T-Mobile US Inc.

07/23/2026 | Press release | Distributed by Public on 07/23/2026 04:32

Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q ("Form 10-Q") of T-Mobile US, Inc. ("T-Mobile," "we," "our," "us" or the "Company") includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, including information concerning our future results of operations, are forward-looking statements. These forward-looking statements are generally identified by the words "anticipate," "believe," "estimate," "expect," "intend," "may," "could" or similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. The following important factors, along with the Risk Factors included in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and Part II, Item 1A of this Form 10-Q, could affect future results and cause those results to differ materially from those expressed in the forward-looking statements:
•competition, industry consolidation and changes in the market for wireless communications services and other forms of connectivity;
•cyberattacks, disruptions, data loss or other security breaches;
•our inability to adopt and deploy network technologies in a timely and effective manner;
•our inability to effectively execute our digital initiatives and drive customer and employee adoption of emerging technologies;
•our inability to retain or motivate key personnel, hire qualified personnel or maintain our corporate culture;
•system failures and business disruptions, allowing for unauthorized use of or interference with our network and other systems;
•the scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use;
•the timing and effects of any pending and future acquisition, investment, joint venture, merger, or divestiture involving us, including our inability to obtain any required regulatory approval necessary to consummate any such transactions or to achieve the expected benefits of such transactions;
•adverse economic, political or market conditions in the U.S. and international markets, including changes resulting from increases in oil prices, inflation or interest rates, tariffs and trade restrictions, supply chain disruptions, fluctuations in global currencies, immigration policies, and impacts of geopolitical instability, such as global conflict, wars and further escalations thereof;
•operational delays, higher procurement costs, such as memory chip cost impacts on smartphones, and operational costs, and increased regulatory and compliance complexities, for example, as a result of changes to trade policies, including higher tariffs, restrictions and other economic disincentives to trade;
•our inability to successfully deliver new products and services;
•any failure or inability of our third parties (including key suppliers) to provide products or services for the operation of our business;
•sociopolitical volatility and polarization and risks related to environmental, social and governance matters;
•our substantial level of indebtedness and our inability to service our debt obligations in accordance with their terms;
•changes in the credit market conditions, credit rating downgrades or an inability to access debt markets;
•our inability to maintain effective internal control over financial reporting;
•compliance with the current regulatory framework, including our national security obligations, and any changes in regulations or in the regulatory framework under which we operate;
•laws and regulations relating to the handling of privacy, data protection and artificial intelligence ("AI");
•unfavorable outcomes of and increased costs from existing or future regulatory or legal proceedings;
•difficulties in protecting our intellectual property rights or if we infringe on the intellectual property rights of others;
•our offering of regulated financial services products and exposure to a wide variety of state and federal regulations;
•new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations;
•our wireless licenses, including those controlled through leasing agreements, are subject to renewal and may be revoked;
•our exclusive forum provision as provided in our Certificate of Incorporation;
•interests of Deutsche Telekom AG ("DT"), our controlling stockholder, which may differ from the interests of other stockholders;
•our current and future stockholder return programs may not be fully utilized, and our share repurchases and dividend payments pursuant thereto may fail to have the desired impact on stockholder value; and
•future sales of our common stock by DT and our inability to attract additional equity financing outside the United States due to foreign ownership limitations by the Federal Communications Commission ("FCC").
Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law.
Investors and others should note that we announce material information to our investors using our investor relations website (https://investor.t-mobile.com), newsroom website (https://t-mobile.com/news), press releases, SEC filings and public conference calls and webcasts. We intend to also use certain social media accounts as a means of disclosing information about us and our services and for complying with our disclosure obligations under Regulation FD (the @TMobileIR X account (https://x.com/TMobileIR), the @SriniGopalan X account (https://x.com/SriniGopalan) and our CEO's LinkedIn account (https://www.linkedin.com/in/srini-gopalan/), both of which Mr. Gopalan also uses as a means for personal communications and observations, and the @TMobileCFO X account (https://x.com/tmobilecfo) and our Chief Financial Officer's LinkedIn account (https://www.linkedin.com/in/peter-osvaldik-3887394), both of which Mr. Osvaldik also uses as a means for personal communications and observations). The information we post through these social media channels may be deemed material. Accordingly, investors should monitor these social media channels in addition to following our press releases, SEC filings and public conference calls and webcasts. The social media channels that we intend to use as a means of disclosing the information described above may be updated from time to time as listed on our investor relations website.
Overview
The objectives of our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") are to provide users of our condensed consolidated financial statements with the following:
•A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
•Context to the condensed consolidated financial statements; and
•Information that allows assessment of the likelihood that past performance is indicative of future performance.
Our MD&A is provided as a supplement to, and should be read together with, our unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2026, included in Part I, Item 1 of this Form 10-Q, and audited consolidated financial statements, included in Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025. Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc. and its consolidated subsidiaries.
Acquisition of UScellular Wireless Business
Transaction Overview
On August 1, 2025 (the "UScellular Acquisition Date"), we completed the acquisition (the "UScellular Acquisition") of substantially all of United States Cellular Corporation's ("UScellular") wireless operations and select spectrum assets and the acquisition of substantially all of the wireless operations assets of each of Farmers Cellular Telephone Company, Inc., Iowa RSA No. 9 Limited Partnership and Iowa RSA No. 12 Limited Partnership (collectively, the "UScellular Wireless Business"). In exchange, on the UScellular Acquisition Date, we transferred cash of $2.8 billion. Additionally, the closing of the UScellular Acquisition obligated us to execute exchange offers, which were launched on May 23, 2025 (the "Exchange Offers"). On August 5, 2025, we executed the Exchange Offers of certain senior notes of UScellular with an aggregate outstanding principal balance of $1.7 billion for T-Mobile notes.
For more information regarding the UScellular Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
UScellular Merger-Related Costs
Merger-related costs associated with the UScellular Acquisition to date include:
•Integration costs to achieve efficiencies in network, retail, information technology and back office operations and migrate customers to the T-Mobile network and billing systems;
•Restructuring costs, including contract terminations, severance and network decommissioning; and
•Transaction costs, including legal and professional services related to the completion of the UScellular Acquisition.
See Note 15 - Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements for more information.
UScellular merger-related costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See "Adjusted EBITDA and Core Adjusted EBITDA" in the "Performance Measures" section of this MD&A. Net cash payments for UScellular merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Condensed Consolidated Statements of Cash Flows and our calculation of Adjusted Free Cash Flow.
