T-Mobile US, Inc., which sells mobile service and home internet, increased service revenue by 8.9% in the second quarter of 2026, while net profit rose just 0.5%. Higher equipment and integration costs, lower interest income and larger fiber-venture losses absorbed much of the gain. The company is expanding its customer relationships, but turning that expansion into more profit and cash after its commitments remains the central test.
Reporting basis: T-Mobile US, Inc. and its consolidated subsidiaries; unaudited U.S. GAAP accounts. The quarter covers April 1–June 30, 2026; the first half covers January 1–June 30, 2026. Comparisons use the corresponding 2025 periods unless stated otherwise. Balance-sheet comparisons use December 31, 2025. Form 10-Q, filed July 23, 2026; accession 0001283699-26-000101; CIK 0001283699. Information cutoff: July 23, 2026, including information available with the earnings release. Sources were checked on October 4, 2026. Subsequent transaction expectations below retain their status at the cutoff.
Source: SEC filing index, July 23, 2026; Form 10-Q, cover, financial statements and Note 1, pages 1–10.
1. More accounts and higher revenue per account lifted sales, but additions slowed
T-Mobile’s service business grew, although acquisitions make the headline growth stronger than a comparison of the existing business alone. Most service sales come from customers billed after receiving service, called postpaid accounts. An account can contain several phones, a home internet connection and other devices. It is therefore different from a single subscriber or phone line.
Second-quarter postpaid revenue rose by $1.775 billion. That more than covered a combined $230 million decline in prepaid and wholesale service revenue. Prepaid customers pay in advance; wholesale customers include other companies that sell service using T-Mobile’s network. Growth was concentrated in postpaid relationships.
| Operating measure; units shown | Second quarter 2024 | Second quarter 2025 | Second quarter 2026 |
|---|---|---|---|
| Service revenue, $ millions | 16,429 | 17,438 | 18,983 |
| Postpaid accounts at quarter-end, thousands | 30,316 | 31,502 | 34,700 |
| Postpaid net account additions, thousands | 301 | 318 | 277 |
| Average monthly postpaid revenue per account, dollars | 142.54 | 149.87 | 152.91 |
Reporting basis: Reported consolidated measures, not acquisition-adjusted growth. The account mix changed with the 2025 acquisitions. Net additions exclude disclosed acquisition/base adjustments. The 2024 factbook called the ending measure “total postpaid customer accounts.”
Sources: 2026 Form 10-Q, statements, page 5, and “Performance Measures,” pages 44–46; T-Mobile second-quarter 2024 Investor Factbook, financial statements and supplementary operating data, printed pages 17 and 20–21.
Service revenue and revenue per account continued upward, while net account additions fell below both earlier second quarters. In the first half, net additions were 494,000 against 523,000 a year earlier. This is slower expansion, not a shrinking account base.
Buying UScellular’s wireless business in August 2025 and acquiring Metronet customer relationships in July 2025 increased the accounts contributing to the 2026 comparison. Lumos also contributed to the first-half comparison after its April 2025 transaction. The filing does not give a complete acquisition-adjusted revenue bridge, so the remaining increase cannot simply be labeled organic growth.
Monthly revenue per postpaid account rose by $3.04 to $152.91 in the quarter. Management attributed the increase to higher fee revenue, including plans that exclude taxes and fees from the advertised plan price, and more connections per account. Home internet adoption and business accounts helped, while fiber and UScellular accounts with fewer connections diluted the average. Promotions and bundles offset part of the increase. The average mixes pricing, fees and services purchased; it is not a uniform customer price increase.
The share of accounts leaving each month, called account churn, rose from 0.92% to 0.99%. Management primarily linked the quarterly increase to a larger share of broadband-only accounts, including Metronet. For the first half, churn rose from 0.93% to 1.02%, with higher industry switching also cited. These disclosures do not establish that mobile-phone retention alone worsened by the same amount.
Prepaid revenue fell 6.4% to $2.473 billion as promotions and plan mix reduced average revenue per customer. Wholesale and other service revenue fell 8.4% to $657 million, including lower revenue from DISH and TracFone. T-Mobile must therefore continue expanding postpaid relationships to offset weaker revenue elsewhere. Since it shifted away from customer-level performance reporting in 2026, account additions, account retention and revenue per account need to be considered together.
