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Year-over-year tone shift - average net-tone change across Risk Factors and MD&A vs the prior 10-K. This filing is 0.07pp more bullish than last year's.
Why YoY instead of absolute: the LM lexicon has ~6.6× more negative words than positive (legal/risk-disclosure language is heavy on hedging), so every 10-K reads bearish on raw tone. Year-over-year change strips that bias and surfaces the actual shift in management's framing.
Tone shift by section
The two components the gauge averages: how Risk Factors and MD&A each shifted in net tone versus last year's 10-K. The headline above is their average, so a green needle over a soft section just means the other section carried it.
Real-time Form 4 intelligence. Smarter insider tracking.
Flat
Net-tone change vs last year's 10-K.
MD&A
+0.01pp
Flat
Net-tone change vs last year's 10-K.
Per-snippet highlights
Sentence-level sentiment highlighting with category and subcategory filters is coming once the snippet-scoring pipeline lands. For now, dig into the actual section text on the Sections tab.
Language change vs prior 10-K
Risk Factors (Item 1A) - words with the biggest YoY frequency increase
Negative rising
disruptions+7
delays+4
adversely+3
disincentives+3
failure+2
Positive rising
effective+2
successful+2
leadership+2
adequately+2
leading+1
Risk Factors (Item 1A)
10,553 words
Item 1A. Risk Factors
In addition to the other information contained in this Form 10-K, the following risk factors should be considered carefully in evaluating T-Mobile. Our business, financial condition, liquidity, or operating results, as well as the price of our common stock and other securities, could be materially and adversely affected by any of these risks.
Risks Related to Our Business
We operate in a highly competitive industry. If we are unable to attract and retain customers, our business, financial condition, and operating results could be negatively affected.
The telecommunications industry is highly competitive. As the industry reaches saturation, competition in all market segments, including prepaid, postpaid, enterprise and government customers will likely further intensify, putting pressure on pricing and/or margins for us and all our competitors. Our ability to attract and retain customers will depend on multiple factors, such as network quality and capacity, customer service excellence, effective marketing strategies, competitive pricing, compelling value propositions, and distribution and logistics capabilities. Additionally, targeted marketing approaches for a broad spectrum of customer segments, coupled with continuous innovation in products and services, are essential for retaining and expanding our customer base. If we are to differentiate our services from those of our competitors, it would affect our competitive position and ability to grow our business.
Language change vs prior 10-K
MD&A (Item 7) - words with the biggest YoY frequency increase
Negative rising
restructuring+23
impairment+4
losses+2
closed+2
restated+2
Positive rising
exclusive+5
effective+3
achieve+3
success+3
beautiful+2
MD&A (Item 7)
15,542 words
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
The objectives of our Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) are to provide users of our consolidated financial statements with the following:
• A narrative explanation from the perspective of management of our financial condition, results of operations, cash flows, liquidity and certain other factors that may affect future results;
• Context to the consolidated financial statements; and
• Information that allows assessment of the likelihood that past performance is indicative of future performance.
Our MD&A is provided as a supplement to, and should be read together with, our audited consolidated financial statements as of December 31, 2025 and 2024, and for each of the three years in the period ended December 31, 2025, included in Part II, Item 8 of this Form 10-K. Except as expressly stated, the financial condition and results of operations discussed throughout our MD&A are those of T-Mobile US, Inc. and its consolidated subsidiaries.
Acquisition of UScellular Wireless Business
Transaction Overview
On May 24, 2024, we entered into a securities purchase agreement with United States Cellular Corporation (“UScellular”), Telephone and Data Systems, Inc., and USCC Wireless Holdings, LLC for the acquisition of substantially all of UScellular’s wireless operations and select AWS, PCS, 600 MHz, 700 MHz and other spectrum assets for an aggregate purchase price of approximately $4.4 billion, payable in cash and the assumption of up to $2.0 billion of debt through exchange offers to certain UScellular debtholders.
We expect to continue to see intense competition in all market segments from traditional Mobile Network Operators (“MNOs”), such as AT&T and Verizon, who have each invested heavily in spectrum, their wireless networks, and services and device promotions. Numerous other regional MNOs and MVNOs offering wireless services may also compete with us in some markets, including cable providers, such as Comcast, Charter, Cox, and Altice, as they continue to diversify their offerings to include wireless services offered under MVNO agreements. As new products and services emerge, we may also face competition from non-traditional competitors outside the wireless communications services industry, including satellite providers offering connectivity services using alternative technologies.
In the market for broadband services, traditional cable providers, AT&T, Verizon, and other players such as satellite and fiber providers, all compete for customers. To complement our fixed wireless service, we have entered into joint venture agreements aimed at establishing a robust fiber wireline network in certain geographic regions that we believe will complement our fixed wireless services in those areas. However, these partnerships also involve inherent risks. See “Any acquisition, investment, joint venture, merger, or divestiture may subject us to significant risks, any of which may harm our business” for further discussion of such risks.
If we are unable to compete effectively in attracting and retaining customers in markets where we operate, it could negatively affect our business, financial condition, and operating results.
We have experienced cyberattacks and may experience disruptions, data loss and other security breaches, whether directly or indirectly through third parties whose products and services we rely on in operating our business.
Our business involves the receipt, storage, and transmission of confidential information about our customers, such as sensitive personal, account, and payment information, confidential information about our employees and suppliers, and other sensitive information about our Company, such as our business plans, transactions, financial information, and intellectual property (collectively, “Confidential Information”). Additionally, to offer services to our customers and operate our business, we utilize several applications and systems, including those we own and operate, such as our wireless network, as well as others provided to us by third parties, such as cloud service providers and SaaS companies (collectively, “Systems”).
We are subject to persistentcyberattacks and threats to our business from bad actors seeking to gainunauthorized access to Confidential Information and compromise Systems to undermine availability or integrity. They are perpetrated by a variety of
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groups and persons, including nation state-sponsored parties, malicious actors, employees, contractors, and other third parties. Some actors reside in jurisdictions where law enforcement measures to address such attacks are ineffective or unavailable.
Cyberattacksagainst companies like ours are increasing in frequency and scope of potential harm over time, and the methods used to gainunauthorized access constantly evolve, making it increasingly difficult to anticipate, prevent, and detect incidentssuccessfully in every instance. In some cases, these bad actors exploit bugs, errors, misconfigurations or other vulnerabilities in our Systems to obtain Confidential Information. In other cases, these bad actors obtain unauthorized access to Confidential Information by exploiting insider access or utilizing login credentials taken from our customers, employees, or third-party providers through credential harvesting, social engineering or other means. Other bad actors aim to cause serious operational disruptions to our business and Systems through ransomware or distributed denial of service attacks. Moreover, the amount and scope of insurance that we maintain againstlosses resulting from any such incidents or security breaches may not be sufficient to cover our losses or otherwise adequately compensate us for any disruptions to our business that may result.
Although we regularly work to identify, track, and remedy security vulnerabilities, given the complex nature of our Systems and the tools that are available to us, we may be unable to identify vulnerabilities in a timely manner, or to apply patches or compensating measures that address such vulnerabilities, before bad actors can exploit them. The exploitation of a security vulnerability before patches or measures are applied could materially compromise Confidential Information and Systems.
In addition, we routinely rely upon third-party providers whose products and services are used in our business. These third-party providers have experienced, and will continue to experience, cyberattacks that involve attempts to access our Confidential Information and/or to create operational risk that could materially and adversely affect our business, and these providers also face other security challenges common to all parties that collect and process information. Additionally, our Systems include components from third parties or fourth parties we do not control and may have compromises, defects, flaws, or design errors unknown to us.
As a result of the previously disclosedcyberattacks in August 2021 and January 2023, we incurred significant costs in connection with, among other things, responding to and resolving mass arbitration claims, multiple class action lawsuits, and an FCC investigation. For more information on the foregoing, see “– Contingencies and Litigation – Litigation and Regulatory Matters” in Note 18 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements.
In addition to the August 2021 cyberattack and the January 2023 cyberattack, we have experienced unrelated, non-material incidents involving unauthorized access to certain Confidential Information and Systems. Typically, these incidents have involved attempts to commit fraud by taking control of a customer’s phone line, often by exploiting insider access or using compromised credentials. In other cases, the incidents have involved unauthorized access to certain of our customers’ private information, including payment information, financial data, social security numbers or passwords, and our intellectual property. Some of these incidents have occurred at third-party providers, including third parties who provide us with various Systems and others who sell our products and services through retail locations or take care of our customers.
Our procedures and safeguards to prevent unauthorized access to Confidential Information and to defendagainstcyberattacks seeking to disrupt our operations must be continually evaluated and enhanced to address the ever-evolving threat landscape and changing cybersecurity regulations, including while we adapt complex digital transformation efforts. These preventative actions require the investment of significant resources and management time and attention. Additionally, we do not have control of the cybersecurity systems, breachprevention, and response protocols of our third-party providers, including through our cybersecurity programs or policies. While T-Mobile may have contractual rights to assess the effectiveness of many of our providers’ systems and protocols, we do not have the means to always know or assess the effectiveness of all of our providers’ systems and controls. We cannot provide any assurances that actions taken by us, or our third-party providers, including through our cybersecurity programs or policies, will adequately repel a significant cyberattack or prevent or substantially mitigate the impacts of cybersecurity breaches or misuses of Confidential Information, unauthorized access to our networks or Systems or exploitsagainst third-party environments, or that we, or our third-party providers, will be able to effectively identify, investigate, and remediate such incidents in a timely manner or at all. We expect to continue to be the target of cyberattacks, given the nature of our business, and we expect the same with respect to our third-party providers. We also expect that threat actors will continue to gain sophistication including in the use of tools and techniques (such as AI) that are specifically designed to circumvent security controls, evade detection, and obfuscate forensic evidence, making it more challenging to identify, investigate, and recover from future cyberattacks in a timely and effective manner. The continued development and integration of AI in our and our third-party providers’ operations, products and services is expected to pose new, additional, and unknown cybersecurity risks. In addition, we have acquired and continue to acquire companies with cybersecurity vulnerabilities or unsophisticated security measures, which expose us to significant cybersecurity, operational, and financial risks. If we fail to protect Confidential Information or to prevent operational disruptions from future cyberattacks, there may be a material adverse effect on our business, reputation, financial condition, cash flows, and operating results.
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If we fail to adopt and deploy emerging network technologies in a timely and effective manner, our competitive position could erode, which may adversely affect our business, financial condition, and operating results.
Our competitive advantage and reputation depend on our ability to provide industry-leading network coverage, speed, and reliability. While we have established a leadership position in 5G, the telecommunications industry evolves rapidly, and emerging technologies, such as AI-driven Radio Access Networks (“AI-RAN”) and the potential transition to 6G, may redefine network standards and increase customer expectations. Our competitors may seek to differentiate through marketing, brand positioning, or third-party recognition as leaders in network performance, coverage, or reliability. To stay ahead, we continue to drive improvements in the 5G network, including our nationwide 5G standalone network and deployment of 5G Advanced features, and are investing in strategic collaborations with third parties, such as AI-RAN partnerships, to develop technologies that are intended to advance our network capabilities. Despite these efforts, we may encounter technical challenges, regulatory hurdles, supply chain constraints, or unexpecteddelays in developing and deploying new network technologies. If we fail to anticipate market trends, efficiently integrate innovative solutions into our network, or maintain the quality and reliability of our network, our market share and competitive standing could erode, adversely affecting our business, financial condition, and operating results.
If we fail to effectively execute our digital transformation and drive customer and employee adoption of emerging technologies, our competitive position and financial performance could be materially harmed.
We are engaged in complex digital transformation efforts intended to streamline operations, enhance customer experience, and improve our overall competitiveness. These initiatives involve integrating emerging and rapidly evolving technologies, reconfiguring internal processes, and implementing advanced data analytics and AI-driven tools, including those developed through our partnerships with several third-party providers. The successful execution of our planned transformation is subject to significant uncertainties. For example, we may face challenges in harmonizing complex system architectures, integrating new platforms with legacy infrastructure, and managing large volumes of data from disparate sources. We must also maintain rigorous data security and privacy safeguards, ensure our AI-driven solutions comply with evolving regulatory standards, and mitigate potential issues such as algorithmic bias or unintended operational disruptions. Additionally, implementing these digital solutions often requires substantial capital and operational expenditures, extensive employee training, specialized skill sets that may be difficult to source, and close coordination with multiple third-party vendors and partners. If we fail to execute these initiatives effectively, our ability to realize the intended benefits of digital transformation may be compromised.