UScellular merger-related costs are presented below:
(in millions) Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
2026 2025 $ % 2026 2025 $ %
UScellular merger-related costs
Cost of services, exclusive of depreciation and amortization $ 44 $ - $ 44 NM $ 388 $ - $ 388 NM
Cost of equipment sales, exclusive of depreciation and amortization 23 - 23 NM 37 - 37 NM
Selling, general and administrative 115 33 82 248 % 163 47 116 247 %
Depreciation and amortization 13 - 13 NM 242 - 242 NM
Total UScellular merger-related costs $ 195 $ 33 $ 162 491 % $ 830 $ 47 $ 783 NM
Net cash payments for UScellular merger-related costs $ 142 $ 31 $ 111 358 % $ 256 $ 40 $ 216 540 %
NM - Not meaningful
Anticipated Impacts
As a result of our UScellular Acquisition restructuring and integration activities, we expect to realize cost efficiencies by eliminating redundancies within our combined network as well as other business processes and operations. Upon completion of these activities, we expect to achieve total annual run rate cost synergies of $1.2 billion, consisting of $950 million in operating expenses and $250 million in capital expenditures. We currently expect total costs to achieve, excluding accelerated depreciation, to be approximately $2.6 billion, currently expected to be composed of $1.5 billion of UScellular merger-related costs recognized within operating expenses and $1.1 billion of capital expenditures.
Substantially all costs and associated payments for our UScellular Acquisition restructuring and integration activities are expected to be incurred by the end of fiscal year 2027. We are evaluating additional restructuring initiatives associated with the UScellular Acquisition, which are dependent on consultations and negotiations with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the costs and related payments.
Acquisition of Vistar Media Inc.
On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc. ("Vistar"), a provider of technology solutions for digital-out-of-home advertisements (the "Vistar Acquisition").
On February 3, 2025 (the "Vistar Acquisition Date"), we completed the Vistar Acquisition in exchange for $621 million in cash.
For more information regarding the Vistar Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Blis Holdco Limited
On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100% of the outstanding capital stock of Blis Holdco Limited ("Blis"), a provider of advertising solutions (the "Blis Acquisition").
On March 3, 2025 (the "Blis Acquisition Date"), we completed the Blis Acquisition in exchange for $180 million in cash.
For more information regarding the Blis Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Ka'ena Corporation
On May 1, 2024 (the "Ka'ena Acquisition Date"), we completed the merger with Ka'ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, "Ka'ena"), and as a result, Ka'ena became a wholly owned subsidiary of T-Mobile (the "Ka'ena Acquisition"). The total purchase price consists of an upfront payment on the Ka'ena Acquisition Date and an earnout payable in the second half of 2026. Based on the adjusted amount paid upfront, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.
For more information regarding the Ka'ena Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Sprint Merger-Related Costs
As of June 30, 2024, we have incurred substantially all restructuring and integration costs associated with our merger (the "Sprint Merger") with Sprint Corporation ("Sprint") and, accordingly, no longer separately disclose Sprint Merger-related costs. The cash payments for the Sprint Merger-related costs incurred extend beyond 2026 (together with the cash payments for UScellular merger-related costs, "net payments for Merger-related costs") and primarily relate to operating leases for which we have recognized accelerated lease expense.
Fiber Joint Ventures
Our fiber strategy includes joint ventures focusing on market identification and selection, build plans, network engineering and design, network deployment and customer installation, with us owning customer relationships and selling fiber service under the T-Mobile brand.
On April 1, 2025, we completed the joint acquisition of Lumos ("Lumos"), a fiber-to-the-home platform. During the three months ended June 30, 2025, we invested $932 million to acquire a 50% equity interest in the joint venture and fiber customers. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million between 2027 and 2028 under the existing business plan. Following the joint acquisition, Lumos transitioned to a wholesale model where we are the anchor tenant owning residential and small business customer relationships.
On July 24, 2025, we completed the joint acquisition of Metronet Holdings, LLC and certain of its affiliates (collectively, "Metronet"), a fiber-to-the-home platform. During the three months ended September 30, 2025, we invested $4.6 billion to acquire a 50% equity interest in the joint venture and residential fiber customers. Following the joint acquisition, Metronet became a wholesale services provider, and its residential fiber retail operations and customers transitioned to us.
On April 24, 2026, we entered into a definitive agreement with an affiliate of Wren House Infrastructure Management Limited ("Wren House") to establish a joint venture that will acquire i3 Broadband, one of Wren House's existing fiber portfolio companies. The transaction with Wren House is expected to close in the second half of 2026, subject to customary closing conditions and regulatory approvals, at which time we expect to invest approximately $700 million to acquire a 50% equity interest in the joint venture and substantially all existing residential fiber customers.
On April 25, 2026, we entered into definitive agreements with affiliates of Oak Hill Capital Management, LLC ("Oak Hill") to establish a joint venture that will acquire and combine GoNetspeed and Greenlight Networks, two of Oak Hill's existing fiber portfolio companies. The transaction with Oak Hill is expected to close in the first half of 2027, subject to customary closing
conditions and regulatory approvals, at which time we expect to invest approximately $2.0 billion to acquire a 50% equity interest in the joint venture and substantially all existing residential fiber customers.
Upon closing of the transactions, we account for the joint ventures under the equity method of accounting with our proportionate share of earnings (losses) presented within Other expense, net on our Condensed Consolidated Statements of Comprehensive Income. Additionally, upon closing of the transactions, we recognize revenues for fiber customers and the related wholesale costs paid to the joint ventures for network access within Postpaid revenues and Cost of services, respectively, on our Condensed Consolidated Statements of Comprehensive Income.
For more information regarding the i3 Broadband joint venture and GoNetspeed and Greenlight Networks joint venture, see Note 3 - Joint Ventures of the Notes to the Condensed Consolidated Financial Statements.
Joint Venture with AT&T and Verizon
On May 14, 2026, we announced that we have agreed in principle to form a new joint venture with AT&T Inc. and Verizon Communications Inc., or wholly owned subsidiaries thereof, which aims to end wireless dead zones in the U.S., including in rural areas, by pooling certain spectrum resources to increase capacity and help satellite providers reach more customers through a unified platform. This joint venture is expected to accelerate direct-to-device communications by using satellite-based technologies to address coverage gaps, especially in unserved and underserved communities. The joint venture remains subject to negotiating definitive agreements between the parties and, if finalized, would be subject to certain customary closing conditions. At closing, in exchange for an equity interest in the joint venture, we expect to invest cash and license certain intellectual property to the joint venture, and will also commit to provide access to certain spectrum licenses to satellite service providers who contract with the joint venture.
Network Restructuring Initiative
Recent technological advancements have enhanced our Customer-Driven Coverage insights, enabling us to identify, assess and shut down low customer value sites. In the fourth quarter of 2025, we began implementing restructuring initiatives to identify and realize these cost savings on our network, excluding activities associated with the UScellular Acquisition (the "Network Restructuring Initiative"). The major activities associated with the Network Restructuring Initiative include the rationalization of network and backhaul services and the decommissioning of cell sites and distributed antenna systems to reduce our overall network cost. Our Network Restructuring Initiative also includes the termination of certain of our operating leases for cell sites and switch sites.
Network Restructuring Initiative costs are presented below:
Three Months Ended
June 30, 2026 		Six Months Ended
June 30, 2026
(in millions)
Network Restructuring Initiative
Cost of services, exclusive of depreciation and amortization $ 52 $ 128
Depreciation and amortization 11 71
Total Network Restructuring Initiative costs $ 63 $ 199
Network Restructuring Initiative costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See "Adjusted EBITDA and Core Adjusted EBITDA" in the "Performance Measures" section of this MD&A.