Source: Form 10-Q, Notes 2–3 and MD&A, pages 35–46, especially revenue explanations and account definitions.
2. Higher equipment costs, net interest expense and venture losses limited profit growth
Reported profit improved much less than sales, and first-half profit remained below 2025. Service subscriptions generated more revenue, but serving the larger business also cost more. Equipment was a particular pressure point: revenue from equipment increased only $85 million in the quarter, while its reported cost increased $396 million.
| Consolidated results; $ millions except per-share amounts and margins | Q2 2025 | Q2 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Total revenue | 21,132 | 22,791 | 42,018 | 45,898 |
| Service revenue | 17,438 | 18,983 | 34,363 | 37,814 |
| Operating profit | 5,213 | 5,490 | 10,013 | 9,987 |
| Operating margin, calculated | 24.7% | 24.1% | 23.8% | 21.8% |
| Net profit | 3,222 | 3,239 | 6,175 | 5,743 |
| Net profit margin, calculated | 15.2% | 14.2% | 14.7% | 12.5% |
| Diluted earnings per share, dollars | 2.84 | 2.99 | 5.42 | 5.26 |
Calculation notes: Operating profit is revenue less operating expenses. Net profit also reflects interest, other nonoperating items and taxes. Each margin shows how much of every dollar of total revenue remains as the respective profit. These calculations differ from company measures that divide earnings by service revenue.
Source: Form 10-Q, consolidated income statement, page 5.
Equipment costs exceeded equipment revenue by $1.531 billion, versus $1.220 billion a year earlier. These figures exclude depreciation and do not represent the economics of an entire customer relationship: service revenue can compensate for device support over time. Still, the additional $311 million gap consumed part of the service growth. Management cited a greater mix of expensive phones, partly offset by fewer devices sold, mainly prepaid devices. Higher equipment revenue therefore does not establish stronger device volumes.
Service costs increased with UScellular and with payments for access to the Lumos and Metronet fiber networks. Selling and administrative costs also rose, including bad debts and retail changes. A $151 million spectrum-sale gain had reduced the comparable 2025 expense. Increased vendor credits for software services softened the 2026 rise, but the filing does not quantify those credits; their future benefit cannot be assumed.
Depreciation and amortization spread earlier spending on equipment and acquired assets across their useful lives. That expense increased $288 million in the quarter, reflecting acquired assets, network building and faster recognition of the remaining cost of assets scheduled for retirement. This faster recognition is accelerated depreciation. Together, these factors left operating profit up 5.3%, below revenue growth of 7.9%.
Below operating profit, net interest expense rose $133 million. Management primarily attributed the quarterly increase to less interest earned on cash balances and lower yields. Other expense increased $96 million, primarily from T-Mobile’s share of losses at the fiber ventures. An additional $31 million of tax expense completed the bridge: $277 million more operating profit minus those three increases left only $17 million more net profit.
Source: Form 10-Q, MD&A “Results of Operations,” pages 40–43.
Unusual charges explain part, but not all, of the difference between business expansion and reported earnings. The following limited comparison removes only items for which the filing supplies an after-tax amount.
| Selected profit adjustments; $ millions | Q2 2025 | Q2 2026 | First half 2025 | First half 2026 |
|---|---|---|---|---|
| Reported net profit | 3,222 | 3,239 | 6,175 | 5,743 |
| Add back UScellular costs, after tax | 25 | 146 | 35 | 622 |
| Add back separate network restructuring, after tax | 0 | 46 | 0 | 149 |
| Add back workforce transformation, after tax | 0 | 0 | 0 | 105 |
| Remove 2025 spectrum-sale gain, after tax | -113 | 0 | -113 | 0 |
| Profit after only these adjustments, calculated | 3,134 | 3,431 | 6,097 | 6,619 |
Calculation notes: This is an analytical, non-GAAP comparison, not company guidance or a measure of recurring profit. Corresponding pretax UScellular costs were $33 million/$195 million for the two quarters and $47 million/$830 million for the two first halves. The 2026 network charges were $63 million quarterly and $199 million cumulatively; workforce charges were $141 million cumulatively. The 2025 spectrum gain was $151 million pretax. Accelerated depreciation is included in these UScellular and network totals and is not added twice.
