TLDR
- T-Mobile reported Q4 earnings of $1.88 per share, missing analyst expectations of $2.05 per share due to $293 million in severance costs
- The company added 962,000 net postpaid phone subscribers, falling short of the 981,300 analysts predicted
- Revenue climbed 11% year-over-year to $24.33 billion, slightly beating the $24.17 billion estimate
- Postpaid phone churn rate increased to 1.02% from 0.92% a year earlier as competition intensified
- T-Mobile unveiled AI-powered live translation service for phone calls in over 50 languages, launching in beta this spring
T-Mobile stock dropped 5.3% to $188.85 in premarket trading Wednesday after the wireless carrier reported fourth-quarter results that missed Wall Street expectations on both earnings and subscriber additions.
The Bellevue, Washington-based company posted earnings of $1.88 per share for the quarter. That came in below the $2.05 per share analysts had forecast.
T-Mobile said the miss was largely due to severance costs totaling $293 million after taxes. The expenses stemmed from a workforce transformation and reinvestment initiative that hit earnings by 26 cents per share.
Net profit for the quarter reached $2.1 billion, down from $2.98 billion in the same period last year. Revenue rose 11% to $24.33 billion, topping analyst estimates of $24.17 billion.
The subscriber numbers told a similar story of near-misses. T-Mobile added 962,000 net postpaid phone customers during the quarter.
That fell short of the 981,300 additions analysts expected. Postpaid phone plans represent the company’s most lucrative offering, with customers paying monthly on contract.
Churn Rates Rise as Competition Heats Up
The competitive landscape has grown more intense. AT&T added 421,000 postpaid phone subscribers in the same period.
Verizon pulled in 616,000 such customers, beating its own estimates. Both T-Mobile and Verizon launched aggressive promotions to poach customers from rivals during the quarter.
Customer retention showed signs of stress. Postpaid phone churn climbed to 1.02% in the latest quarter, up from 0.92% a year earlier.
The results included contributions from USCellular, which T-Mobile acquired in August. The company added 495,000 net customers for its 5G broadband service, exceeding analyst estimates of 460,200.
T-Mobile also brought on 63,000 net fiber customers during the period.
AI Translation Service Coming This Spring
CEO Srini Gopalan, who took the helm in November, struck an upbeat tone about the company’s future. He said T-Mobile sees opportunities to reduce customer pain points and speed up its digital transformation.
“As we look to 2026, we’re even more convicted that the future is brighter than ever before,” Gopalan said.
The company announced plans to integrate AI-driven services into its network. The headline feature is a live translation tool for phone calls.
Starting with a beta version this spring, select customers will be able to translate conversations in more than 50 languages. T-Mobile plans to test the service gradually before a full commercial launch later this year.
For the full year 2026, T-Mobile expects to add between 900,000 and 1 million net postpaid accounts total, including phone and broadband services.
The company guided for adjusted EBITDA of $37 billion to $37.5 billion for the current year. At the midpoint, that exceeds the $37.09 billion analysts had predicted.
T-Mobile shares have fallen 22% over the past year as investors worry about the ongoing price war between the carrier and its main rivals.
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