Our Network Restructuring Initiative is expected to be completed prior to the end of 2027, with a majority of costs incurred by the end of 2026. We currently expect to incur between $500 million and $800 million of total costs associated with the Network Restructuring Initiative. We are evaluating additional restructuring activities associated with the Network Restructuring Initiative, which are dependent on consultations and negotiations with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.
See Note 15 - Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements for more information.
2025-2026 Workforce Transformation
In the fourth quarter of 2025, we began implementing a restructuring initiative to streamline operations by centralizing leaders and teams, reducing organizational layers and eliminating duplicative roles (the "2025-2026 Workforce Transformation"). We
intend to reinvest the expected cost savings from the 2025-2026 Workforce Transformation into the business, including into our digital initiatives.
During the six months ended June 30, 2026, we recorded a pre-tax charge of $141 million related to the 2025-2026 Workforce Transformation, which are included in Cost of services and Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. We have incurred substantially all of the costs associated with our 2025-2026 Workforce Transformation initiative and expect substantially all remaining associated employee separations and related cash outflows to occur throughout 2026.
See Note 15 - Restructuring Costs of the Notes to the Condensed Consolidated Financial Statements for more information.
Retail Initiatives
In connection with our ongoing digital initiatives to simplify routine transactions, as well as enhance customer experiences by transitioning in part to large-format experience stores, we began closing certain dealer and corporate owned stores in the second quarter of 2026. The major costs associated with these retail initiatives include contract termination, severance and costs associated with terminated operating leases. Costs associated with the closure of stores acquired in the UScellular Acquisition are included within UScellular merger-related costs.
During the three and six months ended June 30, 2026, we recorded a pre-tax charge of $108 million related to these retail initiatives, which is included in Selling, general and administrative expenses on our Condensed Consolidated Statements of Comprehensive Income. We are evaluating additional restructuring activities associated with our retail initiatives, which are dependent on negotiations with certain counterparties and the expected impact on our business operations.
Results of Operations
Set forth below is a summary of our consolidated financial results:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
(in millions) 2026 2025 $ % 2026 2025 $ %
Revenues
Postpaid revenues $ 15,853 $ 14,078 $ 1,775 13 % $ 31,482 $ 27,672 $ 3,810 14 %
Prepaid revenues 2,473 2,643 (170) (6) % 4,990 5,286 (296) (6) %
Wholesale and other service revenues 657 717 (60) (8) % 1,342 1,405 (63) (4) %
Total service revenues 18,983 17,438 1,545 9 % 37,814 34,363 3,451 10 %
Equipment revenues 3,524 3,439 85 2 % 7,520 7,143 377 5 %
Other revenues 284 255 29 11 % 564 512 52 10 %
Total revenues 22,791 21,132 1,659 8 % 45,898 42,018 3,880 9 %
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below 2,978 2,717 261 10 % 6,317 5,319 998 19 %
Cost of equipment sales, exclusive of depreciation and amortization shown separately below 5,055 4,659 396 8 % 10,543 9,457 1,086 11 %
Selling, general and administrative 5,834 5,397 437 8 % 11,800 10,885 915 8 %
Depreciation and amortization 3,434 3,146 288 9 % 7,251 6,344 907 14 %
Total operating expenses 17,301 15,919 1,382 9 % 35,911 32,005 3,906 12 %
Operating income 5,490 5,213 277 5 % 9,987 10,013 (26) - %
Other expense, net
Interest expense, net (1,055) (922) (133) 14 % (2,086) (1,838) (248) 13 %
Other expense, net (107) (11) (96) 873 % (239) (57) (182) 319 %
Total other expense, net (1,162) (933) (229) 25 % (2,325) (1,895) (430) 23 %
Income before income taxes 4,328 4,280 48 1 % 7,662 8,118 (456) (6) %
Income tax expense (1,089) (1,058) (31) 3 % (1,919) (1,943) 24 (1) %
Net income $ 3,239 $ 3,222 $ 17 1 % $ 5,743 $ 6,175 $ (432) (7) %
Statement of Cash Flows Data
Net cash provided by operating activities $ 7,500 $ 6,992 $ 508 7 % $ 14,722 $ 13,839 $ 883 6 %
Net cash used in investing activities (3,052) (1,559) (1,493) 96 % (5,901) (4,968) (933) 19 %
Net cash used in financing activities (5,182) (7,205) 2,023 (28) % (11,622) (4,012) (7,610) 190 %
Non-GAAP Financial Measures
Adjusted EBITDA $ 9,537 $ 8,547 $ 990 12 % $ 18,778 $ 16,806 $ 1,972 12 %
Core Adjusted EBITDA 9,537 8,541 996 12 % 18,777 16,799 1,978 12 %
Adjusted Free Cash Flow 4,797 4,596 201 4 % 9,396 8,992 404 4 %
The following discussion and analysis is for the three and six months ended June 30, 2026, compared to the same periods in 2025, unless otherwise stated.
Total revenues increased $1.7 billion, or 8%, for the three months ended and increased $3.9 billion, or 9%, for the six months ended June 30, 2026. The components of these changes are discussed below.
Postpaid revenues increased $1.8 billion, or 13%, for the three months ended and increased $3.8 billion, or 14%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•Higher average postpaid accounts, including following the acquisitions of UScellular and Metronet; and
•Higher postpaid ARPA. See "Postpaid ARPA" in the "Performance Measures" section of this MD&A.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher average postpaid accounts, including following the acquisitions of UScellular, Metronet and Lumos; and
•Higher postpaid ARPA. See "Postpaid ARPA" in the "Performance Measures" section of this MD&A.
Prepaid revenues decreased $170 million, or 6%, for the three months ended and decreased $296 million, or 6%, for the six months ended June 30, 2026, primarily from lower average revenue per customer, primarily from dilution from promotional activity and rate plan mix.
Wholesale and other service revenues decreased $60 million, or 8%, for the three months ended and decreased $63 million, or 4%, for the six months ended June 30, 2026, primarily from lower MVNO revenues, including lower DISH and TracFone MVNO revenues.
Equipment revenues increased $85 million, or 2%, for the three months ended and increased $377 million, or 5%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from an increase of $33 million in device sales revenue, primarily from:
•Higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix; partially offset by
•A decrease in the total number of devices sold, primarily driven by lower prepaid devices.
The increase for the six months ended June 30, 2026, was primarily from:
•An increase of $224 million in device sales revenue, primarily from higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix; and
•An increase in liquidation revenue, primarily due to an increase in the high-end phone mix.
Other revenues were essentially flat.
Total operating expenses increased $1.4 billion, or 9%, for the three months ended and increased $3.9 billion, or 12%, for the six months ended June 30, 2026. The components of this change are discussed below.