The successful execution of our digital transformation depends not only on the effective development and deployment of new technologies, but also on the willingness and ability of customers and employees to adopt digital-first channels and processes. Even where technical capabilities are successfully implemented, customer and employee adoption may lag expectations or revert to supported channels, which could limit the anticipated improvements in efficiency, service quality, and revenue generation. If adoption does not occur at the scale or pace anticipated, the intended benefits of these initiatives may not be fully realized.
As a result, failure to effectively execute our digital transformation efforts, including driving meaningful customer and employee adoption, could materially and adversely affect our competitive position, financial performance, and brand reputation.
We rely on highly skilled personnel throughout all levels of our business. Our business could be harmed if we are unable to retain or motivate key personnel, hire a sufficient number of qualified new personnel, or maintain our corporate culture.
Our future success depends in substantial part on our ability to attract, recruit, hire, motivate, develop, and retain talented personnel possessing the qualifications, experience, capabilities and skills we need for all areas of our organization, including our CEO and members of our leadership team. Succession planning to ensure the effective transfer of knowledge and a seamless transition when key personnel depart is also important to our long-term success. On November 1, 2025, G. Michael Sievert retired as our Chief Executive Officer while continuing to serve as Vice Chairman of the Company and Vice Chairman of our Board of Directors, and Srinivasan Gopalan began serving as our President and Chief Executive Officer. We also announced several leadership changes. In addition, we began to implement enterprise-wide restructurings in 2025. If we are unable to effectively manage the CEO transition, the leadership changes and other restructuring changes, our ability to execute our business strategies and to retain key executives and talent could be adversely affected. Additionally, as we continue to make significant investments in new technologies and new business areas, we are increasingly dependent on being able to hire and retain technically skilled employees, including those with expertise in AI and machine learning.
Both external factors, such as fluctuations in economic and industry conditions, changes in U.S. immigration policies, regulatory changes, political forces, and the competitive landscape, and internal factors, such as employee tolerance for changes
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in our corporate culture, organizational changes, limited remote working opportunities, and our compensation programs, may affect our ability to effectively manage our workforce. Further, employee compensation and benefit costs may increase due to inflationary pressures, and if our compensation does not keep up with inflation or with that of our competitors, we may see increased employee dissatisfaction and departures or difficulty in recruiting new employees. If key employees depart or we are unable to recruit and integrate new employees successfully, our business could be negatively impacted.
System failures and business disruptions may prevent us from providing reliable service, which could materially and adversely affect our reputation and financial condition.
We rely upon systems and networks – those of third-party suppliers and other providers, in addition to our own – to provide services to our customers. System, network, or infrastructure failures resulting from one of several potential causes may prevent us from providing reliable service or otherwise operating our business. Examples of these risks include:
• physical damage, power surges or outages, equipment failure, or other service disruptions with respect to both our wireless and fiber networks, including those resulting from severe weather, storms, earthquakes, floods, hurricanes, wildfires, and other natural disasters, which may occur more frequently or with greater intensity as a result of global climate change, public health crises, terrorist attacks, political instability and volatility and acts of war;
• human error due to factors such as poor change management or policy compliance;
• risks to our access to and use of reliable energy and water;
• hardware or software failures or outages of our business systems or communications network;
• supplier failures or delays; and
• shifts in physical conditions due to climate change, such as sea-level rise or changes in temperature or precipitation patterns, which may impact the operating conditions of our infrastructure or other infrastructure we rely on.
Such events could cause us to lose customers and revenue, incur expenses, suffer reputational damage, and subject us to fines, penalties, adverse actions or judgments, litigation, or governmental investigations. Remediation costs could include liability for information loss, costs of repairing infrastructure and systems, and/or costs of incentives offered to customers. Our insurance may not cover or may not be adequate to fully reimburse us for costs and losses associated with such events, and such events may also impact the availability of insurance at costs and other terms we find acceptable for future events.
The scarcity and cost of additional wireless spectrum, and regulations relating to spectrum use, may adversely affect our business, financial condition, and operating results.
We continue to acquire and deploy new spectrum to expand and deepen our 5G coverage, maintain our quality of service, meet increasing or changing customer demands, and deploy new technologies. To expand and differentiate our services from those of our competitors, we will continue to actively seek to make additional investments in new spectrum, which could be significant. However, we may be unable to secure the additional spectrum necessary to maintain or enhance our competitive position on favorable terms or at all.
The continued interest in acquiring spectrum by existing carriers and others, including satellite providers and speculators, may reduce our ability to acquire or renew spectrum holdings (such as 600 MHz and 2.5 GHz), and may increase the cost of spectrum made available in the secondary markets and government auctions. Additionally, the FCC may be unable to make sufficient additional spectrum available for auction to meet the demand from all interested parties. As a result, any such spectrum that is made available at auction may be subject to heightened competition and priced beyond levels we are able or willing to pay.
Even if new spectrum becomes available to us, the FCC or other government entities may impose conditions on the acquisition and use of such spectrum, such as the configuration or geographic areas in which the spectrum may be deployed. These conditions may substantially increase the costs we incur or negatively affect the value of the spectrum to our business.
If we cannot acquire needed spectrum from the government or other sources, if competitors acquire spectrum that enables them to provide services competitive with ours, or if we cannot deploy services over acquired spectrum on a timely basis, without burdensome conditions, at reasonable cost, and while maintaining network quality levels, our ability to attract and retain customers and our business, financial condition, and operating results could be materially and adversely affected.
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Any acquisition, investment, joint venture, merger, or divestiture may subject us to significant risks, any of which may harm our business.
We have pursued and may continue to pursue additional acquisitions of, investments in, or joint ventures or mergers with, other companies, or the acquisition of spectrum, technologies, services, products, or other assets that we believe would complement or expand our business. For example, on August 1, 2025, we completed the acquisition (the “UScellular Acquisition”) of the UScellular Wireless Business (as defined below). We may also elect to divest some of our assets to third parties. Some of these transactions could be significant relative to the size of our business and operations. Any such transactions involve risks and could present financial, managerial, and operational challenges, including:
• diversion of management attention from running our existing business;
• increased costs to integrate the networks, spectrum, technology, personnel, customer base, distributors and business partners and business practices of the company involved in any such transaction with our business;
• increased interest expense and leverage or limits on other uses of cash;
• potential loss of talent during integration due to differences in culture, location, or other factors;
• difficulties in effectively integrating (or supplanting) the financial, operational, and sustainability systems of the business involved in any such transaction into our financial, operational, and sustainability reporting infrastructure and internal control framework in an effective and timely manner;
• risks of entering markets in which we have no or limited experience and where competitors have stronger market positions;
• to the extent any acquired business has international operations, potential exposures to risks associated with maintaining and expanding such operations, including unfavorable and uncertain regulatory, political, economic, tax, and labor conditions;
• potential exposure to material liabilities not discovered in the due diligence process in connection with any such transaction;
• significant transaction-related expenses in connection with pursuing any such transaction, whether consummated or not;
• risks related to our ability to obtain required regulatory approvals necessary to consummate any such transaction; and
• any business, technology, service, or product involved in any such transaction may significantly underperform relative to our expectations, and we may not achieve the benefits we expect from the transaction, which could also result in a write-down of goodwill and other intangible assets associated with such transaction.
Our restructuring and integration activities associated with the UScellular Acquisition are expected to occur over the next two years and may involve risks related to network integration and customer migration, including potential service disruptions, delays in transitioning customer accounts and systems, and challenges in maintaining customer experience during the integration period.
We formed joint ventures aimed at establishing fiber broadband networks that complement our fixed wireless services. Differences in views among the joint venture participants may result in delayed decisions or disputes. Operating through joint ventures in which we do not hold a majority or controlling ownership interest results in us having limited control over many decisions made with respect to the businesses of the joint ventures. We also cannot control the actions of our co-investors in our joint ventures. These joint ventures may not be subject to the same requirements regarding internal controls and internal control over financial reporting that we follow. As a result, internal control problems may arise with respect to these joint ventures. Any of these risks could have a material adverse effect on our business, financial condition, and operating results and could also affect our reputation.
Additionally, in connection with our merger (the “Sprint Merger”) with Sprint Corporation (“Sprint”) and related transactions, including the acquisition by DISH Network Corporation (“DISH”) of certain prepaid wireless business (the “Prepaid Transaction”), we agreed to fulfill various government commitments (the “Government Commitments”), including, among others, extensive 5G network build-out, delivering high-speed wireless services to the vast majority of Americans, and marketing our in-home fixed wireless product to households where spectrum capacity is sufficient, as well as commitments related to national security. These Government Commitments materially increased our compliance obligations and could result in additional expenses and/or penalties in the future.
Any failure to fulfill our obligations under the Government Commitments in a timely manner could result in substantial fines, penalties, or other legal and administrative actions, liabilities, and reputational harm.
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Economic, political, and market conditions may adversely affect our business, financial condition, and operating results.
Our business, financial condition, and operating results are affected by changes in general economic and political conditions, including interest rates, consumer credit conditions, consumer debt levels, consumer confidence, unemployment rates, economic growth, tariffs and trade restrictions, fluctuations in global currencies, immigration policies, energy costs, rates of inflation (or concerns about deflation), supply chain disruptions, impacts of current geopolitical conflict or instability, such as the Ukraine-Russia and Israel-Hamas wars and any further escalations thereof, and other macroeconomic factors.
The telecommunications industry, broadly, is dependent on population growth, including growth in the immigrant population. As a result, we expect the telecommunications industry’s customer growth rate to be moderate in comparison with historical growth rates, leading to ongoing competition for customers. Rising prices for goods, services, and labor due to inflation, including inflation resulting from higher tariffs, restrictions, and other economic disincentives to trade, could adversely impact our margins and growth.
Our services and device financing plans are available to a broad customer base, a significant segment of which may be vulnerable to weak economic conditions, particularly our subprime customers. We may have greaterdifficulty in gaining new customers within this segment, and existing customers may be more likely to terminate service and default on device financing plans due to an inability to pay.
Weak economic and credit conditions may also adversely affect our suppliers, dealers, wholesale partners or MVNOs, and enterprise and government customers, some of which may file for bankruptcy, or may experience cash flow or liquidity problems, or may be unable to obtain or refinance credit such that they may no longer be able to operate. Any of these could adversely impact our ability to distribute, market, or sell our products and services.
Changes to trade policies, including higher tariffs, restrictions, and other economic disincentives to trade, may lead to operational delays, higher procurement and operational costs, and increased regulatory and compliance complexities, resulting in supply chain disruptions and higher prices, and lower demand for devices and services we sell.
As a provider of telecommunications services, we depend on suppliers to provide us, directly or through other suppliers, with items such as equipment for our network, handsets, tablets, accessories, other mobile communication devices, other components and raw materials. Changes or proposed changes in U.S. or other countries’ trade policies that result in higher tariffs, restrictions, and other economic disincentives to international trade have occurred in the past, and in the future may occur, which may materially increase the costs we incur in developing, deploying and maintaining our network and offering products and services to our customers. A certain portion of the increased costs may be absorbed by certain suppliers, but some suppliers may struggle to absorb the increased costs, especially over the long term, potentially leading to supply disruptions or cost pass-throughs to us that may require us to increase the prices we charge our customers. In addition, rapid changes in trade policies may negatively affect procurement timelines and supplier relationships and may introduce new compliance requirements. We may face delays in sourcing critical equipment due to customs clearance and supply chain bottlenecks, and material changes to cost structures could pressure our expenses and customer pricing.
Our attempts to mitigate potential disruptions to our supply chain and offset procurement and operational cost pressures, such as through alternative sourcing and/or increases in the selling prices of some of our products and services, may not be successful. Higher product or service prices for our customers may make it more difficult to attract new customers or increase customer churn. Furthermore, we may not be able to offset any cost increases through productivity and cost-saving initiatives. To the extent that cost increases result in significant increases in our expenditures, or if our price increases are not sufficient to offset these increased costs adequately or in a timely manner, and/or if our revenues decrease, our business, financial condition or operating results may be adversely affected.
