T-Mobile’s 10% EBITDA Explosion Could Make Savvy Investors Filthy Rich

Photo of Trey Thoelcke
By Trey Thoelcke Published

Quick Read

  • T-Mobile (TMUS) missed Q4 EPS estimates due to $390M in severance costs. Service revenue grew 10% YoY to $18.7B.

  • T-Mobile added 2.4M postpaid customers in Q4 and won highest network quality ratings in five of six U.S. regions.

  • T-Mobile guides 2026 core adjusted EBITDA to $37B to $37.5B and adjusted free cash flow to $18B to $18.7B.

  • It sounds nuts, but SoFi is giving new active invest users up to $1,000 in stock for a limited time, and all it takes is a $50 deposit to get started. See for yourself (Sponsor)
    DISCLOSURE:
    INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA(www.finra.org)/SIPC(www.sipc.org). Advisory services are offered by SoFi Wealth LLC, an SEC-registered investment adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Probability of Member receiving $1,000 is a probability of 0.026%; If you don’t make a selection in 30 days, you’ll no longer qualify for the promo. Customer must fund their account with a minimum of $50.00 to qualify. Other fees, such as exchange fees, may apply. Please view our fee disclosure to view a full listing of fees. Investing in alternative investments and/or strategies may not be suitable for all investors and involves unique risks, including the risk of loss. An investor should consider their individual circumstances and any investment information, such as a prospectus, prior to investing. Interval Funds are illiquid instruments, the ability to trade on your timeline may be restricted. Brokerage and Active investing products offered through SoFi Securities LLC, Member FINRA(www.finra.org) /SIPC(www.sipc.org). There are limitations with fractional shares to consider before investing. During market hours fractional share orders are transmitted immediately in the order received. There may be system delays from receipt of your order until execution and market conditions may adversely impact execution prices. Outside of market hours orders are received on a not held basis and will be aggregated for each security then executed in the morning trade window of the next business day at market open. Share will be delivered at an average price received for executing the securities through a single batched order. Fractional shares may not be transferred to another firm. Fractional shares will be sold when a transfer or closure request is initiated. Please consider that selling securities is a taxable event. Options involve risks, including substantial risk of loss and the possibility an investor may lose the entire investment Before trading options please review the Characteristics and Risks of Standardized Options  Investing in an Initial Public Offering (IPO) involves substantial risk, including the risk of loss. Further, there are a variety of risk factors to consider when investing in an IPO, including but not limited to, unproven management, significant debt, and lack of operating history. For a comprehensive discussion of these risks please refer to SoFi Securities’ IPO Risk Disclosure Statement This should not be considered a recommendation to participate in IPOs and investors should carefully read the offering prospectus to determine whether an offering is consistent with their investment objectives, risk tolerance, and financial situation. New offerings generally have high demand and there are a limited number of shares available for distribution to participants. Many customers may not be allocated shares and share allocations may be significantly smaller than the shares requested in the customer’s initial offer (Indication of Interest). For more information on the allocation process please visit IPO Allocation.
This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.
T-Mobile’s 10% EBITDA Explosion Could Make Savvy Investors Filthy Rich

© ipopba / iStock via Getty Images

At a Glance

    • EPS: $1.88 vs. $2.10 estimate (includes $0.26 severance impact)
    • Revenue: $24.33 billion vs. $24.66 billion implied estimate
    • Net Income: $2.1 billion, down from $2.98 billion in Q4 2024
    • Core Adjusted EBITDA: $8.4 billion (up 7% YoY)
    • Stock Performance: TMUS traded at $199.43 as of February 10, 2026, down 20.84% over one year

Financial Performance Highlights

T-Mobile’s Q4 results reflected strong operational momentum offset by workforce restructuring costs. Service revenue climbed 10% YoY to $18.7 billion, driven by postpaid service revenue growth of 13.9%. Operating cash flow surged 20% to $6.65 billion, while adjusted free cash flow reached $4.2 billion.

The earnings miss stemmed from $390 million in severance costs ($293 million after-tax) tied to workforce transformation initiatives. Without this charge, operational performance remained robust, with full-year 2025 core adjusted EBITDA hitting $33.9 billion.

Customer Growth & Operational Momentum

T-Mobile added 2.4 million total postpaid net customers in Q4, including 962,000 postpaid phone net additions. Broadband expansion continued with 558,000 net additions, bringing total broadband customers to 9.4 million, including 8.5 million 5G broadband subscribers.

J.D. Power awarded T-Mobile highest network quality ratings in five of six U.S. regions for the first time. However, postpaid phone churn ticked up to 1.02%, rising 10 basis points YoY.

2026 Guidance & Outlook

Management projected aggressive growth for 2026, targeting core adjusted EBITDA of $37.0 billion to $37.5 billion (representing 10% growth at midpoint) and adjusted free cash flow of $18.0 billion to $18.7 billion. Capital expenditures are expected at approximately $10.0 billion.

CEO Srini Gopalan expressed confidence, stating: “As we look to 2026, we’re even more confident that the future is brighter than ever before.”

Capital Returns

T-Mobile returned $3.6 billion to stockholders in Q4 through $2.5 billion in share repurchases and $1.1 billion in dividends. Since Q3 2022, cumulative returns total $45.4 billion. The board authorized a new $14.6 billion program through December 2026, with the next dividend of $1.02 per share payable March 12, 2026.

 

Photo of Trey Thoelcke
About the Author Trey Thoelcke →

Trey has been an editor and author at 24/7 Wall St. for more than a decade, where he has published thousands of articles analyzing corporate earnings, dividend stocks, short interest, insider buying, private equity, and market trends. His comprehensive coverage spans the full spectrum of financial markets, from blue-chip stalwarts to emerging growth companies.

Beyond 24/7 Wall St., Trey has created and edited financial content for Benzinga and AOL's BloggingStocks, contributing additional hundreds of articles to the investment community. He previously oversaw the 24/7 Climate Insights site, managing editorial operations and content strategy, and currently oversees and creates content for My Investing News.

Trey's editorial expertise extends across multiple publishing environments. He served as production editor at Dearborn Financial Publishing and development editor at Kaplan, where he helped shape financial education materials. Earlier in his career, he worked as a writer-producer at SVE. His freelance editing portfolio includes work for prestigious clients such as Sage Publications, Rand McNally, the Institute for Supply Management, the American Library Association, Eggplant Literary Productions, and Spiegel.

Outside of financial journalism, Trey writes fiction and has been an active member of the writing community for years, overseeing a long-running critique group and moderating workshop sessions at regional conventions. He lives with his family in an old house in the Midwest.

Continue Reading

Top Gaining Stocks

F Vol: 216,261,152
ENPH Vol: 11,512,758
ON Vol: 21,618,191
AKAM Vol: 10,964,520
HPE Vol: 27,523,481

Top Losing Stocks

CTRA Vol: 73,319,495
FDS Vol: 1,153,303
CEG Vol: 6,653,829
J Vol: 2,649,092
PODD Vol: 1,990,609