T-Mobile US reported a solid start to 2025 with QQ1 revenue of $20.9 billion, marking a 6.6% year-over-year increase and a 4.5% sequential decline. The quarter delivered a robust gross margin of approximately 64.6%, an EBITDA margin near 38.1%, and an operating margin of ~23%. Net income reached $2.95 billion, with earnings per share of $2.59, up about 29.5% year over year. Operating cash flow was strong at $6.85 billion, supporting free cash flow of $4.40 billion despite ongoing capital investments and a sizable debt burden.
The balance sheet remains exceptionally cash-rich with $12.0 billion of cash and cash equivalents, and total debt at $120.9 billion, yielding a net debt position of ~$108.9 billion. The company generated $6.85 billion of cash from operations, and invested approximately $2.45 billion in capital expenditures, resulting in $4.40 billion of free cash flow. Liquidity remains ample, but leverage remains elevated (long-term debt of $108.3 billion and debt-to-capital around 0.66; interest coverage of ~5.2x). The combination of durable FCF, a strong network position, and disciplined capital allocation supports ongoing shareholder returns, albeit within the constraints of a leverage-heavy balance sheet.
Looking ahead, the QQ1 2025 results reinforce T-Mobile's ability to convert wireless data demand and customer scale into meaningful cash generation. The main uncertainty centers on debt levels and competitive intensity within the US wireless market. Investors should monitor capital expenditure trajectory, ARPU/mix dynamics, and any shifts in competitive pricing or promotional activity that could affect the sustainability of revenue and margins.