If we do not successfully deliver new products and services, we may not realize our intended growth targets or generate the expected returns from our business, adversely affecting our financial condition and operating results.
We continue to expand our offerings beyond traditional wireless services to include broadband (fixed wireless and fiber), specialized network solutions, such as network slicing for first responders (“T-Priority”) and 5G advanced network solutions (“ANS”) for enterprises, advertising technology and services, and financial products, such as the T-Mobile Visa credit card introduced in November 2025. These new ventures require significant capital, expertise, and operational support, and their success depends on factors we cannot fully control or predict. Increased competition, technical challenges, security concerns, operational complexities, or shifting regulatory landscapes could delay product rollouts, inflate costs, or limit adoption rates. Additionally, entering new markets or lines of business may expose us to unfamiliar regulatory requirements, compliance challenges, or risks to existing customer relationships. Customer demand for new products and services is difficult to predict,
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and adoption may be slower than anticipated or may not occur at all. Should these new products and services fail to gain traction, achieve sufficient customer adoption, generate expected financial returns, or deliver value to customers, we could incur substantial expenses without offsetting revenue gains, adversely affecting our business, financial condition, operating results and competitive position.
We rely on third parties to provide products and services for the operation of our business, and the failure or inability of such parties to provide these products or services could adversely affect our business, financial condition, and operating results.
We have a broad set of suppliers to help us develop, maintain, and troubleshoot products and services such as wireless and fiber network components, software development services, and billing and customer service support. However, in certain areas such as billing services, voice, and data communications transport services, wireless or fiber network infrastructure equipment, handsets, other devices, back-office processes, and payment processing, there are a limited number of suppliers that can provide adequate support, which decreases our flexibility to switch to alternative third parties. Unexpectedtermination of our arrangement with any of these suppliers, or difficulties in renewing our commercial arrangements with them, could have a material adverse effect on our business operations.
Our suppliers and third-party technology partners are also subject to their own risks, including, but not limited to, cybersecurity, economic, financial and credit conditions, labor forcedisruptions, geopolitical tensions, disruptions in global supply chain, natural catastrophic events, such as earthquakes, floods, hurricanes, storms, heatwaves and fires, energy shortages, power outages, equipment failures, terrorist attacks or other hostile acts, and public health crises, such as the COVID-19 pandemic. These events may result in performance below the levels required by their contracts or cause them to suspend, limit, or cease their operations, or terminate or reduce their relationship with us. We could experience severe business disruptions and delays in technology initiatives if critical suppliers or service providers fail to comply with their contracts, if we experience delays or service degradation during any transition to a new outsourcing provider or other supplier, or if we are required to replace the supplied products or services with those from another source, especially if the replacement becomes necessary on short notice. Any such disruptions could have a material adverse effect on our business, financial condition, and operating results.
Further, some of our suppliers may provide services from outside the United States, which carries additional regulatory and legal obligations. We rely on suppliers to provide us with contractual assurances and to disclose accurate information regarding risks associated with their provision of products or services in accordance with our policies and standards, including our Supplier Code of Conduct and our third-party risk management practices. The failure of our suppliers to comply with our expectations and policies could expose us to additional legal and litigation risks and lead to unexpected contract terminations.
Sociopolitical volatility and polarization may adversely affect our business operations and reputation.
The current sociopolitical environment is characterized by deep complexity, volatility, and polarization on various social and political issues. The increasing intersection of technology and politics has led to rapid and unpredictable shifts in public sentiment. Social media and digital platforms have amplified the voices of various stakeholders, creating the potential for swift change in public opinion and stronger reactions to corporate actions. As a company that sells products and services across the nation to millions of customers, these dynamics increase the risk of potential reputational damage, boycotts, and shifts in consumer behavior that could adversely affect our brand, sales, and profitability. Our ability to respond effectively, sensitively, and authentically to the expectations and concerns of our customers, employees, and other stakeholders is key to mitigating these risks. If we are unable to manage these challenges effectively, there may be adverse impacts on our business, reputation, financial condition, and operating results.
Additionally, we are subject to emerging and evolving regulatory requirements and frameworks regarding environmental, social and governance matters, including recently enacted or proposed legislation in jurisdictions such as California. The ultimate scope of these regulations may change as they are finalized, and they may not be uniform across jurisdictions. Meeting these obligations may require significant investments of time, capital, and personnel.
Risks Related to Our Indebtedness
Our substantial level of indebtedness could adversely affect our business flexibility and ability to service our debt and could increase our borrowing costs.
We have, and we expect that we will continue to have, a substantial amount of debt. Our substantial level of indebtedness could have the effect of, among other things, reducing our flexibility in responding to changing business, economic, market, and industry conditions and increasing the amount of cash required to service our debt. In addition, this level of indebtedness may
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also reduce funds available for capital expenditures, any Board-approved share repurchases, dividends, or other activities. Those impacts may put us at a competitive disadvantage relative to other companies with lower debt levels. Further, we may incur substantial additional indebtedness in the future, subject to the restrictions contained in our debt instruments, if any, which could increase the risks associated with our capital structure.
Our ability to service our substantial debt obligations will depend on future performance, which will be affected by business, economic, market, and industry conditions and other factors. There is no guarantee that we will be able to generate sufficient cash flow to service our debt obligations when due. If we are unable to meet such obligations or fail to comply with the financial and other restrictive covenants contained in the agreements governing such debt obligations, we may be required to refinance all or part of our debt, sell important strategic assets at unfavorable prices, or make additional borrowings. We may not be able to, at any given time, refinance our debt, sell assets, or make additional borrowings on commercially reasonable terms or at all, which could have a material adverse effect on our business, financial condition, and operating results.
Changes in credit market conditions and other factors could adversely affect our ability to raise debt favorably.
Instability in the global financial markets, inflation, policies of various governmental and regulatory agencies, including changes in monetary policy and interest rates, and other general economic conditions could lead to volatility in the credit and equity markets. This volatility could limit our access to the capital markets, leading to higher borrowing costs or, in some cases, an inability to obtain financing on terms that are acceptable to us or at all. Further, deterioration in our operating performance may lead to a decrease in our credit ratings, which could also impact our ability to access the debt capital markets at rates favorable or acceptable to us.
In addition, any hedging agreements we may enter into to limit our exposure to interest rate increases or foreign currency fluctuations may not offer complete protection from these risks or may be unsuccessful, and consequently may effectively increase the interest rate we pay on our debt or the exchange rate with respect to any debt we may incur in a foreign currency, and any portion not subject to such hedging agreements would have full exposure to interest rate increases or foreign currency fluctuations, as applicable. If any financial institutions that are parties to our hedging agreements were to default on their payment obligations to us, declare bankruptcy or become insolvent, we would be unhedged against the underlying exposures. Any posting of collateral by us under our hedging agreements and the modification or termination of any of our hedging agreements could negatively affect our liquidity or other financial metrics. Any of these risks could have a material adverse effect on our business, financial condition, and operating results.
Risks Related to Legal and Regulatory Matters
Failure to maintain effective internal control over financial reporting could impair our compliance with Section 404 of the Sarbanes-Oxley Act, which could lead to material misstatements in our financial statements and adversely affect our operations and reputation.
We rely on robust internal controls to provide reasonable assurance regarding the reliability of our financial information and the preparation of our financial statements. These controls include, among other things, properly designed processes, clear policies and procedures, competent personnel, effective oversight functions, and reliable information systems that facilitate the collection, processing, and communication of financial data. As we continue to refine and improve our systems to align with our evolving business needs, there is no assurance that these improvements will be implemented without delays or disruptions. A failure or significant delay in updating our systems, or a failure to effectively integrate new systems with existing processes, could compromise the effectiveness of our internal controls. If our internal controls are not effectively designed or properly implemented, or if changes to our business processes or organizational structure outpace our internal controls’ ability to adapt, we could experience material weaknesses or other deficiencies.
Any material weaknesses or other control deficiencies that may arise in the future could require significant time and resources to remediate. If we are unable to remediate material weaknesses in internal control over financial reporting, then our ability to analyze, record and report financial information free of material misstatements, to prepare financial statements within the time periods specified by the rules and forms of the SEC and otherwise to comply with the requirements of Section 404 of the Sarbanes-Oxley Act would be negatively impacted. As a result, we could face legal fines and penalties, diminished investor confidence, and adverse impacts on our access to the capital markets, potentially resulting in a decline in our stock price and harm to our reputation.
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Compliance with the current regulatory framework, including our national security obligations, and any changes in regulations or in the regulatory framework under which we operate could adversely affect our business, financial condition, and operating results.
We are subject to regulatory oversight by various federal, state, and local agencies, as well as judicial review and actions, on issues related to the telecommunications industry that include, but are not limited to, roaming, interconnection, spectrum allocation and licensing, facilities siting, pole attachments, intercarrier compensation, Universal Service Fund (“USF”), 911 services, robocalling/robotexting, consumer protection, consumer privacy, and cybersecurity. We are also subject to regulations in connection with other aspects of our business, including device financing and insurance activities.
The FCC regulates the licensing, construction, modification, operation, ownership, sale, and interconnection of wireless communications systems, as do some state and local regulatory agencies. In particular, the FCC imposes significant regulation on licensees of wireless spectrum with respect to how radio spectrum is used by licensees or at what power levels, the nature of the services that licensees may offer and how the services may be offered, and the resolution of issues of interference between operators in the same or adjacent spectrum bands. Changes necessary to resolveinterference issues or concerns may have a significant impact on our ability to fully utilize our spectrum. Additionally, the FTC and other federal and state agencies have asserted that they have jurisdiction over some consumer protection matters, and the elimination and prevention of anticompetitive business practices with respect to the provision of wireless products and services.
We cannot assure that the FCC or any other federal, state, or local agencies will not adopt or change regulations, change or discontinue existing programs, implement new programs, or take enforcement or other actions that would adversely affect our business, impose new costs, or require changes in current or planned operations, including timing of the shutdown of legacy technologies.
We also face potential investigations by, and inquiries from or actions by state public utility commissions. We also cannot assure that Congress will not amend the Communications Act, from which the FCC obtains its authority, and which serves to limit state authority, or enact other legislation in a manner that could be adverse to our business.
Failure to comply with applicable regulations could have a material adverse effect on our business, financial condition, and operating results. We could be subject to fines, forfeitures, and other penalties (including, in extreme cases, revocation of our spectrum licenses) for failure to comply with the FCC or other governmental regulations, even if any such noncompliance was unintentional. The loss of any licenses, or any related fines or forfeitures, could adversely affect our business, financial condition, and operating results.
In addition, we operate under agreements with U.S. government agencies, including a mitigation agreement with the Committee on Foreign Investment in the United States, under which we are required to implement and maintain certain security measures and practices to address national security. Our national security obligations may limit our control over certain U.S. facilities, contracts, personnel, vendor selection, and operations, which could adversely affect our business, financial condition, and operating results. Any failure to fulfill our obligations could result in additional compliance cost, substantial fines, penalties, or other legal and administrative actions, liabilities, and reputational harm.
Laws and regulations relating to the handling of privacy, data protection, and AI may result in increased costs, legal claims, fines, or reputational damage.
Since 2020, more than a dozen states have enacted new, comprehensive privacy laws that create new data privacy rights for residents of those states and new compliance obligations for us and the industry in general, in addition to private rights of action for certain types of data breaches. These include the California Consumer Privacy Act (“CCPA”) and similar laws in other states. Pending legislation in a number of other states would create similar laws elsewhere. All of these new privacy laws and others that we expect to be developed and enacted going forward will impose additional data protection obligations and potential liability on companies such as ours doing business in those states. Further, privacy laws also limit our ability to collect and use personal information.
We have incurred and will continue to incur significant implementation costs to ensure compliance with the CCPA, new privacy laws in other states, and their related regulations, including managing the complexity of laws that vary from state to state. Both federal and state governments are considering additional privacy laws and regulations which, if passed, could further impact our business, strategies, offerings, and initiatives and cause us to incur further costs. Any actual or perceived failure to comply with the CCPA, other data privacy laws or regulations, or related contractual or other obligations, or any perceived privacy rights violation, could lead to investigations, claims, and proceedings by governmental entities and private parties,
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damages for contract breaches, and other significant costs, penalties, and other liabilities, as well as harm to our reputation and market position.
