T-Mobile US $TMUS (+3,54 %) ($DTE (+4,92 %)) issued a cautious forecast along with a mixed fourth quarter report that included a decline in profits and lower than expected net postpaid subscriber growth.
The company's shares have already fallen by up to 6.5% in pre-market trading on Wednesday.
For 2026, the telecom company forecasts adjusted free cash flow of between $18 billion and $18.7 billion, below Bloomberg's estimate of $18.92 billion.
Adjusted EBITDA is expected to be between USD 37 billion and USD 37.5 billion (mean USD 37.25 billion, estimate USD 37.3 billion).
The company expects expenses of USD 10 billion for the year, which is slightly below the estimate of USD 10.12 billion.
Net additions to postpaid contracts are expected to be between 900,000 and 1 million.
In the fourth quarter, net additions to postpaid customers were 2.38 million, above the estimate of 1.92 million, while net additions to postpaid telephone customers were 962,000, below the estimate of 991,709.
The net increase in postpaid accounts amounted to 261,000, which corresponds to a decrease of 2,000 compared to the previous year.
Net additions to T-Mobile's 5G broadband customers increased by 67,000 to 495,000 and the company ended the quarter with 8.5 million 5G broadband customers.
Net broadband customer additions increased 126,000 year-over-year to 558,000, including 63,000 net fiber additions.
The churn rate for postpaid telephones was 1.02%, 10 basis points above the previous year's figure.
ARPU for postpaid phones amounted to USD 50.71 compared to an estimate of USD 50.77.
Net new customer acquisition in the prepaid segment fell by 44.7% year-on-year to 57,000.
The churn rate for prepaid contracts was 2.76%, 9 basis points lower.
The ARPU for prepaid contracts was USD 33.33 compared to the estimated USD 33.77.
At the end of the fourth quarter, the company had a total of 142.39 million customers (estimated 141.67 million), compared to 129.53 million customers in the same period last year.
In the three months to December 31, net income fell from USD 2.98 billion in the previous year to USD 2.10 billion, which is attributable to severance costs of USD 293 million.
The company generated earnings per share of USD 1.88, missing the average analyst estimate by 18 cents.
Sales rose by 11% to USD 24.33 billion, exceeding the consensus estimate of USD 24.2 billion.
Separately, the company announced that it has integrated real-time artificial intelligence into its network and will be the first AI offering to provide a live translation service for calls in more than 50 languages.
T-Mobile announced that it has opened registration for its postpaid customers to beta test the feature, which is scheduled to begin in the spring.
Once the feature is ready, T-Mobile said customers will not need to install apps or update their phones to use the live translation feature.
