | Held |
| Customers, Postpaid Accounts | Q3 FY2026 | 250,000 | — | — |
| Operating expenses, Cost Synergies | exiting 2027 | $2.7 billion | — | New |
| Free cash flow, Adjusted | FY2026 | $18.1 billion–$18.7 billion | — | New |
| Customers, Postpaid Net Account Additions | FY2026 | 950,000–1,050,000 | — | — |