AI-related laws and regulations continue to remain uncertain and may vary from jurisdiction to jurisdiction. Our obligations to comply with the evolving legal and regulatory landscape may require us to incur significant additional costs or limit our ability to incorporate certain AI capabilities into our business operations or product offerings. As we integrate AI technologies into our business, we must navigate varying regulations that could impact our operations and product development. Additionally, the use of AI may also raise certain ethical issues or concerns, and while we are focused on developing and implementing AI responsibly, we may be unable to identify or resolve those issues before they arise . Failure to comply with these regulations or prevent AI-related issues or unintended consequences from occurring, could result in fines, penalties, or restrictions on our use of AI, which could adversely affect our business.
Outside of the United States, as a result of our business acquisitions, we are subject to an expanding set of privacy, data protection, and related regulatory requirements in jurisdictions where we conduct operations or process personal data. These laws may apply based on factors such as our establishment or operations in a jurisdiction or data processing activities conducted there. Certain international data protection regimes, including those in the European Union and the United Kingdom, impose specific obligations on the collection, use, sharing, and transfer of personal data. Compliance with these obligations may increase operational complexity and costs, limit our ability to use or transfer data across jurisdictions, or require changes to our products, services, or business practices. Enforcement approaches and penalties vary by jurisdiction and may include significant fines or other sanctions, as well as reputational harm.
Unfavorable outcomes of legal proceedings may adversely affect our business, reputation, financial condition, cash flows, and operating results.
We and our affiliates are involved in various disputes, governmental and/or regulatory inspections, investigations and proceedings, mass arbitrations, and litigation matters. For more information, see “– Contingencies and Litigation – Litigation and Regulatory Matters” in Note 18 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements.
In addition, we, along with equipment manufacturers and other carriers, are subject to current and potential future lawsuits allegingadverse health effects arising from the use of wireless handsets or from wireless transmission equipment such as cell towers. In addition, the FCC has from time to time gathered data regarding wireless device emissions, and its assessment of the risks associated with using wireless devices may evolve based on its findings. The Department of Health and Human Services has indicated that it is undertaking a study on electromagnetic radiation and health research. Any allegations of adverse health effects or changes in risk assessments could result in customers purchasing fewer devices and wireless services, could result in significant legal and regulatory liability, and could have a material adverse effect on our business, reputation, financial condition, cash flows, and operating results.
Such legal proceedings can be complex, costly, and highly disruptive to our business operations by diverting the attention and energy of management and other key personnel. The assessment of the outcome of legal proceedings, including our potential liability, if any, is a highly subjective process that requires judgments about future events that are not within our control. The amounts ultimately received or paid upon settlement or pursuant to a final judgment, order, or decree may differ materially from amounts accrued in our financial statements. In addition, litigation or similar proceedings could impose restraints on our current or future manner of doing business. Such potential outcomes including judgments, awards, settlements or orders could have a material adverse effect on our business, reputation, financial condition, cash flows and operating results.
Our business may be adversely impacted if we are not able to protect our intellectual property rights or if we infringe on the intellectual property rights of others.
We rely on a variety of intellectual property assets, including patents, copyrights, trademarks, and domains, to maintain our competitiveness. If we are unable to protect our intellectual property due to factors such as changes in U.S. intellectual property laws, the value of our intellectual property may become impaired, which may adversely impact our business and financial results.
Additionally, we have faced and will continue to face various litigationsalleging that our products or services infringe patents or other intellectual property of third parties, including potential litigation arising from our use of AI. If successful, these litigations could result in an award of financial compensation, including damages or royalties, business disruptions, reputational harm, or an order requiring that we cease offering, selling, and using the relevant products, equipment, services, and network functions. Defendingagainst such litigation is not only costly and time-consuming, but it may also be disruptive to our business operations and divert resources and attention. Furthermore, the outcomes of these litigations are inherently uncertain.
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Our suppliers and vendors also face and will continue to face, intellectual property litigation related to the technology used in the products, equipment, and services they provide to us. If successful, such litigationagainst our suppliers and vendors might impact their ability to continue to provide the relevant products, equipment, and services to us.
We offer regulated financial services products. These products expose us to a wide variety of state and federal regulations.
The financing of devices, such as through our EIP, and the offering of co-branded banking products, such as our T-Mobile Money debit card and T-Mobile Visa credit card, impact our regulatory compliance obligations. Failure to remain compliant with applicable regulations may increase our risk exposure in the following areas:
• consumer complaints and potential examinations or enforcement actions by federal and state regulatory agencies, including, but not limited to, the Consumer Financial Protection Bureau, state attorneys general, the FCC, and the FTC; and
• regulatory fines, penalties, enforcement actions, civil litigation, and/or class action lawsuits. Failure to comply with applicable regulations and the realization of any of these risks could have a material adverse effect on our business, financial condition, and operating results.
Our business may be impacted by new or amended tax laws or regulations or administrative interpretations and judicial decisions affecting the scope or application of tax laws or regulations.
We are subject to a wide variety of federal, state, and local taxes, fees, and regulatory charges. Tax laws and regulations are dynamic and subject to change through new legislation and evolving legislative, regulatory, administrative, and judicial interpretations. Changes in tax laws or their interpretation or enforcement could affect our tax rates, tax liabilities, and the carrying value of deferred tax assets or liabilities.
With respect to taxes on our products and services, we calculate, collect, and remit various federal, state, and local taxes, fees, and regulatory charges (“taxes”) to numerous governmental authorities, including sales taxes, Universal Service Fund contributions, common carrier regulatory charges, and public safety fees. Because many of our service plans are tax inclusive, increases in such taxes may adversely impact our business results.
In many cases, the application of existing, newly enacted, or amended tax laws may be uncertain and subject to different interpretations, especially when evaluated against new technologies and telecommunications services, such as broadband internet access and cloud-related services. Legislative changes, administrative interpretations, and judicial decisions affecting the scope or application of tax laws could also impact reported revenue and taxes due on tax inclusive plans. Additionally, failure to comply with any applicable tax laws could subject us to additional taxes, fines, penalties, or other adverse actions.
Our wireless licenses are subject to renewal and may be revoked in the event that we violate applicable laws.
Our existing wireless licenses are subject to renewal upon the expiration of the period for which they are granted. Our licenses have been granted with an expectation of renewal, and the FCC generally has approved our license renewal applications. However, the Communications Act provides that licenses may be revoked for cause and license renewal applications denied if the FCC determines that a renewal would not serve the public interest. If we fail to timely file to renew any wireless license or fail to meet any regulatory requirements for renewal, including construction and substantial service requirements, we could be denied a license renewal. Many of our wireless licenses are subject to interim or final construction requirements, and there is no guarantee that the FCC will find our construction, or the construction of prior licensees, sufficient to meet the build-out or renewal requirements. Accordingly, we cannot assure that the FCC will renew our wireless licenses upon their expiration. If any of our wireless licenses were to be revoked or not renewed upon expiration, we would not be permitted to provide services under that license, which could have a material adverse effect on our business, financial condition, and operating results.
Risks Related to Ownership of Our Common Stock
Our Certificate of Incorporation designates the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain actions and proceedings, which could limit the ability of our stockholders to obtain a judicial forum of their choice for disputes with the Company or its directors, officers, or employees.
Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for (i) any derivative action or proceeding brought on
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behalf of the Company, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer or employee of the Company to the Company or its stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or the Company's bylaws, or (iv) any other action asserting a claim arising under, in connection with, and governed by the internal affairs doctrine. This choice of forum provision does not waive our compliance with our obligations under the federal securities laws and the rules and regulations thereunder. Moreover, the provision does not apply to suits brought to enforce a duty or liability created by the Exchange Act or by the Securities Act of 1933, as amended.
This choice of forum provision may increase costs to bring a claim, discourageclaims, or limit a stockholder's ability to bring a claim in a judicial forum that the stockholder finds favorable for disputes with the Company or its directors, officers or employees, which may discourage such lawsuits against the Company and its directors, officers and employees, even though an action, if successful, might benefit our stockholders. Alternatively, if a court were to find the choice of forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such matters in other jurisdictions, which could increase our costs of litigation and adversely affect our business and financial condition.
DT controls a majority of the voting power of our common stock and the T-Mobile trademarks we utilize in our business and may have interests that differ from the interests of our other stockholders.
DT controls a majority of the voting power of our common stock and therefore we are a “controlled company,” as defined in the NASDAQ Stock Market LLC (“NASDAQ”) listing rules, and we are not subject to NASDAQ requirements that would otherwise require us to have a majority of independent directors, a nominating committee composed solely of independent directors or a compensation committee composed solely of independent directors. Accordingly, our stockholders will not be afforded the same protections as stockholders of other NASDAQ-listed companies generally receive with respect to corporate governance for so long as we rely on these exemptions from the corporate governance requirements.
In addition, pursuant to our Certificate of Incorporation and the Second Amended and Restated Stockholders’ Agreement, as long as DT beneficially owns 30% or more of our outstanding common stock, we are restricted from taking certain actions without DT’s prior written consent, including (i) incurring indebtedness above certain levels based on a specified debt to cash flow ratio, (ii) taking any action that would cause a default under any instrument evidencing indebtedness involving DT or its affiliates, (iii) acquiring or disposing of assets or entering into mergers or similar acquisitions in excess of $1.0 billion, (iv) changing the size of our Board of Directors, (v) subject to certain exceptions, issuing equity of 10% or more of the then-outstanding shares of our common stock, or issuing equity to redeem debt held by DT, (vi) repurchasing or redeeming equity securities or making any extraordinary or in-kind dividend other than on a pro rata basis, or (vii) making certain changes involving our CEO. We are also restricted from amending our Certificate of Incorporation and bylaws in any manner that could adversely affect DT’s rights under the Second Amended and Restated Stockholders’ Agreement for as long as DT beneficially owns 5% or more of our outstanding common stock. These restrictions could prevent us from taking actions that our Board of Directors might otherwise determine are in the best interests of the Company and our stockholders, or that may be in the best interests of our other stockholders.
DT effectively has control over all matters submitted to our stockholders for approval, including the election or removal of directors, changes to our Certificate of Incorporation, a sale or merger of our Company and other transactions requiring stockholder approval under Delaware law. DT’s controlling interest may have the effect of making it more difficult for a third party to acquire, or discouraging a third party from seeking to acquire, the Company and DT, as the controlling stockholder, may have strategic, financial, or other interests different from those of our other stockholders, including as the holder of a portion of our debt and as the counterparty in a number of commercial arrangements, and may make decisions adverse to the interests of our other stockholders.
In addition, we license certain trademarks from DT, including the right to use the trademark “T-Mobile” as a name for the Company and our flagship brand under a trademark license agreement, as amended, with DT. As described in more detail in our Proxy Statement on Schedule 14A filed with the SEC on April 18, 2025 under the heading “Transactions with Related Persons and Approval,” we are obligated to pay DT a royalty in an amount equal to 0.25% (the “royalty rate”) of the net revenue (as defined in the trademark license) generated by products and services sold by the Company under the licensed trademarks subject to a cap of $80 million per calendar year through December 31, 2028. We and DT are obligated to negotiate a new trademark license when (i) DT has 50% or less of the voting power of the outstanding shares of capital stock of the Company or (ii) any third party owns or controls, directly or indirectly, 50% or more of the voting power of the outstanding shares of capital stock of the Company, or otherwise has the power to direct or cause the direction of the management and policies of the Company. If we and DT fail to agree on a new trademark license, either we or DT may terminate the trademark license and such termination shall be effective, in the case of clause (i) above, on the third anniversary after a notice of termination and, in the case of clause (ii) above, on the second anniversary after a notice of termination. A further increase in the royalty rate or
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termination of the trademark license could have a material adverse effect on our business, financial condition, and operating results.
We cannot guarantee that our current and future stockholder return programs will be fully utilized or that they will enhance long-term stockholder value.
