T-Mobile 2025 Annual Results: Revenue Growth Accelerates to 8% Amid Major Acquisitions and Capital Deployment

What happened

T-Mobile reported total revenues of $88.3 billion for 2025, an increase of $6.9 billion or 8% compared to 2024. Postpaid revenues increased $5.6 billion (11%) driven by higher average postpaid accounts, including contributions from the UScellular, Metronet and Lumos acquisitions, and postpaid ARPA growth of $5.12 to $148.97. Equipment revenues grew $1.7 billion (12%) from higher device sales volume and average revenue per device. Wholesale and other service revenues declined $562 million (16%) primarily from lower MVNO revenues including EchoStar and TracFone, and lower Affordable Connectivity Program revenues, partially offset by higher advertising revenues from Vistar and Blis acquisitions. Operating income increased $269 million to $18.3 billion (1% growth). Net income declined $347 million to $11.0 billion (down 3%). The company incurred $390 million in severance costs for the 2025 Workforce Transformation affecting approximately 5% of the workforce, $278 million in impairment charges related to billing system software, $263 million in UScellular merger-related costs, and $190 million in Network Restructuring Initiative costs. Core Adjusted EBITDA increased $2.2 billion to $33.9 billion (7% growth). Interest expense rose $363 million (11%) due to higher average debt outstanding and a higher average effective interest rate. Cash from operations increased $5.7 billion to $28.0 billion (25% growth), while adjusted free cash flow increased $963 million to $18.0 billion (6% growth). Total customers reached 142.4 million, up 12.9 million (10%), with postpaid accounts growing by 3.3 million to 34.2 million (11% growth). Postpaid phone churn increased 7 basis points to 0.93% primarily due to higher industry switching and temporary impacts from rate plan optimizations.

Why it matters for investors

The combined results demonstrate T-Mobile's ability to maintain revenue momentum through customer and account growth while executing a major acquisition and capital deployment strategy. The 11% growth in postpaid revenues and 4% expansion in postpaid ARPA indicate continued pricing power and successful migration toward higher-value account relationships. The integration of UScellular's 3.3 million postpaid phone customers and spectrum assets positions the company for expected annual run rate cost synergies of $1.2 billion, though realization requires execution on $2.6 billion in integration costs over the next two years. The company's entry into fiber through the Metronet and Lumos joint ventures adds 810,000 fiber customers and represents a strategic expansion beyond traditional wireless into fixed broadband, increasing capital intensity but broadening revenue opportunities. Operating expense growth of 10% outpaced revenue growth of 8%, driven by higher equipment costs from premium device mix, personnel costs, and restructuring charges. The 25% growth in operating cash flow to $28.0 billion enabled the company to deploy $14.0 billion to shareholders while investing $10.0 billion in capital expenditures and $5.5 billion in acquisitions and joint ventures. The company's commitment to deploy up to $30 billion in shareholder returns through 2027 signals confidence in sustained free cash flow generation, though it also limits flexibility for additional strategic investments or deleveraging. Rising debt levels and an 11% increase in interest expense to $3.8 billion highlight increasing financial leverage as the company funds growth initiatives. The 7-basis-point increase in postpaid phone churn suggests emerging retention pressure despite strong gross additions, requiring monitoring as the competitive landscape evolves.

Key highlights

T-Mobile completed three major acquisitions in 2025: UScellular for $2.8 billion cash plus $1.7 billion in debt assumption on August 1, 2025, adding 3.3 million postpaid phone customers and spectrum assets; Vistar for $621 million on February 3, 2025; and Blis for $180 million on March 3, 2025, expanding the company's advertising technology capabilities. The company also established two fiber joint ventures, investing $4.6 billion for a 50% stake in Metronet on July 24, 2025, acquiring 713,000 residential fiber customers, and $932 million for a 50% stake in Lumos on April 1, 2025, acquiring 97,000 fiber customers. Combined, these joint ventures position T-Mobile to own fiber customer relationships while the joint ventures operate as wholesale network providers. Postpaid accounts increased 3.3 million to 34.2 million (11% growth), with net account additions of 1.2 million. The company launched restructuring initiatives in the fourth quarter of 2025, including the 2025 Workforce Transformation to streamline operations and the Network Restructuring Initiative to rationalize network sites and reduce costs, with expected total costs of $500 million to $800 million for the Network Restructuring Initiative through 2026. The company deployed $14.0 billion under the 2025 Stockholder Return Program, including $10.0 billion in share repurchases of 42.4 million shares at an average price of $232.96 and $4.1 billion in cash dividends at $3.66 per share. On December 11, 2025, the Board authorized a new $14.6 billion stockholder return program for 2026. The company committed to support up to $30 billion in share repurchases and dividends from 2026 through 2027, plus over $22 billion in a discretionary envelope for opportunistic deployment including deleveraging, core business investments, strategic investments, or additional capital returns. Cash and cash equivalents were $5.6 billion as of December 31, 2025, compared to $5.4 billion at December 31, 2024. The company issued $12.0 billion in long-term debt during 2025, including $1.0 billion from an ECA Facility due March 2036 and $1.0 billion from an ECA Facility due November 2036, and redeemed $6.2 billion in debt. Subsequent to year-end, on January 12, 2026, the company issued $1.2 billion of 5.000% Senior Notes due 2036 and $850 million of 5.850% Senior Notes due 2056, and on January 22, 2026, delivered notices of redemption on $3.0 billion aggregate principal of 4.750% Senior Notes due 2028.