Source: Form 10-Q, MD&A, pages 36, 38–39 and 43.
On that limited basis, profit increased 9.5% for the quarter and 8.6% for the first half. The calculation still includes the $108 million pretax retail charge, ordinary depreciation, financing costs, stock compensation and venture losses. It shows that identified charges materially affected the comparison; it does not make those costs disappear from the business.
Management also measures earnings before financing and tax expenses, depreciation, stock compensation and selected costs. This measure, called Core Adjusted EBITDA, rose 11.7% to $9.537 billion in the quarter from $8.541 billion a year earlier. Starting with operating profit, the quarterly reconciliation adds $3.434 billion of depreciation, $212 million of stock compensation including payroll-tax effects, $182 million of UScellular costs excluding depreciation, $52 million of network costs, $16 million of net legal costs and $151 million of other adjustments. There was no quarterly device-lease revenue to subtract.
That measure helps assess operations before several large costs, but it omits the fiber venture losses recorded below operating profit. The business assessment consequently needs both measures: operating expansion is visible, while full reported profitability remains constrained by the cost of building and financing that expansion.
Source: Form 10-Q, Core Adjusted EBITDA reconciliation and footnotes, pages 46–48.
3. UScellular offers planned savings; fiber adds revenue and venture losses
UScellular offers a defined cost-saving opportunity; fiber broadens the product range but is currently adding losses as well as revenue. T-Mobile bought UScellular’s wireless operations to combine customers, spectrum and network infrastructure. Removing duplicate sites, systems and functions is the mechanism behind management’s savings plan.
Management expects $1.2 billion of annual savings once integration is complete: $950 million in operating expenses and $250 million in capital spending. These are expected annual savings after integration, not profit already earned. The expected $2.6 billion cost to achieve them excludes accelerated depreciation and comprises $1.5 billion of operating expenses and $1.1 billion of equipment and infrastructure investment. Substantially all integration costs and associated payments are expected by the end of 2027.
Lower future equipment spending helps cash without an equal immediate profit increase. Conversely, ending leases and retiring sites can produce current expenses before all cash payments occur. First-half UScellular costs of $830 million included $242 million of accelerated depreciation. Net UScellular integration cash payments were only $256 million, illustrating the different timing.
T-Mobile is also retiring low-customer-value network sites outside the acquisition. It expects total costs of $500 million–$800 million, with most incurred by the end of 2026 and completion before the end of 2027. Workforce changes aim to remove management layers and duplication; management intends to reinvest those savings in areas including digital services. Retail changes similarly support simpler digital transactions and larger experience stores. None of these disclosures warrants assuming that every dollar saved becomes an additional dollar of profit.
Source: Form 10-Q, Note 15, pages 30–33, and MD&A, pages 35–39.
Fiber internet carries data through fiber-optic cables to customers’ premises. T-Mobile expands this service through jointly owned businesses, called joint ventures. These ventures build and operate the networks, while T-Mobile owns customer relationships and sells internet service under its brand. T-Mobile records customer revenue and network-access costs in its operating results. It then records its ownership share of venture earnings or losses below operating profit. The full networks are not simply consolidated as wholly owned assets.
Lumos required a $932 million investment for a 50% stake and customers in April 2025. Metronet required $4.6 billion for a 50% stake and residential customers in July 2025. Further planned investments were approximately $700 million for the i3 Broadband arrangement in the second half of 2026 and $2 billion for GoNetspeed and Greenlight Networks in the first half of 2027, subject to approvals and closing conditions. Lumos also carries an expected additional $500 million contribution in 2027–2028.
These partnerships expand T-Mobile’s home internet offering while sharing network ownership. They still require capital, wholesale payments and exposure to early losses. Growing fiber service revenue by itself is therefore insufficient evidence that the expansion is improving consolidated profit.
The competitive reason is tangible. AT&T reported 367,000 consumer and business fiber net additions and 279,000 fixed-wireless additions in the second quarter. It also said 42.5% of households using its advanced home internet services took its wireless service. Those measures have different scopes from T-Mobile’s accounts and should not be ranked directly. They nevertheless show that selling home internet and mobile service together is an active competitive strategy, rather than an opportunity available only to T-Mobile.