Our Board of Directors has authorized, and may from time to time authorize, stockholder return programs, consisting of repurchases of shares of our common stock, the payment of cash dividends, or both. The specific timing and amount of any share repurchases and any dividend payments under any stockholder return program will depend on prevailing share prices, general economic and market conditions, Company performance and other considerations, such as whether the Company determines that there are other uses for the funds currently authorized for the program that would be more advantageous for our business. In addition, the specific timing and amount of any dividend payments are subject to declaration on future dates by the Board of Directors in its sole discretion.
Any stockholder return program could impact our cash flows, affect the trading price of our common stock, and increase volatility. We cannot guarantee that any stockholder return program will be fully consummated or that it will enhance long-term stockholder value. Our current and future stockholder return programs do not, and will not, obligate the Company to acquire any particular amount of common stock or to declare and pay any particular amount of dividends, and any program may be suspended or discontinued at any time at the Company’s discretion. Any announcement of termination of any program may result in a decrease in the price of our common stock.
Future sales of our common stock by DT and foreign ownership limitations by the FCC could have a negative impact on our stock price and decrease the value of our stock.
We cannot predict the effect, if any, that market sales of shares of our common stock by DT will have on the prevailing trading price of our common stock. Sales of a substantial number of shares of our common stock could cause our stock price to decline.
We and DT are parties to the Second Amended and Restated Stockholders’ Agreement pursuant to which DT is free to transfer its shares in public sales without notice, as long as such transactions would not result in a third party owning more than 30% of the outstanding shares of our common stock. If a transfer were to exceed the 30% threshold, it would be prohibited unless the transfer were approved by our Board of Directors, or the transferee were to make a binding offer to purchase all of the other outstanding shares on the same price and terms. The Second Amended and Restated Stockholders’ Agreement does not otherwise impose any other restrictions on the sales of common stock by DT. Moreover, the Second Amended and Restated Stockholders’ Agreement generally requires us to cooperate with DT to facilitate the resale of our common stock or debt securities held by DT under shelf registration statements we have filed.
DT has incrementally sold limited amounts of shares of our common stock in the open market. Any additional sale of shares of our common stock by DT (other than in transactions involving the purchase of all of our outstanding shares) could significantly increase the number of shares available in the market, which could cause a decrease in our stock price. In addition, even if DT does not sell a large number of its shares into the market, their rights to transfer a large number of shares into the market could depress our stock price.
Furthermore, under existing law, no more than 20% of an FCC licensee’s capital stock may be directly owned, or no more than 25% indirectly owned, or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. If an FCC licensee is controlled by another entity, up to 25% of that entity’s capital stock may be owned or voted by non-U.S. citizens or their representatives, by a foreign government or its representatives or by a foreign corporation. Foreign ownership above the 25% holding company level may be allowed if the FCC finds such higher levels consistent with the public interest. The FCC has ruled that higher levels of foreign ownership, even up to 100%, are presumptively consistent with the public interest with respect to investors from certain nations. If our foreign ownership by previously unapproved foreign parties were to exceed the permitted level without further FCC authorization, the FCC could subject us to a range of penalties, including an order for us to divest the foreign ownership in part, fines, license revocation or denials of license renewals. If ownership of our common stock by an unapproved foreign entity were to become subject to such limitations, or if any ownership of our common stock violates any other rule or regulation of the FCC applicable to us, our Certificate of Incorporation provides for certain redemption provisions at a pre-determined price which may be less than fair market value. These limitations and our Certificate of Incorporation may limit our ability to attract additional equity financing outside the United States and decrease the value of our common stock.
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On May 23, 2025, we launched exchange offers (the “Exchange Offers”) for any and all of certain outstanding senior notes of UScellular for new notes of T-Mobile with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular. In conjunction with the Exchange Offers, we also solicited consents for each series of the outstanding senior notes of UScellular to effect a number of amendments to the applicable indenture under which each such series of notes were issued and are governed (the “Consent Solicitations”). The consummation of the Exchange Offers and Consent Solicitations were subject to the closing of the UScellular Acquisition (as defined below), which occurred on August 1, 2025.
On July 22, 2025, we entered into asset purchase agreements for the acquisition of substantially all of the wireless operations assets (together with UScellular’s wireless operations and select spectrum assets, the “UScellular Wireless Business”) of each of Farmers Cellular Telephone Company, Inc., Iowa RSA No. 9 Limited Partnership, and Iowa RSA No. 12 Limited Partnership (collectively, the “Iowa Entities”) for an aggregate purchase price of $175 million payable in cash. Prior to our acquisition of the Iowa Entities, UScellular held a minority interest in each of the Iowa Entities.
The UScellular Wireless Business offers a comprehensive range of wireless communications products and services. As a combined company, we expect to increase competition in the telecommunications industry, achieve synergies and enhance our rural 5G coverage with our combined network footprint. Following the closing of the transactions, UScellular and the Iowa Entities will retain ownership of their other spectrum licenses, as well as their towers.
On August 1, 2025, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals (the “UScellular Acquisition Date”), we completed the acquisition of the UScellular Wireless Business, and as a result, the UScellular Wireless Business became wholly owned by T-Mobile. In exchange, on the UScellular Acquisition Date, we transferred cash of $2.8 billion. Additionally, the closing of the UScellular Acquisition obligated us to execute the Exchange Offers. On August 5, 2025, we executed the Exchange Offers of certain senior notes of UScellular with an aggregate outstanding principal balance of $1.7 billion for T-Mobile notes with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular.
For more information regarding the UScellular Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
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UScellular Merger-Related Costs
Merger-related costs associated with the UScellular Acquisition to date include:
• Integration costs to achieveefficiencies in network, retail, information technology and back office operations and migrate customers to the T-Mobile network and billing systems;
• Restructuring costs, including contract terminations, severance and network decommissioning; and
• Transaction costs, including legal and professional services related to the completion of the UScellular Acquisition.
UScellular merger-related costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See “Adjusted EBITDA and Core Adjusted EBITDA” in the “ Performance Measures ” section of this MD&A. Net cash payments for UScellular merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Consolidated Statements of Cash Flows and our calculation of Adjusted Free Cash Flow.
UScellular merger-related costs are presented below:
(in millions)
Year Ended December 31,
Change
UScellular merger-related costs
Cost of services, exclusive of depreciation and amortization
Cost of equipment sales, exclusive of depreciation and amortization
Selling, general and administrative
Total UScellular merger-related costs
Net cash payments for UScellular merger-related costs
NM - Not meaningful
Anticipated Impacts
As a result of our UScellular Acquisition restructuring and integration activities, we expect to realize cost efficiencies by eliminating redundancies within our combined network as well as other business processes and operations. Upon completion of these activities, we expect to achieve total annual run rate cost synergies of $1.2 billion, consisting of $950 million in operating expenses and $250 million in capital expenditures, with costs to achieve expected to be approximately $2.6 billion.
Our restructuring and integration activities associated with the UScellular Acquisition are expected to occur over the next two years with substantially all costs incurred and associated cash payments made by the end of fiscal year 2027. We are evaluating additional restructuring initiatives associated with the UScellular Acquisition, which are dependent on consultations and negotiations with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the costs and related payments.
Acquisition of Vistar Media Inc.
On December 20, 2024, we entered into an agreement and plan of merger for the acquisition of 100% of the outstanding capital stock of Vistar Media Inc. (“Vistar”), a provider of technology solutions for digital-out-of-home advertisements (the “Vistar Acquisition”).
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on February 3, 2025 (the “Vistar Acquisition Date”), we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $621 million.
For more information regarding the Vistar Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
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Acquisition of Blis Holdco Limited
On February 18, 2025, we entered into a share purchase agreement for the acquisition of 100% of the outstanding capital stock of Blis Holdco Limited (“Blis”), a provider of advertising solutions (the “Blis Acquisition”).
Upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals, on March 3, 2025 (the “Blis Acquisition Date”), we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $180 million.
For more information regarding the Blis Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Acquisition of Ka’ena Corporation
On May 1, 2024 (the “Ka’ena Acquisition Date”), we completed the merger with Ka’ena Corporation and its subsidiaries, including, among others, Mint Mobile LLC (collectively, “Ka’ena”), and as a result, Ka’ena became a wholly owned subsidiary of T-Mobile (the “Ka’ena Acquisition”). The total purchase price consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable in the third quarter of 2026. On the Ka’ena Acquisition Date, and in satisfaction of the upfront payment, we transferred $420 million in cash and 3,264,952 shares of T-Mobile common stock valued at $536 million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $956 million. A portion of the upfront payment made on the Ka’ena Acquisition Date was for the settlement of the preexisting wholesale relationship with Ka’ena. The amount of the upfront payment was subject to customary adjustments, and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum payable in satisfaction of the earnout.
Based on the adjusted amount paid upfront, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.
Prior to the Ka’ena Acquisition, Ka’ena was a wholesale partner of the Company for which we recognized service revenues within Wholesale and other service revenues. Upon the closing of the Ka’ena Acquisition, this relationship was effectively terminated, and the Company acquired Ka’ena’s prepaid customer relationships and began to recognize service revenues associated with these customers within Prepaid revenues and operating expenses primarily within Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income subsequent to the Ka’ena Acquisition Date.
For more information regarding the Ka’ena Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Sprint Merger-Related Costs
Sprint Merger-related costs generally include:
• Integration costs to achieveefficiencies in network, retail, information technology and back office operations, migrate customers to the T-Mobile network and billing systems and the impact of legal matters assumed as part of the Merger;
• Restructuring costs, including severance, store rationalization and network decommissioning; and
• Transaction costs, including legal and professional services related to the completion of the transactions.
Sprint Merger-related costs have been excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA, which are non-GAAP financial measures, as we do not consider these costs to be reflective of our ongoing operating performance. See “Adjusted EBITDA and Core Adjusted EBITDA” in the “ Performance Measures ” section of this MD&A. Net cash payments for Sprint Merger-related costs, including payments related to our restructuring plan, are included in Net cash provided by operating activities on our Consolidated Statements of Cash Flows and our calculation of Adjusted Free Cash Flow.
During the year ended December 31, 2024, we recognized a gain for the $100 million extension fee previously paid by DISH associated with the DISH License Purchase Agreement (as defined in Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements) as a reduction to Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income. The gain was presented as a reduction in Merger-related costs and excluded from our calculations of Adjusted EBITDA and Core Adjusted EBITDA. See Note 7 –
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Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements for more information.
As of June 30, 2024, we have incurred substantially all restructuring and integration costs associated with the Sprint Merger and, accordingly, no longer separately disclose Sprint Merger-related costs. The cash payments for the Sprint Merger-related costs incurred extend beyond 2025 and primarily relate to operating leases for which we have recognized accelerated lease expense.
Sprint Merger-related costs are presented below:
(in millions)
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
$ Change
% Change
$ Change
% Change
Sprint Merger-related costs
Cost of services, exclusive of depreciation and amortization
Cost of equipment sales, exclusive of depreciation and amortization
Selling, general and administrative
Total Sprint Merger-related costs
Net cash payments for Sprint Merger-related costs
NM - Not meaningful
Joint Ventures
On April 24, 2024, we entered into a definitive agreement with a fund operated by EQT, EQT Infrastructure VI (“Fund VI”), to establish a joint venture between us and Fund VI to acquire Lumos (“Lumos”), a fiber-to-the-home platform, from EQT’s predecessor fund, EQT Infrastructure III. On April 1, 2025, we completed the joint acquisition of Lumos, upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. During the three months ended June 30, 2025, we invested $932 million to acquire a 50% equity interest in the joint venture and 97,000 fiber customers. The funds invested by us will be used by the joint venture to fund future fiber builds. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million between 2027 and 2028 under the existing business plan. Following the joint acquisition, Lumos transitioned to a wholesale model where we are the anchor tenant owning residential and small business customer relationships.
On July 18, 2024, we entered into a definitive agreement with KKR & Co. Inc. to establish a joint venture to acquire Metronet Holdings, LLC and certain of its affiliates (collectively, “Metronet”), a fiber-to-the-home platform. On July 24, 2025, we completed the joint acquisition of Metronet upon the completion of certain customary closing conditions, including the receipt of certain regulatory approvals. During the three months ended September 30, 2025, we invested $4.6 billion to acquire a 50% equity interest in the joint venture and 713,000 residential fiber customers. Following the joint acquisition, Metronet became a wholesale services provider, and its residential fiber retail operations and customers transitioned to us. We do not anticipate making further capital contributions under the existing business plan.
