TenQ

The T-Mobile story

T-Mobile runs a nationwide wireless and broadband network, with the central question being whether higher spending per account and UScellular integration can sustain growth as new account additions slow.

Written from T-Mobile's own filings with the SEC, and rewritten when it publishes a new earnings release. Updated 2026-09-30.

  • $166.45share price, last close
  • $178.5Bmarket value
  • 22/36TenQ Score checks passed
  • -1.5%growth a year the price assumes

The story in brief

  • Accounts spend more. In the quarter to June 2026, postpaid average revenue per account rose 2% to $152.91, while net account additions fell 13% to 277 thousand.
  • Cash expectations rise. T-Mobile raised its 2026 Adjusted Free Cash Flow guidance to between $18.4 billion and $18.8 billion, including net payments for UScellular merger costs.
  • Debt limits flexibility. Total debt of $86.3 billion compares with $2.8 billion in cash and short-term investments, despite $18.4 billion of free cash flow over the last twelve months.

What drives the business

  • T-Mobile's nationwide network supports its wireless business and uses excess capacity for 5G home broadband, serving 142.4 million postpaid and prepaid customers as of December 31, 2025.
  • Postpaid customers generated 81% of service revenue in 2025, compared with 15% from prepaid and 4% from wholesale and other services, with consumer offerings spanning T-Mobile, Metro by T-Mobile, Mint Mobile and Ultra Mobile.
  • The UScellular acquisition closed in August 2025, and T-Mobile expects approximately $1.2 billion in annual run rate cost synergies upon integration, with integration expected to take approximately two years and costs to achieve of approximately $2.6 billion.
  • Beyond wireless, T-Mobile is expanding fiber broadband and shifting routine transactions into its T-Life app, with management expecting nearly $3 billion of incremental Core Adjusted EBITDA from digitalization and AI by the end of 2027 relative to 2025.
  • In the quarter to June 2026, postpaid service revenue grew 13% to $15.9 billion, while total service revenue grew 9% to $19.0 billion and Core Adjusted EBITDA grew 12% to $9.5 billion.

What the price assumes

At $166.45, the reverse DCF implies annual growth of -1.5% in free cash flow after stock pay for ten years, using a 10.2% discount rate.

T-Mobile delivered 97.9% annual growth in that measure over the last 3 fiscal years, while the TenQ check sets a 50.9% bar by slowing that record halfway toward 4%.

Those historical and modeled rates differ sharply from the 4% growth in company-reported Adjusted Free Cash Flow in the quarter to June 2026, which is a different measure from cash flow after stock pay.

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What could change the story

  • Postpaid account churn rose to 0.99% in the quarter to June 2026 from 0.92% a year earlier, while competitors including AT&T, Verizon, Comcast and Charter compete through pricing, promotions and bundled services.
  • Net income grew 1% to $3.2 billion in the quarter to June 2026, but profit growth over the last twelve months was -13.5%, and annual revenue growth of 3.5% over the last three years fell short of the TenQ sector benchmark of 5.3%.
  • UScellular integration and the digital transition carry execution costs, including $146 million of merger-related costs, including accelerated depreciation, net of tax, and $108 million of retail initiative costs in the quarter to June 2026.
  • The balance sheet fails TenQ's liquidity and leverage checks, with debt to equity at 1.53 compared with 1.02 five years earlier, leaving cash generation important to debt service and shareholder distributions.
  • Return on capital employed of 9.6% falls below the TenQ check's 10.0% bar, making the returns from network spending and acquisitions another constraint on the growth strategy.

What to watch next

  • The 2026 cash guidance calls for operating cash flow between $28.4 billion and $28.8 billion and Adjusted Free Cash Flow between $18.4 billion and $18.8 billion, alongside approximately $10.0 billion of capital expenditures.
  • Management maintained its 2026 expectations for postpaid net account additions between 950 thousand and 1.05 million and Core Adjusted EBITDA between $37.1 billion and $37.5 billion.
  • The next releases will show whether postpaid spending per account continues rising, account churn eases and UScellular integration costs decline as the company works toward its expected synergies.

Sources

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