Sources: T-Mobile Form 10-Q, Note 3 and MD&A “Fiber Joint Ventures,” pages 13–14 and 37–38; AT&T earnings release, July 22, 2026, “Second-Quarter Highlights.”
T-Mobile reports one operating segment, Wireless, primarily serving the United States. It does not publish separate fiber, advertising and mobile operating profits in this filing. The strongest evidence of success would therefore be lower integration spending alongside better consolidated profit, continued account growth and narrowing venture losses. More customers without improvement in those costs would provide a weaker result.
Source: Form 10-Q, Note 11, pages 26–27, and MD&A “Other expense, net,” page 43.
4. Cash generation rose, but distributions used almost all cash after equipment spending
First-half operating cash covered equipment investment and shareholder payments, with only $29 million left before other investing and financing needs. T-Mobile generated $14.722 billion from operations. Subtracting cash purchases of property and equipment gives the company’s Adjusted Free Cash Flow of $9.396 billion. That definition does not subtract spectrum purchases, venture investments or repayments of equipment-financing leases.
| First-half cash allocation; $ millions | 2025 | 2026 |
|---|---|---|
| Cash from operations | 13,839 | 14,722 |
| Cash purchases of property and equipment | 4,847 | 5,326 |
| Remainder: company Adjusted Free Cash Flow | 8,992 | 9,396 |
| Cash paid for share repurchases | 5,049 | 7,146 |
| Cash dividends paid | 1,999 | 2,221 |
| Remainder after those shareholder payments, calculated | 1,944 | 29 |
Reporting basis: Positive amounts in spending rows are cash uses. Property and equipment purchases include capitalized interest. Repurchases and dividends are cash-flow-statement payments, rather than trade-date purchase totals or dividends declared.
Source: Form 10-Q, cash-flow statement, page 6, and Adjusted Free Cash Flow reconciliation, pages 49–50.
Operating cash increased 6.4% even though net profit fell. This is understandable once the noncash expenses are separated. First-half profit of $5.743 billion included $7.251 billion of depreciation and amortization, $1.575 billion of deferred tax expense, $423 million of stock compensation and $824 million of bad-debt expense. Those expenses reduce profit without equivalent cash payments in the same period; adding them back is part of the cash reconciliation, not evidence that they are economically free.
Customer collection and payment timing then used cash. Accounts receivable absorbed $660 million: sales recognized in profit had not yet produced the same amount of collections. Changes in supplier bills and other accrued obligations reduced operating cash by another $673 million. This is the net effect of changes in those balances, not total payments to suppliers and others. Lower inventory released $228 million. The listed operating-asset and liability changes together used $1.523 billion, versus $1.434 billion a year earlier.
Management reconciled the $883 million increase in operating cash to $972 million more profit after noncash adjustments, partly offset by $89 million more working-capital outflow. Merger-related cash payments were $334 million, including both UScellular and residual Sprint obligations, versus $162 million. These payments remain inside operating cash and the company’s free-cash-flow measure.
Cash tax payments, after refunds, were $767 million, up from $352 million, while tax expense was $1.919 billion. Tax expense and cash payments can fall in different periods because financial reporting and tax rules recognize some items at different times. Deferred tax expense records such timing differences; it is not a promise of permanently low cash taxes.
Source: Form 10-Q, cash-flow statement, page 6; Note 16, page 33; and MD&A “Operating Activities,” pages 48–49.
Total investing outflow was $5.901 billion. Alongside equipment spending, T-Mobile paid $510 million for spectrum and other intangible assets. The prior-year investing comparison included $2.073 billion of proceeds from property, equipment and intangible-asset sales, compared with $111 million in 2026, but also much larger acquisition and venture investment outlays. Network spending alone therefore cannot explain investing cash changes.
Financing used $11.622 billion. New debt provided $6.393 billion, while debt repayments consumed $7.771 billion. Financing-lease principal payments used another $664 million, outside the company’s free-cash-flow definition. Shareholder distributions, employee tax withholding and other financing movements account for the rest.
The complete bridge is $5.976 billion of opening cash including restricted cash, plus $14.722 billion operating inflow, less $5.901 billion investing outflow and $11.622 billion financing outflow, leaving $3.175 billion. Of that ending amount, $350 million was restricted, meaning its use was limited; cash and equivalents excluding restricted cash were $2.825 billion. T-Mobile generated substantial cash, but its chosen combination of distributions, investment and net debt repayment reduced its cash cushion.