We account for the Lumos and Metronet joint ventures under the equity method of accounting with our proportionate share of earnings (losses) presented within Other (expense) income, net on our Consolidated Statements of Comprehensive Income. We recognize revenues for fiber customers and the related wholesale costs paid to the joint ventures for network access within Postpaid revenues and Cost of services, respectively, on our Consolidated Statements of Comprehensive Income.
The joint ventures will focus on market identification and selection, build plans, network engineering and design, network deployment and customer installation, with us owning customer relationships and selling fiber service under the T-Mobile brand.
For more information regarding the Lumos and Metronet joint ventures, see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements.
Network Restructuring Initiative
Recent technological advancements have enhanced our Customer-Driven Coverage insights, enabling us to identify, assess and shut down low customer value sites. In the fourth quarter of 2025, we began implementing restructuring initiatives to identify
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and realize these cost savings on our network, excluding activities associated with the UScellular Acquisition (the “Network Restructuring Initiative”). The major activities associated with the Network Restructuring Initiative include the rationalization of network and backhaul services and the decommissioning of cell sites and distributed antenna systems to reduce our overall network cost. Our Network Restructuring Initiative also includes the termination of certain of our operating leases for cell sites and switch sites.
Network Restructuring Initiative costs are presented below:
Year Ended
December 31, 2025
(in millions)
Network Restructuring Initiative
Cost of services, exclusive of depreciation and amortization
Depreciation and amortization
Total Network Restructuring Initiative costs
Our Network Restructuring Initiative is expected to occur over the next two years with a majority of costs incurred by the end of fiscal year 2026. We currently expect to incur between $500 million and $800 million of costs associated with the Network Restructuring Initiative.
We are evaluating additional restructuring activities associated with the Network Restructuring Initiative, which are dependent on consultations and negotiations with certain counterparties and the expected impact on our business operations, which could affect the amount or timing of the restructuring costs and related payments.
See Note 19 – Restructuring Costs of the Notes to the Consolidated Financial Statements for more information.
2025 Workforce Transformation
In the fourth quarter of 2025, we began implementing a restructuring initiative to streamline operations by centralizing leaders and teams, reducing organizational layers, and eliminating duplicative roles (the “2025 Workforce Transformation”). We intend to reinvest the expected cost savings from the 2025 Workforce Transformation into the business, including into our digital transformation initiatives.
During the year ended December 31, 2025, we recorded a pre-tax charge of $390 million, related to the 2025 Workforce Transformation, which is included in Cost of services and Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income. We have incurred a majority of the costs associated with our 2025 Workforce Transformation initiative, with the remaining costs of approximately $150 million expected to be substantially incurred by the end of the first quarter of 2026. We expect substantially all associated employee separations and related cash outflows to occur in 2026.
See Note 19 – Restructuring Costs of the Notes to the Consolidated Financial Statements for more information.
2023 Workforce Reduction
In August 2023, we implemented an initiative to reduce the size of our workforce by approximately 5,000 positions, just under 7% of our total employee base, primarily in corporate and back-office functions, and some technology roles.
During the year ended December 31, 2023, we recorded a pre-tax charge of $462 million, related to the 2023 Workforce Transformation, which is included in Cost of services and Selling, general and administrative expenses on our Consolidated Statements of Comprehensive Income.
See Note 19 – Restructuring Costs of the Notes to the Consolidated Financial Statements for more information.
One Big Beautiful Bill Act
On July 4, 2025, President Trump signed the One Big Beautiful Bill Act (the “OBBBA”) into law. The OBBBA includes numerous changes to existing tax law, including provisions providing current deductibility of certain property additions, limitations on interest deductions based on a tax EBITDA framework, and current deductibility of domestic research and development costs. These provisions were generally effective beginning in 2025 and did not have a material impact on our income tax payments or effective tax rate for the year ended December 31, 2025. We currently anticipate they will partially
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defer our income tax payments and will not have a material impact on our effective tax rate in future years. Management continues to review the OBBBA tax provisions to assess impacts to our consolidated financial statements.
Revenue Trends
In 2026, we expect Postpaid service revenues to continue to grow, primarily due to continued postpaid account and customer growth as well as postpaid Average Revenue per Account (“ARPA”) growth driven by the execution of our strategy to continuously deepen our account relationships, including growth in broadband. We expect Wholesale and other service revenues to remain relatively flat to slightly up, primarily from an increase in advertising revenues, offset by lower MVNO revenues, including lower EchoStar and TracFone MVNO revenues.
Operating Expense Trends
In 2026, we expect Total operating expenses to increase, primarily driven by higher Depreciation and amortization from assets placed into service associated with our continued build-out of our nationwide 5G network, a s well as higher Cost of equipment sales, driven by higher expected unit sales from a growing customer base and higher Cost of services and Selling, general and administrative expenses, including from the result of our recently closed UScellular Acquisition.
Macroeconomic Trends
Macroeconomic trends may result in adverse impacts on our business, and we continue to monitor these potential impacts, including potential economic recession, changes in the Federal Reserve’s monetary policy, as well as geopolitical risks, including the Ukraine-Russia and Israel-Hamas wars and further escalations thereof. Such scenarios and uncertainties may affect, among others, expected credit loss activity as well as certain fair value estimates.
To date, price inflation has not had a significant impact on our operations as we have fixed rates established through long-term contracts for many of our most significant costs, including for many of our tower agreements and backhaul contracts. Similarly, our exposure to the impact of fluctuating interest rates is limited, primarily to any new debt issuances or draws on our Revolving Credit Facility (as defined below), as interest is paid on our Senior Notes at a fixed rate. We continue to monitor the impact of these trends on the payment performance of our customers.
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Results of Operations
Set forth below is a summary of our consolidated financial results:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in millions)
$ Change
% Change
$ Change
% Change
Revenues
Postpaid revenues
Prepaid revenues
Wholesale and other service revenues
Total service revenues
Equipment revenues
Other revenues
Total revenues
Operating expenses
Cost of services, exclusive of depreciation and amortization shown separately below
Cost of equipment sales, exclusive of depreciation and amortization shown separately below
Selling, general and administrative
Impairment expense
Gain on disposal group held for sale
Depreciation and amortization
Total operating expenses
Operating income
Other expense, net
Interest expense, net
Other (expense) income, net
Total other expense, net
Income before income taxes
Income tax expense
Net income
Statement of Cash Flows Data
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Non-GAAP Financial Measures
Adjusted EBITDA
Core Adjusted EBITDA
Adjusted Free Cash Flow
NM - Not meaningful
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The following discussion and analysis is for the year ended December 31, 2025, compared to the same period in 2024, unless otherwise stated. For a discussion and analysis of the year ended December 31, 2024, compared to the same period in 2023, please refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on January 31, 2025.
Total revenues increased $6.9 billion, or 8%. The components of these changes are discussed below.
Postpaid revenues increased $5.6 billion, or 11%, primarily from:
• Higher average postpaid accounts, including following the acquisitions of UScellular, Metronet and Lumos; and
• Higher postpaid ARPA. See “Postpaid ARPA” in the “ Performance Measures ” section of this MD&A.
Prepaid revenues increased $98 million, or 1%, primarily from:
• Higher average prepaid customers, primarily from the prepaid customers acquired through the Ka’ena Acquisition; partially offset by
• Lower prepaid ARPU. See “Prepaid ARPU” in the “ Performance Measures ” section of this MD&A.
Wholesale and other service revenues decreased $562 million, or 16%, primarily from:
• Lower MVNO revenues, including lower EchoStar and TracFone MVNO revenues and the impact from the Ka’ena Acquisition; and
• Lower Affordable Connectivity Program revenues; partially offset by
• Higher advertising revenues, primarily from the acquisitions of Vistar and Blis.
Equipment revenues increased $1.7 billion, or 12%, primarily from:
• An increase in device sales revenue, primarily from:
• Higher average revenue per device sold, net of promotions, primarily driven by an increase in the high-end phone mix; and
• A higher number of devices sold, primarily driven by higher postpaid upgrades and following the UScellular Acquisition, partially offset by lower Assurance Wireless devices; and
• An increase in liquidation revenue, primarily due to a higher number of liquidated devices.
Other revenues were essentially flat.
Total operating expenses increased $6.6 billion, or 10%. The components of this change are discussed below.
Cost of services , exclusive of depreciation and amortization, increased $726 million, or 7% primarily from:
• Higher costs following the acquisition of the UScellular Wireless Business;
• Wholesale network access costs and amortization of customer installation fees paid to Metronet and Lumos;
• $111 million of severance and related costs associated with the 2025 Workforce Transformation;
• Higher third-party costs primarily due to higher subscribers and the launch of T-Satellite; and
• Network Restructuring Initiative costs.
Cost of equipment sales , exclusive of depreciation and amortization, increased $2.4 billion, or 13%, primarily from:
• An increase in device cost of equipment sales, primarily from:
• Higher average cost per device sold, primarily driven by an increase in the high-end phone mix; and
• A higher number of devices sold, primarily driven by higher postpaid upgrades and following the acquisition of the UScellular Wireless Business, partially offset by lower Assurance Wireless devices; and
• An increase in liquidation costs, primarily due to a higher number of liquidated devices.
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Selling, general and administrative expenses increased $2.7 billion, or 13%, primarily from:
• Higher personnel-related costs, including payroll and benefits;
• Higher advertising expenses;
• Higher costs following the UScellular Acquisition, including merger-related costs;
• Prior year recognition of $202 million of gains associated with the closing of certain spectrum exchange transactions, $105 million of legal-related insurance recoveries and a $100 million gain for the extension fee previously paid by DISH associated with the license purchase agreement for 800 MHz spectrum licenses, which was not purchased;
• $279 million of severance and related costs associated with the 2025 Workforce Transformation; and
• Higher bad debt expense driven by higher customers and device sales, including following the UScellular Acquisition; partially offset by
• A $151 million gain recognized in the current year related to the completed sale of a portion of our 3.45 GHz spectrum licenses.
Impairment expense was $278 million for the year ended December 31, 2025, due to the impairment of capitalized software development costs related to our billing system. See Note 6 – Property and Equipment of the Notes to the Consolidated Financial Statements for additional information.
Depreciation and amortization increased $589 million, or 5%, primarily from:
• Higher depreciation expense from assets acquired in the UScellular Acquisition and the continued build-out of our nationwide 5G network;
• Higher amortization of capitalized software driven by increased in-service software related to our ongoing digital transformation initiatives; and
• Higher amortization from intangible assets acquired through our acquisitions in the current year; partially offset by
• The acceleration of depreciation for certain technology assets in the prior year.
Operating income , the components of which are discussed above, increased $269 million, or 1%.
Interest expense, net increased $363 million, or 11%, primarily from higher interest expense due to higher average debt outstanding and a higher average effective interest rate.
Other (expense) income, net changed $337 million, from other net income of $113 million for the year ended December 31, 2024, to other net expense of $224 million for the year ended December 31, 2025, primarily from:
• Our proportionate share of losses from the Lumos and Metronet joint ventures recognized during the current year; and
• Prior year recognition of an $80 million gain, associated with the partial settlement of the Sprint Retirement Pension Plan retiree obligations. See Note 13 – Employee Compensation and Benefit Plans of the Notes to the Consolidated Financial Statements for additional information.
Income before income taxes , the components of which are discussed above, was $14.3 billion and $14.7 billion for the years ended December 31, 2025 and 2024, respectively.
Income tax expense decreased $84 million, or 2%, primarily from:
• Lower income before income taxes; and
• An increase in excess tax benefits related to the vesting of restricted stock awards; partially offset by
• Net tax benefits recognized in the prior year from adjustments to certain tax reserves.
Our effective tax rate was 23.0% and 22.9% for the years ended December 31, 2025 and 2024, respectively.
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Net income , the components of which are discussed above, was $11.0 billion and $11.3 billion for the years ended December 31, 2025 and 2024, respectively. Net income for the year ended December 31, 2025 included:
• Severance and related costs associated with the 2025 Workforce Transformation of $293 million, net of tax; and
• Impairment expense related to certain capitalized software development costs related to our billing system of $208 million, net of tax.
