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

"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."

"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."

"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.""

T-Mobile reported Q4 EPS of $1.88, missing estimates due to $390 million in severance ($293 million after-tax). Revenue totaled $24.33 billion, with service revenue up 10% to $18.7 billion and postpaid service revenue up 13.9%. Core adjusted EBITDA rose 7% to $8.4 billion and full-year 2025 core adjusted EBITDA reached $33.9 billion. Operating cash flow increased 20% to $6.65 billion and adjusted free cash flow was $4.2 billion. The company added 2.4 million postpaid customers and 558,000 broadband subscribers, reaching 9.4 million broadband customers. 2026 guidance targets $37.0–$37.5 billion core EBITDA and approximately $10 billion in capex. Q4 capital returns totaled $3.6 billion.

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