Source: Form 10-Q, cash-flow statement, page 6, and Note 16, page 33.
5. Assets contracted while customer credit costs increased
A smaller balance sheet did not mean investment stopped, and lower receivables did not mean credit risk disappeared. Assets fell $5.684 billion during the first half. Cash declined, while depreciation, asset retirements and amortization helped reduce the recorded network and acquired-asset balances.
| Consolidated balance-sheet measures; $ millions | Dec. 31, 2025 | June 30, 2026 |
|---|---|---|
| Cash and equivalents | 5,598 | 2,825 |
| Accounts receivable, net | 4,874 | 5,247 |
| Device installment receivables, current and long-term, net | 7,680 | 7,173 |
| Inventory | 2,405 | 2,191 |
| Property and equipment, net | 38,333 | 36,623 |
| Spectrum licenses | 98,032 | 98,178 |
| Goodwill | 13,678 | 13,667 |
| Other intangible assets, net | 3,843 | 3,295 |
| Total assets | 219,237 | 213,553 |
| Total liabilities, calculated | 160,034 | 157,288 |
| Shareholders’ equity | 59,203 | 56,265 |
Source: Form 10-Q, consolidated balance sheets, page 4.
Net property and equipment fell $1.710 billion despite substantial cash purchases. Depreciation and retirement effects matter, as do the separate financing-lease assets. Disclosed uses include nationwide 5G, UScellular integration and technology platforms. There is no maintenance-versus-expansion split; comparing purchases with depreciation cannot establish one.
Spectrum licenses are rights to use radio frequencies. Their balance rose only $146 million because $653 million of acquisitions was partly offset by $507 million transferred to assets held for sale. Separately, the planned Grain transaction involved approximately $3.6 billion of licenses already classified outside the main spectrum line. Asset classifications therefore matter when judging the size of the network resource base.
Ordinary net accounts receivable increased $373 million, while net device installment receivables declined $507 million. Device balances are reduced both for expected nonpayment and to reflect the timing of future collections. Their gross balance fell from $8.626 billion to $8.130 billion, but the credit-loss allowance increased from $380 million to $406 million.
First-half bad-debt expense rose 40.1% to $824 million. The combined roll-forward, including installment discount balances, reconciles exactly: $1.172 billion opening balance plus $824 million expense, minus $809 million write-offs, plus $80 million discount changes, minus $94 million related to receivable sales, equals $1.173 billion. A nearly unchanged ending balance therefore concealed much higher expense and substantial amounts written off.
For ordinary accounts alone, the allowance fell from $226 million to $216 million because $384 million of write-offs exceeded $374 million of expense. That is not a reserve release. The filing does not fully separate acquisition, account-growth and payment-behavior effects on credit costs. The expense for expected customer nonpayment increased, but the whole increase cannot be attributed to existing customers’ financial stress. This expense measures expected credit losses, not the cost of collecting overdue bills.
Source: Form 10-Q, Notes 4 and 6, pages 14–19, and MD&A capital expenditures, page 53.
Receivable sales also bring forward cash that otherwise would arrive later. T-Mobile had removed $1.659 billion of sold receivables from its balance sheet but still guaranteed part of the buyers’ credit risk. Those guarantees were recorded as $136 million of liabilities. Receivables pledged as security but not sold totaled $856 million and represented T-Mobile’s maximum exposure under the guarantees. The installment sale arrangement expires in November 2026, and the service receivable arrangement in February 2027. Net cash proceeds under the arrangements declined $42 million during the first half, so expanding this source of cash did not explain operating cash growth.
Operating liabilities also contracted. Accounts payable and accrued liabilities fell $1.506 billion, including lower supplier balances and payroll accruals. Meanwhile, deferred tax liabilities increased $1.642 billion to $21.225 billion. These obligations differ from borrowings in their causes and payment schedules.
Source: Form 10-Q, balance sheet and Notes 5 and 16, pages 4, 16–17 and 33.