Guarantor Financial Information
Pursuant to the applicable indentures and supplemental indentures, the Senior Notes to affiliates and third parties issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation (collectively, the “Issuers”) are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by T-Mobile (“Parent”) and certain of Parent’s 100% owned subsidiaries (“Guarantor Subsidiaries”).
The guarantees of the Guarantor Subsidiaries are subject to release in limited circumstances only upon the occurrence of certain customary conditions. Generally, the guarantees of the Guarantor Subsidiaries with respect to the Senior Notes issued by T-Mobile USA, Inc. (other than $3.5 billion in principal amount of Senior Notes issued in 2017 and 2018) and the credit agreement entered into by T-Mobile USA, Inc. will be automatically and unconditionally released if, immediately following such release and any concurrent releases of other guarantees, the aggregate principal amount of indebtedness of non-guarantor subsidiaries (other than certain specified subsidiaries) would not exceed $2.0 billion. The indentures, supplemental indentures and credit agreements governing the long-term debt contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and to merge, consolidate or sell, or otherwise dispose of, substantially all of their assets.
Basis of Presentation
The following tables include summarized financial information of the obligor groups of debt issued by T-Mobile USA, Inc., Sprint and Sprint Capital Corporation. The summarized financial information of each obligor group is presented on a combined basis with balances and transactions within the obligor group eliminated. Investments in and the equity in earnings of non-guarantor subsidiaries, which would otherwise be consolidated in accordance with GAAP, are excluded from the below summarized financial information pursuant to SEC Regulation S-X Rule 13-01.
The summarized balance sheet information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:
(in millions)
December 31, 2025
December 31, 2024
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Due to non-guarantors
Due to related parties
The summarized results of operations information for the consolidated obligor group of debt issued by T-Mobile USA, Inc. is presented in the table below:
(in millions)
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Total revenues
Operating income
Net income
Revenue from non-guarantors
Operating expenses to non-guarantors
Other income (expense) to non-guarantors
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The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions)
December 31, 2025
December 31, 2024
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Due to non-guarantors (1)
Due to related parties
(1) The decrease in Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the year ended December 31, 2025.
The summarized results of operations information for the consolidated obligor group of debt issued by Sprint is presented in the table below:
(in millions)
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Total revenues
Operating loss
Net loss
Other expense, net, to non-guarantors
The summarized balance sheet information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:
(in millions)
December 31, 2025
December 31, 2024
Current assets
Noncurrent assets
Current liabilities
Noncurrent liabilities
Due to non-guarantors (1)
Due to related parties
(1) The decrease in Due to non-guarantors was primarily driven by the impact of certain intercompany settlements during the year ended December 31, 2025.
The summarized results of operations information for the consolidated obligor group of debt issued by Sprint Capital Corporation is presented in the table below:
(in millions)
Year Ended
December 31, 2025
Year Ended
December 31, 2024
Total revenues
Operating loss
Net loss
Other expense, net, to non-guarantors
Performance Measures
In managing our business and assessing financial performance, we supplement the information provided by our consolidated financial statements with other operating or statistical data and non-GAAP financial measures. These operating and financial measures are utilized by our management to evaluate our operating performance and, in certain cases, our ability to meet liquidity requirements. Although companies in the telecommunications industry may not define each of these measures in precisely the same way, we believe that these measures facilitate comparisons with other companies in the industry on key operating and financial measures.
Starting with the three months ending March 31, 2026, we will shift away from reporting total customers, including total postpaid, postpaid phone, prepaid, and broadband customers, to better align with the Company’s long-held priority on growing high-value accounts, which management believes is the best reflection of value creation versus customers. Correspondingly, with this shift, we will no longer report postpaid phone ARPU and prepaid ARPU.
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Postpaid Accounts
A postpaid account is generally defined as a billing account number that generates revenue. Postpaid accounts generally consist of customers that are qualified for postpaid service utilizing phones, 5G broadband gateways, fiber connections, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service.
The following table sets forth the number of ending postpaid accounts:
As of December 31,
2025 Versus 2024
2024 Versus 2023
(in thousands)
# Change
% Change
# Change
% Change
Postpaid accounts (1) (2) (3)
(1) In the third quarter of 2025, we acquired 1,448,000 postpaid accounts through the UScellular Acquisition, which includes the impact of certain base adjustments to align the policies of UScellular and T-Mobile.
(2) In the third quarter of 2025, we acquired 633,000 postpaid accounts from Metronet and other acquisitions.
(3) In the second quarter of 2025, we acquired 85,000 postpaid accounts from Lumos.
Postpaid Net Account Additions
The following table sets forth the number of postpaid net account additions:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in thousands)
# Change
% Change
# Change
% Change
Postpaid net account additions
Postpaid net account additions increased 83,000, or 8%, for the year ended December 31, 2025, primarily from:
• Higher gross account additions, including fiber account additions following the acquisitions of Metronet and Lumos; partially offset by
• Higher account deactivations, including the impact from a growing account base; and
• The temporary impact of current year rate plan optimizations.
Customers
A customer is generally defined as a SIM number with a unique T-Mobile identifier that is associated with an account that generates revenue. Customers are qualified either for postpaid service utilizing phones, 5G broadband gateways, fiber connections, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT), where they generally pay after receiving service, or prepaid service, where they generally pay in advance of receiving service.
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The following table sets forth the number of ending customers:
As of December 31,
2025 Versus 2024
2024 Versus 2023
(in thousands)
# Change
% Change
# Change
% Change
Customers, end of period
Postpaid phone customers (1)
Postpaid other customers (1) (2) (3)
Total postpaid customers
Prepaid customers (1) (4)
Total customers
Adjustments to customers (1) (2) (3) (4) (5)
(1) In the third quarter of 2025, we acquired 3,287,000 postpaid phone customers, 390,000 postpaid other customers, including 141,000 5G broadband customers, and 349,000 prepaid customers through the UScellular Acquisition, which includes the impact of certain base adjustments to align the policies of UScellular and T-Mobile.
(2) In the third quarter of 2025, we acquired 755,000 fiber customers from Metronet and other acquisitions.
(3) In the second quarter of 2025, we acquired 97,000 fiber customers from Lumos.
(4) In the second quarter of 2024, we acquired 3,504,000 prepaid customers through the Ka’ena Acquisition, which includes the impact of certain base adjustments to align the policies of Ka’ena and T-Mobile.
(5) In the fourth quarter of 2023, we recognized a base adjustment to increase postpaid phone customers by 20,000 and increase postpaid other customers by 150,000 due to fewer customers than expected whose service was deactivated as a result of the network shutdowns.
NM - Not meaningful
5G broadband customers included in Postpaid other customers were 7,602,000 and 5,742,000 as of December 31, 2025 and 2024, respectively. 5G broadband customers included in Prepaid customers were 848,000 and 688,000 as of December 31, 2025 and 2024, respectively. Fiber customers included in Postpaid other customers were 997,000 as of December 31, 2025.
Net Customer Additions
The following table sets forth the number of net customer additions:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in thousands)
# Change
% Change
# Change
% Change
Net customer additions
Postpaid phone customers
Postpaid other customers
Total postpaid customers
Prepaid customers
Total net customer additions
Adjustments to customers (1) (2) (3) (4) (5)
(1) In the third quarter of 2025, we acquired 3,287,000 postpaid phone customers, 390,000 postpaid other customers, including 141,000 5G broadband customers, and 349,000 prepaid customers through the UScellular Acquisition, which includes the impact of certain base adjustments to align the policies of UScellular and T-Mobile.
(2) In the third quarter of 2025, we acquired 755,000 fiber customers from Metronet and other acquisitions.
(3) In the second quarter of 2025, we acquired 97,000 fiber customers from Lumos.
(4) In the second quarter of 2024, we acquired 3,504,000 prepaid customers through the Ka’ena Acquisition, which includes the impact of certain base adjustments to align the policies of Ka’ena and T-Mobile.
(5) In the fourth quarter of 2023, we recognized a base adjustment to increase postpaid phone customers by 20,000 and increase postpaid other customers by 150,000 due to fewer customers than expected whose service was deactivated as a result of the network shutdowns.
NM - Not meaningful
Total net customer additions increased 1,658,000, or 26%, primarily from:
• Higher postpaid other net customer additions, primarily due to
• Higher net additions from mobile internet devices, including success from business customers and higher prior year deactivations of lower ARPU mobile internet devices in the educational sector activated during the COVID-19 pandemic and no longer needed;
• Higher broadband net additions; and
• Higher net additions from other connected devices; partially offset by
• Lower net additions from wearables; and
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• Higher postpaid phone net customer additions, primarily from higher gross additions, partially offset by higher churn and increased deactivations from a growing customer base; partially offset by
• Lower prepaid net customer additions, primarily from increased deactivations from a growing customer base, primarily due to the Ka’ena Acquisition, and higher prepaid to postpaid migrations, partially offset by higher gross additions.
• 5G broadband net customer additions included in postpaid other net customer additions were 1,719,000 and 1,454,000 for the years ended December 31, 2025 and 2024, respectively. 5G broadband net customer additions included in prepaid net customer additions were 160,000 and 200,000 for the years ended December 31, 2025 and 2024, respectively.
• Fiber net customer additions included in postpaid other net customer additions were 136,000 for the year ended December 31, 2025.
Churn
Churn represents the number of customers whose service was deactivated as a percentage of the average number of customers during the specified period further divided by the number of months in the period. The number of customers whose service was deactivated is presented net of customers that subsequently had their service restored within a certain period of time and excludes customers who received service for less than a certain minimum period of time. We believe that churn provides management, investors and analysts with useful information to evaluate customer retention and loyalty.
The following table sets forth the churn:
Year Ended December 31,
Bps Change 2025 Versus 2024
Bps Change 2024 Versus 2023
Postpaid phone churn
7 bps
-1 bps
Prepaid churn
-1 bps
-3 bps
Postpaid phone churn increased 7 basis points, primarily due to higher industry switching and from the temporary impact of current year rate plan optimizations. Prepaid churn decreased slightly.
Postpaid Average Revenue Per Account
Postpaid Average Revenue per Account (“ARPA”) represents the average monthly postpaid service revenue earned per account. Postpaid ARPA is calculated as Postpaid revenues for the specified period divided by the average number of postpaid accounts during the period, further divided by the number of months in the period. We believe postpaid ARPA provides management, investors and analysts with useful information to assess and evaluate our postpaid service revenue realization and assists in forecasting our future postpaid service revenues on a per account basis. We consider postpaid ARPA to be indicative of our revenue growth potential given the increase in the average number of postpaid phone customers per account and increases in postpaid other customers, including 5G broadband, fiber, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT).
The following table sets forth our operating measure ARPA:
(in dollars)
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
$ Change
% Change
$ Change
% Change
Postpaid ARPA
Postpaid ARPA increased $5.12, or 4%, primarily from:
• The positive impact from rate plan optimizations and higher fee revenue, including from the adoption of new tax and fee exclusive plans;
• An increase in customers per account, including from the continued adoption of 5G broadband and continued growth of T-Mobile for Business customers, partially offset by fiber and UScellular accounts with fewer customers per account; and
• Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; partially offset by
• Increased promotional activity, including the success of bundled offerings.
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Average Revenue Per User
Average Revenue per User (“ARPU”) represents the average monthly service revenue earned per customer. ARPU is calculated as service revenues for the specified period divided by the average number of customers during the period, further divided by the number of months in the period. We believe ARPU provides management, investors and analysts with useful information to assess and evaluate our service revenue per customer and assist in forecasting our future service revenues generated from our customer base. Postpaid phone ARPU excludes postpaid other customers and related revenues, which include 5G broadband, fiber, mobile internet devices (including tablets and hotspots), wearables, DIGITS and other connected devices (including SyncUP and IoT).