Management commentary

Management expects postpaid service revenues to continue to grow in 2026, primarily due to continued postpaid account and customer growth as well as postpaid ARPA growth driven by the execution of the company's strategy to continuously deepen account relationships, including growth in broadband. Management expects Wholesale and other service revenues to remain relatively flat to slightly up, primarily from an increase in advertising revenues, offset by lower MVNO revenues, including lower EchoStar and TracFone MVNO revenues. Management expects Total operating expenses to increase in 2026, primarily driven by higher Depreciation and amortization from assets placed into service associated with the continued build-out of the nationwide 5G network, as well as higher Cost of equipment sales driven by higher expected unit sales from a growing customer base, and higher Cost of services and Selling, general and administrative expenses, including from the UScellular Acquisition. Upon completion of UScellular restructuring and integration activities, management expects to achieve total annual run rate cost synergies of $1.2 billion, consisting of $950 million in operating expenses and $250 million in capital expenditures, with costs to achieve expected to be approximately $2.6 billion. The company's restructuring and integration activities associated with the UScellular Acquisition are expected to occur over the next two years with substantially all costs incurred and associated cash payments made by the end of fiscal year 2027. Management expects to maintain investment in capital expenditures related to integration efforts in 2026 compared to 2025, as the company continues its integration efforts, maintains its commitment to build out the nationwide 5G network, and continues digital transformation. Management currently expects to incur between $500 million and $800 million of costs associated with the Network Restructuring Initiative occurring over the next two years with a majority of costs incurred by the end of fiscal year 2026. Management expects substantially all employee separations and related cash outflows for the 2025 Workforce Transformation to occur in 2026, with remaining costs of approximately $150 million expected to be substantially incurred by the end of the first quarter of 2026.

What to watch next

Investors should monitor:

• Execution on UScellular integration targeting $1.2 billion in annual run rate cost synergies with $2.6 billion in costs to achieve over the next two years through fiscal year 2027, and successful network integration and customer migration without service disruptions or elevated churn.

• Trend in postpaid phone churn which increased 7 basis points to 0.93% in 2025 from higher industry switching and rate plan optimization impacts, and the company's ability to sustain pricing power through rate plan optimizations while managing retention.

• Performance of fiber joint ventures with Metronet and Lumos representing 810,000 fiber customers, including wholesale cost structure efficiency, customer acquisition success under the T-Mobile brand, and integration of fiber into the company's broadband strategy, with Lumos requiring an additional capital contribution of approximately $500 million between 2027 and 2028.

• Operating expense trajectory in 2026 after total operating expenses grew 10% in 2025 outpacing revenue growth of 8%, particularly depreciation from 5G network build-out and costs from UScellular acquisition.

• Debt management as total debt and financing lease liabilities reached $88.6 billion with interest expense increasing 11% to $3.8 billion, and the company's balance between capital returns, deleveraging, and strategic investments under the discretionary envelope of over $22 billion from 2026 through 2027.

• Impact of pending spectrum transactions including the potential sale of 800 MHz spectrum licenses to Grain for $2.9 billion cash plus 600 MHz spectrum licenses, which is expected to increase cash income tax liability by approximately $850 million upon closing targeted in the first half of 2026, and the Comcast 600 MHz License Purchase Agreement for total consideration between $1.2 billion and $3.4 billion with closings targeted in first half of 2026 and first half of 2028.

This summary is based solely on excerpts from the company's Form 10-K filing.