Cost of services, exclusive of depreciation and amortization, increased $261 million, or 10%, for the three months ended and increased $998 million, or 19%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•Wholesale network access costs and amortization of customer installation fees paid to Metronet and Lumos; and
•Higher costs following the UScellular Acquisition, including merger-related costs.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher costs following the UScellular Acquisition, including merger-related costs; and
•Wholesale network access costs and amortization of customer installation fees paid to Metronet and Lumos.
Cost of equipment sales, exclusive of depreciation and amortization, increased $396 million, or 8%, for the three months ended and increased $1.1 billion, or 11%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from an increase of $358 million in device cost of equipment sales, primarily from:
•Higher average cost per device sold, primarily driven by an increase in the high-end phone mix; partially offset by
•A decrease in the total number of devices sold, primarily driven by lower prepaid devices.
The increase for the six months ended June 30, 2026, was primarily from:
•An increase of $917 million in device cost of equipment sales, primarily from higher average cost per device sold, primarily driven by an increase in the high-end phone mix; and
•An increase in liquidation costs, primarily due to an increase in the high-end phone mix.
Selling, general and administrative expenses increased $437 million, or 8%, for the three months ended and increased $915 million, or 8%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•Higher costs following the UScellular Acquisition, including merger-related costs;
•A $151 million gain recognized in the prior period related to the completed sale of a portion of our 3.45 GHz spectrum licenses;
•Higher bad debt expense; and
•Contract termination and other costs associated with our retail initiatives; partially offset by
•An increase in vendor credits related to software services.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher costs following the UScellular Acquisition, including merger-related costs;
•Higher bad debt expense;
•A $151 million gain recognized in the prior period related to the completed sale of a portion of our 3.45 GHz spectrum licenses;
•Higher advertising expense;
•$132 million of severance and related costs associated with the 2025-2026 Workforce Transformation; and
•Contract termination and other costs associated with our retail initiatives; partially offset by
•An increase in vendor credits related to software services.
Depreciation and amortization increased $288 million, or 9%, for the three months ended and increased $907 million, or 14%, for the six months ended June 30, 2026, primarily from:
•Higher depreciation and amortization expense from assets acquired in the UScellular Acquisition and the continued build-out of our nationwide 5G network; and
•Higher depreciation expense from the acceleration of certain network and technology assets in the current period, including UScellular restructuring.
Operating income, the components of which are discussed above, increased $277 million, or 5%, for the three months ended and was relatively flat for the six months ended June 30, 2026.
Interest expense, net increased $133 million, or 14%, for the three months ended and increased $248 million, or 13%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from lower interest income, primarily due to lower average balances and lower average interest rates on short-term cash equivalents.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher interest expense due to higher average debt outstanding and a higher average effective interest rate; and
•Lower interest income, primarily due to lower average balances and lower average interest rates on short-term cash equivalents.
Other expense, net increased $96 million, or 873%, for the three months ended and increased $182 million, or 319%, for the six months ended June 30, 2026, primarily from our proportionate share of losses from the Lumos and Metronet joint ventures recognized during the current period.
Income before income taxes, the components of which are discussed above, was $4.3 billion for both the three months ended June 30, 2026 and 2025, and $7.7 billion and $8.1 billion for the six months ended June 30, 2026 and 2025, respectively.
Income tax expense was essentially flat.
Our effective tax rate was 25.2% and 24.7% for the three months ended June 30, 2026 and 2025, respectively.
The six months ended June 30, 2026, was impacted by:
•Lower income before income taxes; offset by
•A decrease in excess tax benefits related to the vesting of restricted stock awards.
Our effective tax rate was 25.0% and 23.9% for the six months ended June 30, 2026 and 2025, respectively.
Net income, the components of which are discussed above, was $3.2 billion for both the three months ended June 30, 2026 and 2025, and $5.7 billion and $6.2 billion for the six months ended June 30, 2026 and 2025, respectively. Net income included:
•UScellular merger-related costs, including accelerated depreciation, net of tax, of $146 million and $622 million for the three and six months ended June 30, 2026, respectively, compared to $25 million and $35 million of UScellular merger-related costs for the three and six months ended June 30, 2025, respectively;
•A gain related to the completed sale of a portion of our 3.45 GHz spectrum licenses, net of tax, of $113 million, for the three and six months ended June 30, 2025;
•Costs associated with our Network Restructuring Initiative, including accelerated depreciation, net of tax, of $46 million and $149 million for the three and six months ended June 30, 2026, respectively; and
•Severance and related costs associated with the 2025-2026 Workforce Transformation, net of tax, of $105 million for the six months ended June 30, 2026. There were no costs associated with the 2025-2026 Workforce Transformation for the three months ended June 30, 2026.
Guarantor Financial Information
Pursuant to the applicable indentures and supplemental indentures, the Senior Notes issued by T-Mobile USA, Inc. and Sprint Capital Corporation (collectively, the "Issuers") are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile ("Parent") and certain of Parent's 100% owned subsidiaries ("Guarantor Subsidiaries").
The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Generally, the guarantees of the Guarantor Subsidiaries with respect to the Senior Notes issued by T-Mobile USA, Inc. and the credit agreement entered into by T-Mobile USA, Inc. will be automatically and unconditionally released if, immediately following such release and any concurrent releases of other guarantees, the aggregate principal amount of indebtedness of non-guarantor subsidiaries (other than certain specified subsidiaries) would not exceed $2.0 billion. The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.
On March 31, 2026, T-Mobile USA, Inc. elected to release the guarantees of certain subsidiaries under its credit agreement pursuant to the terms thereof, resulting in a corresponding release under the indentures dated April 28, 2013, April 9, 2020, and September 15, 2022, governing its outstanding Senior Notes. As a result of the release, the obligors under the credit agreement and outstanding Senior Notes issued by T-Mobile USA, Inc. now consist of T-Mobile USA, Inc., as issuer or borrower, and each of T-Mobile, Sprint LLC, Sprint Capital Corporation and Sprint Communications LLC, as guarantors. These are the same obligors as the outstanding Senior Notes issued by Sprint Capital Corporation.
Basis of Presentation
The following tables include summarized financial information of the obligor group of debt issued by T-Mobile USA, Inc. and Sprint Capital Corporation. The summarized financial information is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.
The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. and Sprint Capital Corporation is presented in the table below:
(in millions) June 30, 2026 December 31, 2025
Current assets $ 10,849 $ 12,459
Noncurrent assets 17,441 17,604
Current liabilities 14,377 16,426
Noncurrent liabilities 102,718 97,390
Due to non-guarantors 14,363 8,371
Due to related parties 629 2,174
The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. and Sprint Capital Corporation is presented in the table below:
(in millions) Six Months Ended
June 30, 2026 		Year Ended
December 31, 2025
Total revenues $ 313 $ 839
Operating loss (2,172) (4,437)
Net loss (5,030) (8,935)
Revenue from non-guarantors 312 836
Operating expenses from non-guarantors 1,155 2,296
Other expense, net, to non-guarantors (90) (164)
Performance Measures
In managing our business and assessing financial performance, we supplement the information provided by our condensed consolidated financial statements with other operating or statistical data and non-GAAP financial measures. These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements. Although companies in the telecommunications industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the industry on key operating and financial measures.
