T-Mobile US, Inc. (NASDAQ: TMUS), one of the largest wireless carriers in the United States, saw its shares climb 0.85% to $148.08 at the market close before advancing another 0.88% to $149.39 in after-hours trading. The gains followed the release of the company's third-quarter 2026 results, which showed stronger earnings, higher service revenue, and continued customer growth. T-Mobile also raised its profitability and free cash flow guidance for the year, reflecting stronger operating performance. For a carrier whose business rests on recurring subscription revenue, the report offered a detailed read on how subscriber growth, per-customer pricing, and network investment are coming together.

Quarterly Earnings Deliver Strong Growth

T-Mobile reported third-quarter net income of $3.46 billion, up 27.3% from $2.71 billion a year earlier. Diluted earnings per share increased 33.6% to $3.22, compared with $2.41 in the same quarter. The results highlighted stronger profitability as the company expanded its wireless customer base and increased service revenue.

Total revenue reached $23.58 billion, representing a 7.4% year-over-year increase from $21.96 billion. Total service revenue climbed 6.2% to $19.38 billion, while postpaid service revenue advanced 9.3% to $16.27 billion. Service revenue, which makes up the bulk of the company's total revenue, is the figure analysts typically watch most closely because it captures the recurring, subscription-based core of a wireless business. The growth reflected stronger customer relationships and continued demand for the company's wireless services.

Core adjusted EBITDA increased 10.8% to $9.62 billion, compared with $8.68 billion in the third quarter of 2025. Operating cash flow, however, declined 1.6% to $7.34 billion from $7.46 billion a year earlier. Adjusted free cash flow nevertheless rose 5.3% to $5.07 billion, supported in part by lower capital spending.

Customer Growth and Network Performance Strengthen the Business

T-Mobile added 274,000 postpaid accounts during the third quarter, bringing its total postpaid account base to approximately 35 million. Although additions declined from 396,000 a year earlier, the company maintained positive growth across its core customer base, with total postpaid accounts up 2.9% year over year. Postpaid account additions are among the most closely followed metrics in the US telecom industry because they track expansion of the recurring revenue base.

Postpaid average revenue per account reached $155.73, up 4.2% from $149.44 in the prior-year quarter. The increase supported service revenue growth as the company generated more revenue from its postpaid customer relationships. Postpaid account churn, a measure of customer departures, rose to 1.09%, compared with 0.97% a year earlier. The two readings moved in opposite directions this quarter, with more revenue earned per account alongside a modest uptick in customer departures — a combination investors track to gauge both pricing power and retention.

The company also continued to strengthen its competitive position through network performance and customer experience. PCMag recognized T-Mobile across several categories, including mobile network speed, coverage, pricing, and customer satisfaction. Opensignal recognized the carrier's 5G coverage, while Ookla ranked its fixed wireless access service highly for both download and upload speeds.

Guidance Raised After Strong Third Quarter

Following its quarterly performance, T-Mobile raised the midpoint of its full-year profitability and cash flow outlook. The company now expects core adjusted EBITDA of between $37.35 billion and $37.45 billion for 2026, representing a $100 million increase at the midpoint from its previous guidance range.

The company also increased its adjusted free cash flow outlook to a range of $18.7 billion to $18.8 billion, a $150 million increase at the midpoint, while operating cash flow guidance improved as well. T-Mobile now expects net cash from operating activities of between $28.7 billion and $28.8 billion, including payments for UScellular merger-related costs — a reference to the acquisition of UScellular's wireless operations that T-Mobile completed in 2025. Management expects approximately one million postpaid net account additions for the full year. With three quarters of 2026 now reported, those full-year targets serve as concrete benchmarks against which the company's fourth-quarter performance will be measured.

T-Mobile returned $3.5 billion to stockholders during the third quarter through $2.4 billion in share repurchases and $1.1 billion in dividends. The company maintained its capital expenditure outlook at approximately $10 billion. The improved earnings and cash flow projections supported the positive after-hours share movement. Heading into the final stretch of the year, the markers to watch include whether churn stabilizes near current levels, whether postpaid account growth stays on pace for the roughly one million addition target, and how capital spending tracks against the maintained $10 billion outlook.

Source: Blockonomi