T-Mobile US, Inc. TMUS reported first-quarter 2026 earnings of $2.70 per share, beating the Zacks Consensus Estimate of $2.06 by 31.07%. Earnings increased 4.7% from the year-ago quarter’s $2.58.
Total revenues of $23.11 billion topped the consensus mark of $22.96 billion by 0.63% and rose 10.6% year over year. The upside was primarily driven by strong service revenue growth and continued expansion in postpaid accounts and ARPA.
T-Mobile US, Inc. Price, Consensus and EPS Surprise
T-Mobile US, Inc. price-consensus-eps-surprise-chart | T-Mobile US, Inc. Quote
TMUS Posts Strong Service Revenue Growth
T-Mobile generated total service revenues of $18.83 billion in the first quarter, reflecting an 11.3% year-over-year increase. This growth was fueled by higher postpaid service revenues, which climbed 15% to $15.63 billion.
The expansion in service revenues was supported by an increase in postpaid accounts and higher average revenue per account (ARPA). Postpaid ARPA rose 3.9% year over year to $151.93, indicating sustained monetization of its customer base.
T-Mobile Drives Account Growth and ARPA Expansion
T-Mobile reported postpaid net account additions of 217,000 in the quarter, up 6% year over year, highlighting continued customer momentum. Total postpaid accounts reached 34.4 million at quarter-end.
Growth was driven by higher gross additions, including contributions from prior acquisitions and broadband offerings, partially offset by increased industry switching. As shown in the investor factbook (page 4), account growth continues to trend upward despite seasonal softness in sequential additions.
ARPA growth remained a key driver, supported by pricing optimization, increased customers per account and adoption of bundled services such as 5G broadband.
TMUS Profitability Adversely Impacted by Higher Costs
Operating income declined to $4.50 billion from $4.80 billion in the prior-year quarter, reflecting higher operating expenses. Total operating expenses rose to $18.61 billion from $16.09 billion.
Cost pressures were driven by the higher cost of equipment sales and increased depreciation and amortization, partly linked to network investments and merger-related impacts. Net income declined 15.2% year over year to $2.50 billion, primarily due to UScellular-related costs.
Despite these headwinds, the company maintained strong profitability metrics, supported by revenue growth and disciplined cost management in other areas.
T-Mobile Delivers Strong Cash Flow and EBITDA Growth
Core adjusted EBITDA increased 11.9% year over year to $9.24 billion, underscoring solid operating performance. The company also generated $7.22 billion in operating cash flow, up 5.5% from the prior year.
Adjusted free cash flow rose 5% to $4.6 billion, reflecting efficient capital deployment and strong underlying business fundamentals. These metrics highlight T-Mobile’s ability to convert revenue growth into cash generation.
Additionally, the company returned $6 billion to shareholders during the quarter through share repurchases and dividends, reinforcing its commitment to capital returns.
TMUS Balance Sheet and Capital Allocation Trends
T-Mobile ended the quarter with total assets of $214.67 billion and cash and cash equivalents of $3.52 billion. Long-term debt was $83.81 billion, reflecting ongoing investments and acquisition-related financing.
The company continues to allocate capital toward network expansion and acquisitions, including the UScellular wireless business. These investments are aimed at strengthening its competitive positioning and supporting long-term growth.
Management also increased its 2026 shareholder return authorization to $18.2 billion, signaling confidence in future cash flow generation.
T-Mobile Outlook Supported by Strong Momentum
Management raised its full-year 2026 outlook following a strong first-quarter performance. T-Mobile now expects postpaid net account additions of 950,000 to 1.05 million, reflecting continued customer growth momentum. The company reiterated its expectation for full-year service revenue of approximately $77 billion, implying about 8% growth, with second-quarter service revenue projected at roughly $19 billion, up 9% year over year.
T-Mobile also increased its core adjusted EBITDA guidance to $37.1 billion–$37.5 billion, raising the lower end of the range by $100 million. Second-quarter core adjusted EBITDA is expected to be about $9.4 billion, implying 10% year-over-year growth.
Adjusted free cash flow is now expected in the range of $18.1 billion to $18.7 billion for full-year 2026, also up $100 million at the low end. Capital expenditures are projected to remain around $10 billion. Overall, the updated guidance reflects sustained strength in postpaid growth, ARPA expansion and network-driven differentiation, positioning T-Mobile for another year of solid financial performance.
Zacks Rank
T-Mobile currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Arista Networks Inc. ANET is scheduled to release first-quarter 2026 earnings on May 5. The Zacks Consensus Estimate for earnings is pegged at 81 cents per share, suggesting a growth of 24.6% from the year-ago reported figure.
Arista has a long-term earnings growth expectation of 17.9%. Arista delivered an average earnings surprise of 9% in the last four reported quarters.
Akamai Technologies, Inc. AKAM is slated to release first-quarter 2026 earnings on May 7. The Zacks Consensus Estimate for earnings is pegged at $1.61 per share, indicating a 5.3% decline from the year-ago reported figure.
Akamai has a long-term earnings growth expectation of 7%. Akamai delivered an average earnings surprise of 9.4% in the last four reported quarters.
Pinterest, Inc. PINS is set to release first-quarter 2026 earnings on May 4. The Zacks Consensus Estimate for earnings is pegged at 22 cents per share, implying a fall of 4.3% from the year-ago reported figure.
Pinterest has a long-term earnings growth expectation of 24.5%. Pinterest delivered an average negative earnings surprise of 3.6% in the last four reported quarters.
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This article originally published on Zacks Investment Research (zacks.com).