Beginning with the three months ended March 31, 2026, we shifted away from reporting customer performance measures to better align with the Company's long-held priority on growing high-value accounts, which management believes is the best reflection of value creation versus customers.
Postpaid Accounts
A postpaid account is generally defined as a billing account that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, 5G broadband gateways, fiber connections, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service.
The following table sets forth the number of ending postpaid accounts:
As of June 30, Change
(in thousands) 2026 2025 # %
Postpaid accounts (1) (2) (3)
34,700 31,502 3,198 10 %
(1)In the first quarter of 2026, we recognized a base adjustment to decrease postpaid accounts by 18,000, primarily due to combining certain business accounts that have multiple billing account numbers.
(2)In the second quarter of 2026, Metronet agreed to repurchase certain customer accounts, resulting in a base adjustment to decrease postpaid accounts by 16,000.
(3)In the second quarter of 2025, we acquired 85,000 postpaid accounts from Lumos.
These base adjustments had no impact on postpaid net account additions.
Postpaid Net Account Additions
The following table sets forth the number of postpaid net account additions:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
(in thousands) 2026 2025 # % 2026 2025 # %
Postpaid net account additions 277 318 (41) (13) % 494 523 (29) (6) %
Postpaid net account additions decreased 41,000, or 13%, for the three months ended June 30, 2026, primarily from:
•Higher account deactivations driven by the impact of a growing account base, including following the UScellular Acquisition, and higher average broadband-only accounts; partially offset by
•Higher gross account additions, including fiber account additions following the acquisition of Metronet.
Postpaid net account additions decreased 29,000, or 6%, for the six months ended June 30, 2026, primarily from:
•Higher account deactivations driven by the impact of a growing account base, including following the UScellular Acquisition, higher average broadband-only accounts and higher industry switching; partially offset by
•Higher gross account additions, including fiber account additions following the acquisitions of Metronet and Lumos.
Postpaid Account Churn
Postpaid account churn represents the number of postpaid accounts whose service was deactivated as a percentage of the average number of postpaid accounts during the specified period further divided by the number of months in the period. The number of postpaid accounts whose service was deactivated is calculated net of accounts that subsequently had their service restored within a certain period of time and excludes accounts who received service for less than a certain minimum period of time, account mergers and account migrations. We believe that postpaid account churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.
The following table sets forth the churn:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
2026 2025 2026 2025
Postpaid account churn 0.99 % 0.92 % 7 bps 1.02 % 0.93 % 9 bps
Postpaid account churn increased 7 basis points for the three months ended June 30, 2026, primarily from higher average broadband-only accounts, including following the acquisition of Metronet.
Postpaid account churn increased 9 basis points for the six months ended June 30, 2026, primarily from:
•Higher average broadband-only accounts, including following the acquisitions of Metronet and Lumos; and
•Higher industry switching.
Postpaid Average Revenue Per Account
Postpaid Average Revenue per Account ("ARPA") represents the average monthly postpaid service revenue earned per account. Postpaid ARPA is calculated as Postpaid revenues for the specified period divided by the average number of postpaid
accounts during the period, further divided by the number of months in the period. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and assists in forecasting our future postpaid service revenues on a per account basis. We consider postpaid ARPA to be indicative of our revenue growth potential, given management's priority on growing high-value accounts through deepening customer relationships.
The following table sets forth our operating measure ARPA:
(in dollars) Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
2026 2025 $ % 2026 2025 $ %
Postpaid ARPA $ 152.91 $ 149.87 $ 3.04 2 % $ 152.42 $ 148.06 $ 4.36 3 %
Postpaid ARPA increased $3.04, or 2%, for the three months ended and increased $4.36, or 3%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•Higher fee revenue, including from the adoption of new tax and fee exclusive plans; and
•An increase in customers per account, including from the continued adoption of 5G broadband and continued growth of T-Mobile for Business accounts, partially offset by fiber and UScellular accounts with fewer customers per account; partially offset by
•Increased promotional activity, including the success of bundled offerings.
The increase for the six months ended June 30, 2026, was primarily from:
•The positive impact from rate plan optimizations and higher fee revenue, including from the adoption of new tax and fee exclusive plans; and
•An increase in customers per account, including from the continued adoption of 5G broadband and continued growth of T-Mobile for Business accounts, partially offset by fiber and UScellular accounts with fewer customers per account; partially offset by
•Increased promotional activity, including the success of bundled offerings.
Adjusted EBITDA and Core Adjusted EBITDA
Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain expenses, gains and losses, which are not reflective of our ongoing operating performance ("Special Items"). Special Items include UScellular merger-related costs, costs associated with the Network Restructuring Initiative, certain legal-related expenses and recoveries, restructuring costs not directly attributable to the UScellular Acquisition (including severance), and other non-core gains and losses. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Adjusted EBITDA margin represents Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin represents Core Adjusted EBITDA divided by Service revenues.
Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole. We historically used Adjusted EBITDA, and we currently use Core Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors. Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications and broadband services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, depreciation and amortization from capital investments, stock-based compensation and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company's device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP.
The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
(in millions, except percentages) 2026 2025 $ % 2026 2025 $ %
Net income $ 3,239 $ 3,222 $ 17 1 % $ 5,743 $ 6,175 $ (432) (7) %
Adjustments:
Interest expense, net 1,055 922 133 14 % 2,086 1,838 248 13 %
Other expense, net 107 11 96 873 % 239 57 182 319 %
Income tax expense 1,089 1,058 31 3 % 1,919 1,943 (24) (1) %
Operating income 5,490 5,213 277 5 % 9,987 10,013 (26) - %
Depreciation and amortization 3,434 3,146 288 9 % 7,251 6,344 907 14 %
Stock-based compensation (1)
212 178 34 19 % 415 346 69 20 %
UScellular merger-related costs 182 33 149 452 % 588 47 541 NM
Network Restructuring Initiative costs 52 - 52 NM 128 - 128 NM
Legal-related expenses (recoveries), net (2)
16 (4) 20 (500) % 70 2 68 NM
Other, net (3)
151 (19) 170 (895) % 339 54 285 528 %
Adjusted EBITDA 9,537 8,547 990 12 % 18,778 16,806 1,972 12 %
Lease revenues - (6) 6 (100) % (1) (7) 6 (86) %
Core Adjusted EBITDA
$ 9,537 $ 8,541 $ 996 12 % $ 18,777 $ 16,799 $ 1,978 12 %
Net income margin (Net income divided by Service revenues) 17 % 18 % -100 bps 15 % 18 % -300 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues) 50 % 49 % 100 bps 50 % 49 % 100 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
50 % 49 % 100 bps 50 % 49 % 100 bps
(1)Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense on the condensed consolidated financial statements.
(2)Legal-related expenses (recoveries), net, consists of the settlement of certain litigation and compliance costs associated with the August 2021 cyberattack, net of insurance recoveries.
