T-Mobile reports record-breaking Q2 earnings and the stock soars

For those thinking that the T-Mobile train is slowing, better guess again. The carrier just reported that it had 830,000 postpaid phone net customer additions during the second quarter. This financial category is considered the gold standard (dare I use the word) metric that Wall Street looks at to determine the underlying strength of wireless firms. It was a record-setting performance for T-Mobile as it added more postpaid phone net customers during any second quarter in T-Mobile‘s history, and it led the industry as well.

Postpaid net customer additions of 1.7 million were also a second quarter record for T-Mobile, and that performance also led the industry. T-Mobile reported 318,000 postpaid net account additions, up 6% year-over-year and…the best in the industry. The report also mentioned that T-Mobile had 5G broadband net customer additions of 454,000. That was a 12% gain year-over-year and was, repeat after me, the best in the industry. Postpaid churn for the quarter was .90%, a slight improvement from the .91% reported for Q1.

T-Mobile reported service revenue of $17.4 billion during the three months, which was up an industry best 6% on an annual basis. What drove the stock much higher after hours was the record net profits of $3.2 billion announced by the company, up a stunning 10% year-over-year. Diluted earnings per share, which assume the conversion of all convertible debt to equity, came in at $2.84. That is up 14% year-over-year and is a record for any second quarter in T-Mobile‘s history.

The carrier’s CEO, Mike Sievert, said, “T-Mobile crushed our own growth records with the best-ever total postpaid and postpaid phone nets in a Q2 in our history. T-Mobile is now America’s Best Network. When you combine that with the incredible value that we have always been famous for, it should surprise no one that customers are switching to the Un-carrier at a record pace. These durable advantages enabled us to once again translate customer growth into financial growth, with the industry’s best service revenue growth by a wide mile and record Q2 Adjusted Free Cash Flow.”

T-Mobile also reported that it had 39,000 prepaid net customer additions during Q2. Those customers are a highly fickle group ready to follow the lowest pricing. That’s why prepaid churn is typically higher than postpaid churn. For Q2, T-Mobile‘s prepaid churn was 2.65%.

The company said that for 2025, it expects postpaid net customer additions to be between 6.1 million and 6.4 million. That’s an increase from previous guidance calling for 2025 to show an increase between 5.5 million to 6.0 million. This estimate includes a forecast of 2.95 million to 3.10 million postpaid phone net customer additions during 2025. These figures are another reason why the stock took off after the report was released.

Speaking of the stock, after closing the regular trading session at $233.93, up 68 cents for the day, in after-hours trading, the shares soared $13.71 or 5.9% higher at $247.64.