T-Mobile Raises 2026 Free Cash Flow Forecast to $18.7–$18.8 Billion
Key Facts
T-Mobile raised its 2026 adjusted free cash flow forecast to a range of $18.7–$18.8 billion, from $18.4–$18.8 billion previously, according to the company’s statement released with its third-quarter results on October 28, 2026. The revision represents an increase at the midpoint, while the company left the top end of its forecast unchanged. During the quarter, the company reported total revenue of $23.584 billion, up 7.4% year over year, and net income of $3.455 billion, up 27.3%. Diluted earnings per share were $3.22, up 33.6% year over year. The company said its adjusted free cash flow guidance includes net payments for UScellular merger costs and assumes no material net cash proceeds from securitization.
Revenue results reflected growth in the company’s core services: service revenue rose 6.2% to $19.375 billion, while postpaid service revenue increased 9.3% to $16.269 billion. The company said growth in postpaid accounts and average revenue per account exceeded its original expectations for the quarter. Average revenue per postpaid account was $155.73, up 4% from the year-earlier period. The company attributed growth in service revenue, net income and Core Adjusted EBITDA to account performance and average revenue per account. Chief Executive Srini Gopalan said the quarter was “further proof that our formula of best network, best value and best experiences is driving sustainable, profitable growth.”
T-Mobile added a net 274 thousand postpaid accounts in the third quarter, bringing the total to 35.0 million accounts, up 3% year over year. But additions declined from the second quarter, when the company recorded 277 thousand, and were below 396 thousand in the third quarter of 2025. The account churn rate rose to 1.09% from 0.99% in the second quarter and 0.97% a year earlier. By contrast, average revenue per account increased to $155.73 from $152.91 in the second quarter. The quarter-on-quarter comparison shows a slight decline in additions and higher churn alongside an increase in average revenue per account.
Adjusted free cash flow was $5.071 billion in the third quarter, up 5.3% year over year. By contrast, net cash from operating activities fell 1.6% to $7.341 billion, while cash purchases of property and equipment declined 14% to $2.270 billion. The company expects these purchases to total about $10.0 billion in 2026, including capitalized interest. In its statement, the company said net payments for UScellular merger costs are included in its adjusted free cash flow guidance. The guidance also assumes no material net cash proceeds from securitization.
Alongside its free cash flow forecast, the company raised its 2026 forecast for net cash from operating activities to $28.7–$28.8 billion. It set its Core Adjusted EBITDA forecast at $37.35–$37.45 billion and lowered its effective tax rate range to 24%–25% from 25%–26% previously, a reduction of 100 basis points at the midpoint. On customers, T-Mobile expects to add about 1.0 million postpaid accounts in 2026, at the midpoint of its previous range of 950 thousand to 1.05 million. The company said its estimate for account additions remains at the midpoint of that range. These forecasts make up the rest of the update announced with the company’s third-quarter results.
Third-quarter shareholder returns totaled $3.5 billion, including $2.4 billion in share repurchases and $1.1 billion in cash dividends. The company delivered these returns under an authorization of up to $18.2 billion through December 31, 2026. Spending on repurchases and dividends was among the quarter’s recorded uses of cash, alongside the increase in adjusted free cash flow guidance at the midpoint. T-Mobile announced its third-quarter results on October 28, 2026, and scheduled its results call for the same day at 4:30 p.m. Eastern Time. The company said an audio replay of the call would be available through its investor relations website.