(3)Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, not directly attributable to the UScellular Acquisition, which are not reflective of T-Mobile's ongoing core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA. Other, net, for the six months ended June 30, 2026, includes $141 million of severance and related costs associated with the 2025-2026 Workforce Transformation and $108 million of costs associated with our retail initiatives for both the three and six months ended June 30, 2026.
NM - Not meaningful
Core Adjusted EBITDA increased $996 million, or 12%, for the three months ended and increased $2.0 billion, or 12%, for the six months ended June 30, 2026. The components of Core Adjusted EBITDA are discussed further above.
The increase for the three months ended June 30, 2026, was primarily from:
•Higher Total service revenues; partially offset by
•Higher Cost of equipment sales, excluding Special Items;
•Higher Cost of services, excluding Special Items; and
•Higher Selling, general and administrative expenses, excluding Special Items.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher Total service revenues; and
•Higher Equipment revenues, excluding Lease revenues; partially offset by
•Higher Cost of equipment sales, excluding Special Items;
•Higher Cost of services, excluding Special Items; and
•Higher Selling, general and administrative expenses, excluding Special Items.
Adjusted EBITDA increased $990 million, or 12%, for the three months ended June 30, 2026, and increased $2.0 billion, or 12%, for the six months ended June 30, 2026, due to the fluctuations in Core Adjusted EBITDA discussed above.
Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt, financing leases, the sale of certain receivables, the Revolving Credit Facility (as defined below) and an unsecured short-term commercial paper program. Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt in the future to finance our business strategy under the terms governing our existing and future indebtedness.
Cash Flows
The following is a condensed schedule of our cash flows:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
(in millions) 2026 2025 $ % 2026 2025 $ %
Net cash provided by operating activities $ 7,500 $ 6,992 $ 508 7 % $ 14,722 $ 13,839 $ 883 6 %
Net cash used in investing activities (3,052) (1,559) (1,493) 96 % (5,901) (4,968) (933) 19 %
Net cash used in financing activities (5,182) (7,205) 2,023 (28) % (11,622) (4,012) (7,610) 190 %
Operating Activities
Net cash provided by operating activities increased $508 million, or 7%, for the three months ended and increased $883 million, or 6%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•A $736 million increase in Net income, adjusted for non-cash income and expenses; partially offset by
•A $228 million increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Accounts receivable and Inventory, partially offset by lower use of cash from Other current and long-term assets.
•Net cash provided by operating activities includes the impact of $181 million and $92 million in net payments for Merger-related costs for the three months ended June 30, 2026 and 2025, respectively.
The increase for the six months ended June 30, 2026, was primarily from:
•A $972 million increase in Net income, adjusted for non-cash income and expenses; partially offset by
•An $89 million increase in net cash outflows from changes in working capital, primarily due to higher use of cash from Accounts payable and accrued liabilities, Short- and long-term operating lease liabilities and Accounts receivable, partially offset by lower use of cash from Operating lease right-of-use assets, Other current and long-term assets and Inventory.
•Net cash provided by operating activities includes the impact of $334 million and $162 million in net payments for Merger-related costs for the six months ended June 30, 2026 and 2025, respectively.
Investing Activities
Net cash used in investing activities increased $1.5 billion, or 96%, for the three months ended and increased $933 million, or 19%, for the six months ended June 30, 2026.
The net use of cash for the three months ended June 30, 2026, was primarily from:
•$2.7 billion in Purchases of property and equipment, including capitalized interest, for the continued build-out of our nationwide 5G network, including for incremental capital expenditures following the UScellular Acquisition; and
•$484 million in Purchases of spectrum and intangible assets.
The net use of cash for the six months ended June 30, 2026, was primarily from:
•$5.3 billion in Purchases of property and equipment, including capitalized interest, for the continued build-out of our nationwide 5G network, including for incremental capital expenditures following the UScellular Acquisition; and
•$510 million in Purchases of spectrum and intangible assets.
Financing Activities
Net cash used in financing activities decreased $2.0 billion, or 28%, for the three months ended and increased $7.6 billion, or 190%, for the six months ended June 30, 2026.
The net use of cash for the three months ended June 30, 2026, was primarily from:
•$2.3 billion in Repurchases of common stock;
•$1.3 billion in Repayments of long-term debt;
•$1.1 billion in Dividends on common stock; and
•$360 million in Repayments of financing lease obligations.
The net use of cash for the six months ended June 30, 2026, was primarily from:
•$7.8 billion in Repayments of long-term debt;
•$7.1 billion in Repurchases of common stock;
•$2.2 billion in Dividends on common stock;
•$664 million in Repayments of financing lease obligations; and
•$185 million in Tax withholdings on share-based awards; partially offset by
•$6.4 billion in Proceeds from issuance of long-term debt, net.
Cash and Cash Equivalents
As of June 30, 2026, our Cash and cash equivalents were $2.8 billion compared to $5.6 billion at December 31, 2025.
Adjusted Free Cash Flow
Adjusted Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment. Adjusted Free Cash Flow is a non-GAAP financial measure utilized by management, investors and analysts of our financial information to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business. Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow margin is utilized by management, investors and analysts to evaluate the Company's ability to convert service revenue efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
Three Months Ended
June 30, 		Change Six Months Ended
June 30, 		Change
(in millions, except percentages) 2026 2025 $ % 2026 2025 $ %
Net cash provided by operating activities $ 7,500 $ 6,992 $ 508 7 % $ 14,722 $ 13,839 $ 883 6 %
Cash purchases of property and equipment, including capitalized interest (2,703) (2,396) (307) 13 % (5,326) (4,847) (479) 10 %
Adjusted Free Cash Flow $ 4,797 $ 4,596 $ 201 4 % $ 9,396 $ 8,992 $ 404 4 %
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues) 40 % 40 % - bps 39 % 40 % -100 bps
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues) 25 % 26 % -100 bps 25 % 26 % -100 bps
Adjusted Free Cash Flow increased $201 million, or 4%, for the three months ended and increased $404 million, or 4%, for the six months ended June 30, 2026.
The increase for the three months ended June 30, 2026, was primarily from:
•Higher Net cash provided by operating activities, as described above; partially offset by
•Higher Cash purchases of property and equipment, including capitalized interest, primarily from the planned timing of capital purchases, including for incremental capital expenditures following the UScellular Acquisition.
•Adjusted Free Cash Flow includes the impact of $181 million and $92 million in net payments for Merger-related costs for the three months ended June 30, 2026 and 2025, respectively.
The increase for the six months ended June 30, 2026, was primarily from:
•Higher Net cash provided by operating activities, as described above; partially offset by
•Higher Cash purchases of property and equipment, including capitalized interest, primarily from the planned timing of capital purchases, including for incremental capital expenditures following the UScellular Acquisition.
•Adjusted Free Cash Flow includes the impact of $334 million and $162 million in net payments for Merger-related costs for the six months ended June 30, 2026 and 2025, respectively.
