T-Mobile US, Inc. (NASDAQ: TMUS) reported second quarter results yesterday, claiming they have overtaken AT&T in total branded customers as America’s #2 wireless provider. Since closing the Sprint merger and during an unprecedented social and economic climate, the New T-Mobile said it has established itself as the undisputed growth leader in wireless by continuing to lead the industry in total branded net customer additions for the 22nd consecutive quarter.
“Surpassing AT&T to become #2 was a huge milestone to kick off Q2, but that was only the beginning! In our first quarter as a combined company, T-Mobile led the industry in total branded customer adds – even in a challenging environment – and there is no doubt that we are THE leading growth company in wireless,” said Mike Sievert, T-Mobile CEO. “Now we’re setting our sights on #1 – in customer choice and customers’ hearts – and we’ll get there by doing ONLY what the Un-carrier can do: offering customers the most advanced 5G network AND the best value while continuing to make big moves that fix customer pain points and disrupt this industry. I’m excited about what’s to come in this new T-Mobile era – we’re just getting started!”
- Net income decreased year-over-year to $110 million and EPS decreased year-over-year to $0.09 in Q2 2020, primarily due to the Sprint merger and merger-related costs, impacts of COVID-19, and non-cash impairments.
- Merger-related costs were $798 million pre-tax and $635 million, net of tax, in Q2 2020.
- COVID-19-related costs were $341 million pre-tax and $253 million, net of tax, in Q2 2020.
- Non-cash impairment charges of $418 million pre-tax and $366 million, net of tax, in Q2 2020 were related to changes in a postpaid billing system architecture strategy and a strategic shift in the product offering plans for Layer3 enabled through the merger.
- Adjusted EBITDA increased year-over-year to $7.0 billion in Q2 2020 primarily due to the Sprint merger and continued customer growth at T-Mobile, as well as higher lease revenues included in equipment revenue.
- Net cash provided by operating activities decreased year-over-year to $777 million in Q2 2020, as it included the one-time negative impact of $2.3 billion in gross payments for the settlement of interest rate swaps related to merger financing.
- Cash purchases of property and equipment including capitalized interest increased year-over-year to $2.3 billion in Q2 2020, as the company began network integration activities related to the Sprint merger and continued the build-out of its nationwide 5G network..
- Free Cash Flow, excluding gross payments for the settlement of interest rate swaps related to merger financing, increased year-over-year to $1.4 billion in Q2 2020.