6. Liquidity remains available, but refinancing and leases require continuing cash
T-Mobile reduced debt while retaining a large unused credit line, although near-term obligations exceed cash on hand. Debt excluding financing leases and tower obligations declined from $86.282 billion to $84.621 billion. Of the ending balance, $6.117 billion was short-term, exceeding cash on hand. Because cash fell faster than debt, debt less unrestricted cash increased from $80.684 billion to $81.796 billion. This calculated measure excludes leases and tower obligations; it is not the covenant measure.
The $10 billion revolving credit facility was undrawn and matures in January 2031. Its leverage covenant is 4.5 times under the agreement’s definition; T-Mobile reported compliance with all restrictive debt covenants at June 30. The filing does not supply enough detail to substitute a simple debt-to-earnings calculation for that contractual test. A separate $2 billion commercial-paper program was also undrawn.
Refinancing does not automatically reduce cost. The company repaid 2026 notes carrying coupons of 1.5%, 2.25% and 2.625%, while January borrowing included 5% notes due in 2036 and 5.85% notes due in 2056. Its effective debt interest rate, excluding derivatives and capitalized interest, rose from 4.1% to 4.3% for the quarter. First-half cash interest payments, excluding interest added to asset costs, were $2.173 billion, against $1.926 billion previously.
The last full contractual schedule, dated December 31, 2025, showed $15.246 billion of debt obligations in the one-to-three-year bucket and $14.062 billion in the three-to-five-year bucket. Contractual interest totaled $44.105 billion across all future periods, including $3.593 billion within one year. These are historical schedule amounts, not June maturities: 2026 repayments and new issues have changed the profile. They show why extending repayment dates and controlling borrowing costs remain recurring funding tasks.
Sources: 2026 Form 10-Q, Notes 8 and 16, pages 21–23 and 33, and liquidity discussion, pages 50–53; 2025 Form 10-K, “Contractual Obligations,” page 53.
Some funding is tied to customer collections. The new $1 billion receivables-backed facility has an initial scheduled expiry in February 2027, followed by principal repayments. It is secured by service receivables, customer contracts and future collections. Another $2 billion of asset-backed notes is secured by device receivables, with expected repayments concentrated in 2027 and 2028. These arrangements diversify funding but also commit future customer cash to lenders.
Operating lease liabilities totaled $29.058 billion, down from $30.185 billion. First-half operating lease payments were $2.840 billion. Financing-lease liabilities were $2.299 billion, and $710 million of new financing-lease assets were acquired without an immediate cash investing payment. Such leases allow equipment use now but create payments later.
Tower obligations add $3.461 billion, separate from the debt and lease totals above. Expected payments for the following twelve months were approximately $393 million. These arise from tower arrangements accounted for as financing and should not be added again to ordinary lease payments without checking their scope. T-Mobile uses agreements that exchange payments in different currencies, called currency swaps, to effectively convert its €7.3 billion of euro debt into dollar borrowings. These agreements offset accounting gains and losses caused by exchange-rate changes, but interest still has to be paid.
Source: Form 10-Q, balance sheet, Notes 7–9 and 16, pages 4, 19–25 and 33.
Future transactions compete for this funding capacity. At the cutoff, the Grain spectrum sale was expected to bring $2.9 billion of cash plus Grain’s 600 MHz spectrum licenses, while increasing cash tax liability by roughly $850 million. The cash consideration less that tax liability is about $2.05 billion before other effects; receipts and tax payments need not occur together. The sale was expected to close in the third quarter, with no material effect on reported profit. The cash would come from selling assets and was not included in operating cash already generated.
Other calls included the planned fiber investments, the remaining $420 million Ka’ena consideration and service payments in cash and shares, and spectrum purchases. Comcast consideration ranges from $1.2 billion to $3.4 billion in total, with $46 million closed in June and the remainder targeted for the first half of 2028. This leaves meaningful flexibility through transaction timing and discretionary distributions, but also makes preserving access to funding important.
Source: Form 10-Q, Notes 2, 3 and 6, and MD&A liquidity discussion, pages 11–14, 18–19 and 51–54.
7. Repurchases lifted earnings per share while reducing equity
Management describes its repurchases and dividends as part of a balanced allocation between business investment and shareholder distributions. Dividends pay cash to shareholders; repurchases reduce the shares among which future earnings are divided, increasing each remaining share’s claim on those earnings if profit is unchanged. Both use cash that could otherwise support investment or debt repayment.
