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T-Mobile US: T-Mobile Delivers Industry-Leading Customer And Financial Growth In Q3 2015

The following excerpt is from the company's SEC filing.

2.3 Million New Customers Join the Un-carrier Revolution as the Company Delivers

11% Service Revenue Growth and 42% Adjusted EBITDA Growth Year-over-Year

Third Quarter 2015 Highlights:

Continued customer momentum for the fastest growing wireless company in America:

2.3 million total net adds - 10

consecutive quarter of over 1 million

1.1 million branded postpaid net adds - 5

843,000 branded postpaid phone net adds - expect to lead industry in branded postpaid phone net adds for 7

Branded prepaid net adds of 595,000 - more than tripling branded prepaid net ad ds QoQ

Continued improvement in branded postpaid phone churn - down 18 bps YoY

Customer growth is translating into industry-leading financial growth:

$6.3 billion service revenues, up 11% YoY

$7.8 billion total revenues, up 7% YoY

$1.9 billion Adjusted EBITDA, up 42% YoY

30% Adjusted EBITDA margin, up over 600 bps from 24% in 3Q14

$138 million net income, up from a loss of $94 million in 3Q14

$0.15 earnings per share, continue to expect positive earnings going forward

$411 million free cash flow, up from a loss of $69 million in 3Q14 - expect to be positive for full-year 2015

Stable branded postpaid phone ARPU of $47.99

Growth fueled by America’s fastest and fastest growing 4G LTE network:

300 million 4G LTE POPs covered - achieved the year-end 2015 goal months ahead of schedule

245 Wideband LTE market areas - on track for more than 260 market areas by year-end 2015

“Extended Range LTE” covers nearly 175 million POPs across 204 market areas - on track for more than 350 market areas by year-end 2015

Fastest 4G LTE network in the US - leading in average download speeds for 7

Raising customer outlook for 2015 again while maintaining Adjusted EBITDA target:

Guidance range for branded postpaid net adds increased to 3.8 to 4.2 million - third raise this year

Maintaining target of $6.8 to $7.2 billion of Adjusted EBITDA

Maintaining target of $4.4 to $4.7 billion of cash capex

Financial guidance excludes any impact of JUMP! On Demand and Data Stash

BELLEVUE, Wash. - October 27, 2015

- T-Mobile US, Inc. (NASDAQ: TMUS) today reported third quarter 2015 results which continue to lead the wireless industry in both customer and financial growth. T-Mobile added 2.3 million total net customers and outperformed the industry once again by delivering 11% service revenue growth and 42% growth in Adjusted EBITDA compared to the third quarter of 2014. T-Mobile’s growth has been fueled by the performance of its nationwide 4G LTE network, which now covers over 300 million Americans and continues to be the fastest in the nation.

“We’ve had 10 quarters in a row with over 1 million net new customers, 5 with over a million branded postpaid customers and a total of 2.3 million new customers this quarter alone,” said John Legere, President & CEO of T-Mobile. “Our momentum is strong and our incredible customer growth is translating directly into solid financial growth which makes it crystal clear that putting customers first is just good business.”

12920 SE 38th Street

Bellevue, Washington 98006

Phone 1-800-318-9270

Internet http://www.T-Mobile.com

Industry-Leading Customer Growth in Q3 2015

T-Mobile continued to be the fastest growing wireless company in America in the third quarter of 2015 as customers continue to flock to the Un-carrier for value, flexibility and choice. The Company reported 61.2 million total customers at the end of the third quarter, growing its base by 2.3 million total customers. T-Mobile has successfully delivered over 1 million total net customer additions for the past ten quarters and more than 2 million in five of the past seven quarters. T-Mobile’s branded postpaid net customer additions were 1.1 million, marking the fifth quarter in a row where the Company was able to deliver more than 1 million postpaid nets. Continued focus on the postpaid phone customer segment - the most valuable customer segment of the market - resulted in 843,000 customer additions, the highest in the U.S. wireless industry once again. The Company also reported 242,000 mobile broadband net customer additions in the quarter.

T-Mobile also delivered improvement in branded postpaid phone churn, which was 1.46%, down 18 basis points year-over-year. The year-over-year improvement in churn reflects ongoing improvements in network, customer service, and the overall value of T-Mobile’s offerings in the marketplace.

The MetroPCS brand continues to resonate with consumers purchasing prepaid plans as the Company continues to grow the industry’s biggest and best prepaid brand. T-Mobile’s branded prepaid net customer additions were 595,000 in the third quarter of 2015, the best result since combining with MetroPCS and representing significant improvement both year-over-year and sequentially. Branded prepaid churn was 4.09% in the third quarter of 2015, compared to 4.78% in the third quarter of 2014.

Total devices sold or leased were 8.9 million units in the third quarter of 2015, including 8.1 million smartphones.

Translating Customer Growth into Industry-Leading Financial Growth

In addition to strong customer growth, T-Mobile delivered outstanding financial results. In the third quarter of 2015, the Company expects to again report industry-leading year-over-year growth in service revenues and Adjusted EBITDA.

Service revenues for the third quarter of 2015 grew by 11% year-over-year, primarily due to rapid growth in the Company’s customer base. T-Mobile’s total revenues for the third quarter of 2015 grew by 6.8% year-over-year. The year-over-year change in total revenues was impacted by lower equipment revenues, which declined by 9.3% year-over-year primarily due to the mix shift to JUMP! On Demand. With JUMP! On Demand, equipment revenues associated with leased devices are recognized over the lease term rather than when the device is delivered to the customer, resulting in lower equipment revenues for the quarter.

Branded postpaid phone Average Revenue per User (ARPU) was generally stable at $47.99, as a continued strategic focus on family plan penetration and promotional activity was offset by increasing data attach rates. On a year-over-year basis, branded postpaid phone ARPU declined 3.7%. Branded postpaid Average Billings per User (ABPU) was $62.96 in the third quarter of 2015, up 2.2% year-over-year.

T-Mobile grew Adjusted EBITDA by 42% year-over-year for the third quarter of 2015 to $1.9 billion. The increase was primarily due to higher service revenues from growth in the customer base, strong cost control, especially in cost of services, and decreased losses on equipment sales, partially offset by higher selling, general and administrative (SG&A) expenses due to customer growth. The Company also expanded margins this quarter with its adjusted EBITDA margin at 30% for the third quarter of 2015, up from 24% in the third quarter of 2014. The aggregate impact from JUMP! On Demand and Data Stash on Adjusted EBITDA in the third quarter of 2015 was immaterial.

Net income amounted to $138 million, a strong improvement from a loss of $94 million in the third quarter of 2014 and down from net income of $361 million in the second quarter of 2015. Earnings per share (EPS) in the third quarter of 2015 was $0.15 compared to a loss per share of ($0.12) in the third quarter of 2014 and EPS of $0.42 in the second quarter of 2015...


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