Why wasn’t the profit beat fully reflected in full-year guidance?

  • In the third quarter of 2026, T-Mobile reported core adjusted EBITDA of 9.62 billion dollars, above Goldman Sachs’ forecast of 9.405 billion dollars and the market consensus of 9.41 billion dollars. Goldman Sachs estimated that quarterly profit beat expectations by approximately 220 million dollars, but the full-year guidance increase was limited, and the share-price reaction could be mixed.
  • The company narrowed its full-year core adjusted EBITDA guidance from 37.1 billion–37.5 billion dollars to 37.35 billion–37.45 billion dollars, raising the midpoint by 100 million dollars. It narrowed its full-year net postpaid account additions guidance from 950 thousand–1.05 million accounts to approximately 1 million accounts, leaving the midpoint unchanged.

What were the highlights and constraints in account and revenue growth?

  • Third-quarter net postpaid account additions were 274 thousand, above Goldman Sachs’ forecast of 250 thousand and the market consensus of 252 thousand. However, net additions were 396 thousand in the same period last year, representing a year-over-year decline of 30.8%.
  • The postpaid account churn rate rose from 0.97% a year earlier to 1.09%, also above Goldman Sachs’ and the market consensus estimate of 1.05%. While additions exceeded expectations, the account retention metric weakened.
  • Average revenue per postpaid account was 155.73 dollars, up 4.2% year over year and above Goldman Sachs’ forecast of 154.51 dollars. Quarterly service revenue was 19.375 billion dollars, up 6.2% year over year and slightly above the market consensus of 19.312 billion dollars.

How have cash flow and the investment assessment changed?

  • Third-quarter adjusted free cash flow was 5.071 billion dollars, up 5.3% year over year and above Goldman Sachs’ forecast of 4.903 billion dollars. Operating cash flow for the same period was 7.341 billion dollars, down 1.6% year over year, while capital expenditure was 2.27 billion dollars, down 14% year over year.
  • The company narrowed its full-year adjusted free cash flow guidance from 18.4 billion–18.8 billion dollars to 18.7 billion–18.8 billion dollars and maintained its capital expenditure guidance at approximately 10 billion dollars. Quarterly share repurchases were 2.4 billion dollars, below Goldman Sachs’ forecast of 3 billion dollars.
  • Goldman Sachs has a buy rating on T-Mobile and a 12-month price target of 211 dollars. The bank noted that intensifying competition in consumer wireless and fixed wireless access could affect revenue and margins; increased investment in fiber broadband could also depress short-term free cash flow.