Most quarterly earnings-per-share growth came from dividing profit among fewer shares. Diluted earnings per share rose 5.3%, while net profit increased only 0.5%. The diluted average share count fell from 1.135 billion to 1.082 billion. Using the prior-year share count with current profit would produce about $2.85 per share, compared with the reported $2.99.
In April, management increased the combined 2026 authorization for repurchases and cash dividends from up to $14.6 billion to up to $18.2 billion. T-Mobile repurchased 34.751 million shares in the first half. These became treasury shares held by the company; they were not reported as retired shares.
Equity—the assets left after subtracting liabilities—fell $2.938 billion to $56.265 billion even though the company earned a profit. Retained earnings, the accumulated profit kept after dividends, rose $3.552 billion: $5.743 billion of profit less $2.191 billion of dividends declared. That increase was outweighed by the $7.122 billion increase in the recorded cost of shares held in treasury.
The equity account used for share issuance and share-based compensation, called additional paid-in capital, rose $419 million. Its movements were $466 million from stock compensation and $135 million from the employee purchase plan, less $185 million of award-related withholding, plus $3 million of other movements. A separate equity account for certain gains and losses recorded outside net profit improved $213 million, mainly from accounting changes related to financial hedges. That improvement reduced accumulated other comprehensive loss and was not an operating cash inflow.
Issued shares increased by 2.631 million, while outstanding shares fell by 32.113 million. The distinction shows how employee issuance and other movements partly offset repurchases. The $423 million stock-compensation expense in operating cash, the $466 million equity entry and the $415 million first-half EBITDA adjustment have different scopes; they should not be forced into one number.
The program gives management a material cash-allocation choice. First-half cash distributions nearly exhausted cash after equipment purchases, while net borrowing declined. Adjusting the pace of future repurchases could preserve liquidity for integration or fiber without changing the underlying service business.
Source: Form 10-Q, financial statements, pages 4–7; Notes 12–13; and EBITDA footnotes and capital-allocation discussion, pages 47 and 53–54.
8. Higher cash forecasts leave reported profit and legal costs uncertain
The outlook supports continued cash generation, but it does not establish a matching increase in reported profit. On July 23, management raised full-year operating-cash guidance to $28.4 billion–$28.8 billion and Adjusted Free Cash Flow guidance to $18.4 billion–$18.8 billion. Expected cash equipment purchases remained approximately $10 billion. Net account additions were still forecast at 950,000–1.05 million, and Core Adjusted EBITDA at $37.1 billion–$37.5 billion.
Subtracting first-half actuals from those forecasts implies second-half operating cash of $13.678 billion–$14.078 billion and free cash flow of $9.004 billion–$9.404 billion. These are calculated remainders, not separate company forecasts. The free-cash-flow guidance does not assume material net cash inflows from securitization—arrangements that raise cash against customer receivables. Management did not provide a net-profit forecast.
Source: T-Mobile earnings release, July 23, 2026, “Raising Cash Flow Guidance,” page 3; first-half actuals from the Form 10-Q, pages 6 and 50.
Cybersecurity remains an operating and financial issue. The 2021 attack led to $350 million of class-settlement funding and $150 million of required security spending in 2022–2023. A roughly $400 million pretax charge recorded in 2022 covered the class settlement and separate settlements; it is not an additional payment to add to the $350 million. Further losses remain reasonably possible, without a reliable additional-loss estimate. The 2023 incident affected approximately 37 million accounts and also generated litigation and regulatory inquiries. Past payments do not close every remaining exposure.
Other unresolved matters include the Sprint-merger antitrust action and shareholder litigation concerning transaction terms and repurchase programs. T-Mobile also has network-build and national-security obligations arising from merger approvals. Failure to meet those requirements can create penalties and additional costs. No precise contingent-loss amount should be inserted where the filing cannot estimate one.
Tax uncertainty is separate from cash-tax timing. Some tax savings are too uncertain to count fully in the accounts; these are called unrecognized tax benefits. The annual filing reported $1.479 billion at December 31, 2025, including approximately $1.3 billion that would affect tax expense as a share of pretax profit if recognized. This is a historical tax-uncertainty balance, not a forecast cash bill or a June 2026 update.