Borrowing Capacity
We maintain a revolving credit facility (the "Revolving Credit Facility") with an aggregate commitment amount of $10.0 billion. As of June 30, 2026, there was no outstanding balance under the Revolving Credit Facility. See Note 8 - Debt of the Notes to the Condensed Consolidated Financial Statements for more information regarding the Revolving Credit Facility.
We maintain an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program supplements our other available external financing arrangements and proceeds are expected to be used for general corporate purposes. As of June 30, 2026, there was no outstanding balance under this program.
Debt Financing
As of June 30, 2026, our total debt and financing lease liabilities were $86.9 billion, excluding our tower obligations, of which $78.5 billion was classified as long-term debt and $1.1 billion was classified as long-term financing lease liabilities.
During the six months ended June 30, 2026, we issued long-term debt for net proceeds of $6.4 billion and redeemed and repaid short- and long-term debt with an aggregate principal amount of $7.8 billion.
For more information regarding our debt financing transactions, see Note 8 - Debt of the Notes to the Condensed Consolidated Financial Statements.
Spectrum Auction
In June 2026, the FCC announced that we were the winning bidder of 102 licenses in Auction 113 (AWS-3 band spectrum) for an aggregate purchase price of $278 million. At the inception of Auction 113 in April 2026, we deposited $25 million.
On July 10, 2026, we paid the FCC an additional $31 million and expect to pay the remaining $222 million on July 24, 2026, for the licenses won in the auction.
For more information regarding the spectrum auction, see Note 6 - Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.
License Purchase Agreements
On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the "Sellers") in exchange for total cash consideration of $3.5 billion. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements, pursuant to which we and the Sellers agreed to bifurcate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, whereby we deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent approximately $1.1 billion of the aggregate $3.5 billion cash consideration.
The FCC approved the purchase of the first tranche on December 29, 2023. The first tranche closed on June 24, 2024, and the associated payment of $2.4 billion was made on August 5, 2024.
The FCC approved the purchase of the Dallas licenses included in the second tranche on October 22, 2024. The purchase of the Dallas licenses closed on December 6, 2024, and the associated payment of $541 million was made on the same day.
The FCC approved the purchase of the remaining Chicago and New Orleans deferred licenses from the second tranche on April 15, 2025. The purchase of the remaining licenses closed on June 2, 2025, and the associated payment of $604 million was made on the same day.
On September 12, 2023, we entered into a license purchase agreement with Comcast (the "Comcast License Purchase Agreement"), pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the Comcast License Purchase Agreement. On January 13, 2025, we and Comcast entered into an amendment to the Comcast License Purchase Agreement, pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. On June 2, 2026, we closed on the acquisition of $46 million of the spectrum licenses, with the associated payment made on the same day. We are targeting a closing in the first half of 2028 for the acquisition of the remaining spectrum licenses.
On September 10, 2024, we entered into a License Purchase Agreement with N77 License Co LLC ("Buyer"), pursuant to which Buyer has the option to purchase all or a portion of our remaining 3.45 GHz spectrum licenses in exchange for a range of cash consideration, with the specific licenses sold to be determined based upon the amount of committed financing raised by Buyer. Following receipt of the required regulatory approvals, on April 30, 2025, we completed the sale of a portion of our 3.45 GHz spectrum licenses for $2.0 billion.
On May 30, 2025, we entered into a License and Unit Purchase Agreement with NEWLEVEL IV, L.P. and NEWLEVEL, LLC, both of which are affiliates of Grain Management, LLC ("Grain"), pursuant to which we will sell our 800 MHz spectrum licenses in exchange for cash consideration of $2.9 billion and the receipt of Grain's 600 MHz spectrum licenses, which we are currently utilizing under lease agreements with Grain. In addition, we may receive a share of certain future proceeds from transactions entered into by Grain that monetize the 800 MHz spectrum licenses, subject to certain terms and conditions and following a certain return on invested capital for Grain. In addition, we expect an increase to our cash income tax liability of approximately $850 million related to the close of this transaction. The transaction is subject to customary closing conditions,
and subsequent to June 30, 2026, on July 1, 2026, the FCC approved the transaction, including certain modifications to the 800 MHz spectrum licenses. The parties are currently targeting a closing in the third quarter of 2026.
For more information regarding our license purchase agreements, see Note 6 - Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Ka'ena Corporation
On May 1, 2024, we completed the Ka'ena Acquisition. The total purchase price consists of an upfront payment on the Ka'ena Acquisition Date and an earnout payable in the second half of 2026.
Based on the adjusted amount paid upfront, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.
For more information regarding the Ka'ena Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Vistar Media Inc.
On February 3, 2025, we completed the Vistar Acquisition in exchange for $621 million in cash.
For more information regarding the Vistar Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Acquisition of Blis Holdco Limited
On March 3, 2025, we completed the Blis Acquisition in exchange for $180 million in cash.
For more information regarding the Blis Acquisition, see Note 2 - Business Combinations of the Notes to the Condensed Consolidated Financial Statements.
Joint Ventures
On April 1, 2025, we completed the joint acquisition of Lumos. During the three months ended June 30, 2025, we invested $932 million to acquire a 50% equity interest in the joint venture and 97,000 fiber customers. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million between 2027 and 2028 under the existing business plan.
On April 24, 2026, we entered into a definitive agreement with Wren House to establish a joint venture that will acquire i3 Broadband, one of Wren House's existing fiber portfolio companies. The transaction with Wren House is expected to close in the second half of 2026, subject to customary closing conditions and regulatory approvals, at which time we expect to invest approximately $700 million to acquire a 50% equity interest in the joint venture and substantially all existing residential fiber customers.
On April 25, 2026, we entered into definitive agreements with Oak Hill to establish a joint venture that will acquire and combine GoNetspeed and Greenlight Networks, two of Oak Hill's existing fiber portfolio companies. The transaction with Oak Hill is expected to close in the first half of 2027, subject to customary closing conditions and regulatory approvals, at which time we expect to invest approximately $2.0 billion to acquire a 50% equity interest in the joint venture and substantially all existing residential fiber customers.
Off-Balance Sheet Arrangements
We have arrangements, as amended from time to time, to sell certain EIP receivables and service accounts receivable on a revolving basis as a source of liquidity. As of June 30, 2026, we derecognized net receivables of $1.7 billion upon sale through these arrangements.
For more information regarding these off-balance sheet arrangements, see Note 5 - Sales of Certain Receivables of the Notes to the Condensed Consolidated Financial Statements.
Future Sources and Uses of Liquidity
We may seek additional sources of liquidity, including through the issuance of additional debt, to continue to opportunistically acquire spectrum licenses or other long-lived assets in private party transactions, make strategic investments, repurchase shares, pay dividends or for the refinancing or repurchasing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for acquisitions of businesses, spectrum and other long-lived assets, or for any potential stockholder returns or debt repurchases, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months, as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes, including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption or repurchase of debt, tower obligations, share repurchases and dividend payments.
We determine future liquidity requirements for operations, capital expenditures, share repurchases, dividend payments and debt repurchases based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum, repurchase shares or repurchase debt. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the current regulatory framework, including our national security obligations, and we have incurred all of the remaining restructuring and integration costs associated with the Sprint Merger, with the cash expenditures for the Sprint Merger-related costs extending beyond 2026. Additionally, we are expecting to incur substantial expenses in connection with the UScellular Acquisition, including coordinating and integrating businesses, operations, policies and procedures. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately. These expenses could exceed the costs historically borne by us and adversely affect our financial condition and results of operations. There are a number of additional risks and uncertainties that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.
The indentures, supplemental indentures and credit agreements governing our long-term debt to third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. We were in compliance with all restrictive debt covenants as of June 30, 2026.
Financing Lease Facilities
We have uncommitted financing lease facilities with certain third parties that provide us with the ability to enter into financing leases for network equipment and services. We expect to enter into up to a total of $1.2 billion in financing lease commitments during the year ending December 31, 2026. As of June 30, 2026, we have entered into $11.8 billion of financing leases under these financing lease facilities, of which $481 million and $694 million was executed during the three and six months ended June 30, 2026, respectively.
Capital Expenditures
Our capital liquidity requirements have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure, the integration of the networks, spectrum, technology, personnel and customer base of T-Mobile and UScellular and investments in information technology platforms. We expect to maintain our investment in capital expenditures related to these efforts in 2026 compared to 2025, as we continue our integration efforts, maintain our commitment to build out our nationwide 5G network and continue our digital journey. Future capital expenditure requirements will be primarily driven by the deployment of acquired spectrum licenses.
For more information regarding our spectrum licenses, see Note 6 - Spectrum License Transactions of the Notes to the Condensed Consolidated Financial Statements.
Stockholder Returns
On December 11, 2025, we announced that our Board of Directors authorized our 2026 Stockholder Return Program of up to $14.6 billion that will run through December 31, 2026 (the "2026 Stockholder Return Program"). On April 23, 2026, we announced that our Board of Directors increased the 2026 Stockholder Return Program authorization to up to $18.2 billion. The 2026 Stockholder Return Program consists of repurchases of shares of our common stock and the payment of cash dividends. The declaration and payment of all dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations. The amount available under the 2026 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us.
The 2026 Stockholder Return Program aligns with our commitment to a balanced capital allocation strategy that supports core and strategic investments in the business while delivering returns to stockholders. From January 1, 2026, through the end of 2027, the Company expects its business plan to support:
•Up to approximately $30.0 billion for share repurchases and cash dividends, which includes the 2026 Stockholder Return Program; and
•Over $22.0 billion in a discretionary and flexible envelope for opportunistic deployment, which may include de-levering, investments in our core business, strategic investments, and/or additional capital returns to stockholders beyond the $30.0 billion allocation.
•These figures represent initial allocations subject to change based on changes in opportunities and our views on deleveraging, investments in our core business and strategic investment opportunities.
On December 4, 2025, our Board of Directors declared a cash dividend of $1.02 per share on our issued and outstanding common stock, which was paid on March 12, 2026, to stockholders of record as of the close of business on February 27, 2026.
On March 19, 2026, our Board of Directors declared a cash dividend of $1.02 per share on our issued and outstanding common stock, which was paid on June 11, 2026, to stockholders of record as of the close of business on May 29, 2026.
On June 15, 2026, our Board of Directors declared a cash dividend of $1.02 per share on our issued and outstanding common stock, which will be paid on September 10, 2026, to stockholders of record as of the close of business on August 28, 2026.
During the three and six months ended June 30, 2026, we paid an aggregate of $1.1 billion and $2.2 billion, respectively, in cash dividends to our stockholders, which are presented within Net cash used in financing activities on our Condensed Consolidated Statements of Cash Flows. As of June 30, 2026, $1.1 billion for dividends payable is presented within Other current liabilities on our Condensed Consolidated Balance Sheets.
During the three months ended June 30, 2026, we repurchased 11,420,845 shares of our common stock at an average price per share of $188.76 for a total purchase price of $2.2 billion, and during the six months ended June 30, 2026, we repurchased 34,750,770 shares of our common stock at an average price per share of $203.07 for a total purchase price of $7.1 billion, under the 2026 Stockholder Return Program. As of June 30, 2026, we had up to $8.9 billion remaining under the 2026 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2026.
Subsequent to June 30, 2026, from July 1, 2026, through July 17, 2026, we repurchased 2,149,600 shares of our common stock at an average price per share of $182.53 for a total purchase price of $392 million under the 2026 Stockholder Return Program. As of July 17, 2026, we had up to $8.5 billion remaining under the 2026 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2026.
For additional information regarding the 2026 Stockholder Return Program, see Note 12 - Stockholder Return Program of the Notes to the Condensed Consolidated Financial Statements.
Related Person Transactions
We have related person transactions associated with DT or its respective affiliates in the ordinary course of business, including intercompany servicing and licensing.
As of July 17, 2026, DT held, directly or indirectly, approximately 54.3% of the outstanding T-Mobile common stock. As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank Group Corp., DT has voting control, as of July 17, 2026, over approximately 55.2% of the outstanding T-Mobile common stock.
Disclosure of Iranian Activities under Section 13(r) of the Exchange Act
Section 219 of the Iran Threat Reduction and the Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.
As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the three months ended June 30, 2026, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates or former affiliates that we do not control and that are our affiliates or former affiliates solely due to their common control with DT. We have relied upon DT for information regarding their respective activities, transactions and dealings.
DT, through certain of its non-U.S. subsidiaries, is party to roaming and interconnect agreements with the following mobile and fixed line telecommunication providers in Iran, some of which are or may be government-controlled entities: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran and Telecommunication Infrastructure Company of Iran. In addition, during the three months ended June 30, 2026, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to four customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury's Office of Foreign Assets Control: CPG Engineering & Commercial Services GmbH, Golgohar Trade and Technology GmbH, International Trade and Industrial Technology ITRITEC GmbH and Kara Industrial Trading GmbH. These services are in the process of being terminated, in particular by undertaking appropriate legal steps before German courts. For the three months ended June 30, 2026, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.1 million, and the estimated net profits were less than $0.1 million.
In addition, DT, through certain of its non-U.S. subsidiaries that operate a fixed-line network in their respective European home countries (in particular, Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries. Gross revenues and net profits recorded from these activities for the three months ended June 30, 2026, were less than $0.1 million. We understand that DT intends to continue these activities.
Critical Accounting Estimates
Preparation of our condensed consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of certain assets, liabilities, revenues and expenses, as well as related disclosure of contingent assets and liabilities. There have been no material changes to the critical accounting policies and estimates as previously disclosed in Part II, Item 7 and Part II, Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025, and which are hereby incorporated by reference herein.
Accounting Pronouncements Not Yet Adopted
For information regarding recently issued accounting standards, see Note 1 - Summary of Significant Accounting Policies of the Notes to the Condensed Consolidated Financial Statements.
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