Sources: Form 10-Q, Note 14, pages 28–30, and updated cybersecurity risk factor, page 57; 2025 Form 10-K, Note 14, unrecognized-tax-benefit reconciliation.
9. The business is expanding; the next task is keeping more of what it earns
T-Mobile has a larger revenue-producing business and substantial operating cash, but the financial benefit of its expansion is still incomplete. Higher revenue per account and a growing account base provide support for the strategy. The limited earnings adjustment also shows that identified restructuring and transaction effects materially depressed the reported comparison.
The next stage requires more than adding revenue. UScellular integration needs to deliver its operating savings, fiber needs to improve after wholesale costs and venture losses, and account retention must hold up as bundles become more important. Faster credit-cost growth and weaker prepaid revenue show that these gains cannot be taken for granted.
Funding appears manageable through operating cash and available credit, but the current distribution pace leaves little cash after equipment spending for other commitments. Management’s ability to vary repurchases and transaction spending is therefore valuable. The clearest evidence of progress would be continued account growth combined with better reported margins, lower integration payments and a less demanding overall cash allocation—not merely a larger adjusted earnings number.
Technical calculation notes
- Growth and margins: Growth equals current amount divided by the comparable prior amount, minus one. Quarterly service growth is 18,983 ÷ 17,438 − 1 = 8.86%; quarterly net-profit growth is 3,239 ÷ 3,222 − 1 = 0.53%. Operating margins use total revenue, as specified beside the table. Percentages are rounded; changes between percentages are percentage points.
- Earnings bridges: Quarterly net-profit change is 277 − 133 − 96 − 31 = $17 million. Selected adjusted quarterly amounts are 3,239 + 146 + 46 = 3,431 and 3,222 + 25 − 113 = 3,134. First-half amounts are 5,743 + 622 + 149 + 105 = 6,619 and 6,175 + 35 − 113 = 6,097. These do not remove every unusual item. The full quarterly Core Adjusted EBITDA sum is 5,490 + 3,434 + 212 + 182 + 52 + 16 + 151 = $9,537 million. The comparable 2025 calculation is 5,213 operating profit + 3,146 depreciation and amortization + 178 stock compensation + 33 UScellular costs − 4 net legal recoveries − 19 other net adjustments − 6 device-lease revenue = $8,541 million.
- Profit to operating cash: First-half net profit and noncash/other adjustments total 5,743 + 7,251 + 423 + 1,575 + 824 + 37 + 392 = $16,245 million. Operating-asset and liability movements sum to −660 + 48 + 228 + 2,161 − 321 − 673 − 2,194 − 112 = −$1,523 million. Together they produce $14,722 million. The $392 million “Other, net” is retained as reported, rather than assigned an invented cause.
- Cash allocation and scope: 14,722 − 5,326 = $9,396 million; 9,396 − 7,146 − 2,221 = $29 million. Ending cash including restrictions is $3,175 million, consisting of $2,825 million cash and equivalents plus $267 million current and $83 million noncurrent restricted cash. Cash repurchases differ from equity entries because the statements measure different accounting events; no unsupported exact timing bridge is assumed.
- Balance sheet and equity: At June 30, 23,554 current liabilities + 133,734 long-term liabilities + 56,265 equity = $213,553 million assets. At December 31, 24,500 + 135,534 + 59,203 = $219,237 million. Equity movement is +419 paid-in capital − 7,122 treasury-stock cost + 213 other comprehensive income + 3,552 retained earnings = −$2,938 million. Issued shares minus treasury shares equals outstanding shares at both dates.
- Source and context checks: Core financial facts were also checked against the filing’s SEC XBRL instance, using consolidated contexts without segment dimensions. Standard U.S. GAAP facts checked included assets, equity, revenue, operating income, net income, operating cash and property/equipment purchases. Monetary facts are USD, converted to millions for tables; income and cash facts use the stated three- or six-month duration, while balance-sheet facts use the specified date. The separate guarantor-group accounts are not substituted for consolidated results.
Source: Form 10-Q, financial statements and the footnotes cited beside each analysis; SEC filing index.
This report is for general information and business analysis, not investment advice. Forecasts are management expectations as of the stated cutoff, and actual results may differ.