The following table sets forth our operating measure ARPU:
(in dollars)
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
$ Change
% Change
$ Change
% Change
Postpaid phone ARPU
Prepaid ARPU
Postpaid Phone ARPU
Postpaid phone ARPU increased $1.02, or 2%, primarily from:
• The positive impact from rate plan optimizations and higher fee revenue, including from the adoption of new tax and fee exclusive plans;
• Higher premium services, primarily high-end rate plans, net of contra revenues for content included in such plans, and discounts for specific affinity groups, such as 55+, military and first responders; partially offset by continued growth in T-Mobile for Business customers with lower ARPU given larger account sizes; and
• The impact of customers acquired in the UScellular Acquisition, which have slightly higher ARPU; partially offset by
• Increased promotional activity, including the success of bundled offerings.
Prepaid ARPU
Prepaid ARPU decreased $1.92, or 5%, primarily from the inclusion of lower ARPU prepaid customers associated with the Ka’ena Acquisition and dilution from promotional activity and rate plan mix.
Adjusted EBITDA and Core Adjusted EBITDA
Adjusted EBITDA represents earnings before Interest expense, net of Interest income, Income tax expense, Depreciation and amortization, stock-based compensation and certain expenses, gains and losses, which are not reflective of our ongoing operating performance (“Special Items”). Special Items include Sprint Merger-related costs and UScellular merger-related costs (collectively, “Merger-related costs”), costs associated with our Network Restructuring Initiative, certain legal-related expenses and recoveries, Impairment expense, restructuring costs not directly attributable to the Sprint Merger or UScellular Acquisition (including severance), and other non-core gains and losses. Core Adjusted EBITDA represents Adjusted EBITDA less device lease revenues. Adjusted EBITDA margin represents Adjusted EBITDA divided by Service revenues. Core Adjusted EBITDA margin represents Core Adjusted EBITDA divided by Service revenues.
Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted EBITDA margin are non-GAAP financial measures utilized by our management, including our chief operating decision maker, to monitor the financial performance of our operations and allocate resources of the Company as a whole. We historically used Adjusted EBITDA, and we currently use Core Adjusted EBITDA internally as a measure to evaluate and compensate our personnel and management for their performance. We use Adjusted EBITDA and Core Adjusted EBITDA as benchmarks to evaluate our operating performance in comparison to our competitors. Management believes analysts and investors use Adjusted EBITDA and Core Adjusted EBITDA as supplemental measures to evaluate overall operating performance and to facilitate comparisons with other wireless communications and broadband services companies because they are indicative of our ongoing operating performance and trends by excluding the impact of interest expense from financing, non-cash depreciation and amortization from capital investments, non-cash stock-based compensation, and Special Items. Management believes analysts and investors use Core Adjusted EBITDA because it normalizes for the transition in the Company’s device financing strategy, by excluding the impact of device lease revenues from Adjusted EBITDA, to align with the exclusion of the related depreciation expense on leased devices from Adjusted EBITDA. Adjusted EBITDA, Adjusted EBITDA margin, Core Adjusted EBITDA and Core Adjusted
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EBITDA margin have limitations as analytical tools and should not be considered in isolation or as substitutes for income from operations, net income or any other measure of financial performance reported in accordance with GAAP.
The following table illustrates the calculation of Adjusted EBITDA and Core Adjusted EBITDA and reconciles Adjusted EBITDA and Core Adjusted EBITDA to Net income, which we consider to be the most directly comparable GAAP financial measure:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in millions, except percentages)
$ Change
% Change
$ Change
% Change
Net income
Adjustments:
Interest expense, net
Other expense (income), net
Income tax expense
Operating income
Depreciation and amortization
Stock-based compensation (1)
Merger-related costs, net (2)
Network Restructuring Initiative costs
Legal-related expenses (recoveries), net (3)
Impairment expense
Gain on disposal group held for sale
Other, net (4)
Adjusted EBITDA
Lease revenues
Core Adjusted EBITDA
Net income margin (Net income divided by Service revenues)
-200 bps
400 bps
Adjusted EBITDA margin (Adjusted EBITDA divided by Service revenues)
— bps
100 bps
Core Adjusted EBITDA margin (Core Adjusted EBITDA divided by Service revenues)
— bps
200 bps
(1) Stock-based compensation includes payroll tax impacts and may not agree with stock-based compensation expense on the consolidated financial statements. Additionally, certain stock-based compensation expenses associated with the Sprint Merger have been included in Merger-related costs, net.
(2) Merger-related costs, net, for the year ended December 31, 2024, includes the $100 million gain recognized for the extension fee previously paid by DISH associated with the DISH License Purchase Agreement.
(3) Legal-related expenses (recoveries), net, consists of the settlement of certain litigation and compliance costs associated with the August 2021 cyberattack and is presented net of insurance recoveries.
(4) Other, net, primarily consists of certain severance, restructuring and other expenses, gains and losses, not directly attributable to the Sprint Merger or UScellular Acquisition, which are not reflective of T-Mobile’s ongoing core business activities and are, therefore, excluded from Adjusted EBITDA and Core Adjusted EBITDA. Other, net, for the year ended December 31, 2025, includes $390 million of severance and related costs associated with the 2025 Workforce Transformation. Other, net, for the year ended December 31, 2023, includes $462 million of severance and related costs associated with the 2023 Workforce Reduction.
NM - Not meaningful
Core Adjusted EBITDA increased $2.2 billion, or 7%, for the year ended December 31, 2025. The components comprising Core Adjusted EBITDA are discussed further above.
The increase was primarily from:
• Higher Total service revenues; and
• Higher Equipment revenues, excluding Lease revenues; partially offset by
• Higher Cost of equipment sales, excluding Special Items;
• Higher Selling, general and administrative expenses, excluding Special Items; and
• Higher Cost of services, excluding Special Items.
Adjusted EBITDA increased $2.1 billion, or 7%, for the year ended December 31, 2025, primarily due to the fluctuations in Core Adjusted EBITDA, discussed above, partially offset by lower lease revenues, which decreased $80 million for the year ended December 31, 2025.
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Liquidity and Capital Resources
Our principal sources of liquidity are our cash and cash equivalents and cash generated from operations, proceeds from issuance of debt, financing leases, the sale of certain receivables, the Revolving Credit Facility (as defined below) and an unsecured short-term commercial paper program. Further, the incurrence of additional indebtedness may inhibit our ability to incur new debt in the future to finance our business strategy under the terms governing our existing and future indebtedness.
Cash Flows
The following is a condensed schedule of our cash flows:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in millions)
$ Change
% Change
$ Change
% Change
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Operating Activities
Net cash provided by operating activities increased $5.7 billion, or 25%, primarily from:
• A $4.6 billion decrease in net cash outflows from changes in working capital, primarily due to lower use of cash from Accounts payable and accrued liabilities, Accounts receivable, Short- and long-term operating lease liabilities and Other current and long-term liabilities, partially offset by higher use of cash from Other current and long-term assets, Inventory, and Equipment installment plan receivables; and
• A $1.0 billion increase in Net income, adjusted for non-cash income and expenses.
• Net cash provided by operating activities includes the impact of the Pledge Amendments as described below.
• Net cash provided by operating activities includes the impact of $358 million and $789 million in net payments for Merger-related costs for the years ended December 31, 2025 and 2024, respectively.
Investing Activities
Net cash used in investing activities increased $8.5 billion, or 94%. The use of cash was primarily from:
• $10.0 billion in Purchases of property and equipment, including capitalized interest, from the continued build-out of our nationwide 5G network, including increased greenfield site builds, and incremental capital expenditures following the acquisition of UScellular;
• $4.1 billion in Investments in unconsolidated affiliates, net, primarily from the joint acquisitions of Metronet and Lumos;
• $3.5 billion of cash consideration, net of cash acquired, related to our acquisitions of UScellular, Vistar and Blis; and
• $2.6 billion in purchases of spectrum and intangible assets, including the fiber customers purchased from Metronet and Lumos (see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements) and remaining 600 MHz spectrum licenses purchased from Channel 51 License Co LLC and LB License Co, LLC (see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements) ; partially offset by
• $2.2 billion in Proceeds from the sale of property, equipment and intangible assets, primarily from the sale of a portion of the 3.45 GHz licenses to N77 License Co LLC (see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements).
Financing Activities
Net cash used in financing activities decreased $2.7 billion, or 21%. The use of cash was primarily from:
• $10.0 billion in Repurchases of common stock;
• $6.2 billion in Repayments of long-term debt;
• $4.1 billion in Dividends on common stock;
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• $1.3 billion in Repayments of financing lease obligations; and
• $434 million in Tax withholdings on share-based awards; partially offset by
• $12.0 billion in Proceeds from issuance of long-term debt, net.
Cash and Cash Equivalents
As of December 31, 2025, our Cash and cash equivalents were $5.6 billion compared to $5.4 billion at December 31, 2024.
Adjusted Free Cash Flow
Adjusted Free Cash Flow represents Net cash provided by operating activities less cash payments for Purchases of property and equipment, plus Proceeds from sales of tower sites and Proceeds related to beneficial interests in securitization transactions. Adjusted Free Cash Flow is a non-GAAP financial measure utilized by management, investors and analysts of our financial information to evaluate cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business. Adjusted Free Cash Flow margin is calculated as Adjusted Free Cash Flow divided by Service revenues. Adjusted Free Cash Flow margin is utilized by management, investors, and analysts to evaluate the Company’s ability to convert service revenue efficiently into cash available to pay debt, repurchase shares, pay dividends and provide further investment in the business.
The table below provides a reconciliation of Adjusted Free Cash Flow to Net cash provided by operating activities, which we consider to be the most directly comparable GAAP financial measure:
Year Ended December 31,
2025 Versus 2024
2024 Versus 2023
(in millions, except percentages)
$ Change
% Change
$ Change
% Change
Net cash provided by operating activities
Cash purchases of property and equipment, including capitalized interest
Proceeds from sales of tower sites
Proceeds related to beneficial interests in securitization transactions
Adjusted Free Cash Flow
Net cash provided by operating activities margin (Net cash provided by operating activities divided by Service revenues)
500 bps
500 bps
Adjusted Free Cash Flow margin (Adjusted Free Cash Flow divided by Service revenues)
-100 bps
500 bps
NM - Not meaningful
Adjusted Free Cash Flow increased $963 million, or 6%, for the year ended December 31, 2025, primarily from.
• Higher Net cash provided by operating activities, as described above; partially offset by
• Higher Cash purchases of property and equipment, including capitalized interest, driven by planned timing of capital purchases, including for increased greenfield site builds and incremental capital expenditures following the acquisition of the UScellular Wireless Business.
• Certain cash proceeds associated with the sale of receivables, which were recognized within investing cash flows before November 1, 2024, are recognized as operating cash flows. This change had no net impact to Adjusted Free Cash Flow.
• Adjusted Free Cash Flow includes the impact of $358 million and $789 million in net payments for Merger-related costs for the years ended December 31, 2025 and 2024, respectively.
During the years ended December 31, 2025 and 2024, there were no significant net cash proceeds from securitization.
On October 22, 2024, we executed amendments (the “Pledge Amendments”) to the EIP Sale Arrangement and the Service Receivable Sale Arrangement (as discussed in Note 5 – Sales of Certain Receivables of the Notes to the Consolidated Financial Statements). Following the effective date of the Pledge Amendments of November 1, 2024, all cash proceeds associated with the sale of such receivables, a portion of which, prior to November 1, 2024, were recognized as Proceeds related to beneficial interests in securitization transactions within Net cash used in investing activities on our Consolidated Statements of Cash Flows, were recognized as operating cash flows. The Pledge Amendments did not have a net impact on Adjusted Free Cash Flow.
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Borrowing Capacity
We maintain a revolving credit facility (the “Revolving Credit Facility”) with an aggregate commitment amount of $7.5 billion. As of December 31, 2025, there was no outstanding balance under the Revolving Credit Facility.
Subsequent to December 31, 2025, on January 5, 2026, we entered into a Second Amended and Restated Credit Agreement, which among other things, increased the aggregate commitment amount of the Revolving Credit Facility to $10.0 billion. See Note 9 – Debt of the Notes to the Consolidated Financial Statements for more information regarding the Second Amended and Restated Credit Agreement.
We maintain an unsecured short-term commercial paper program with the ability to borrow up to $2.0 billion from time to time. This program supplements our other available external financing arrangements and proceeds are expected to be used for general corporate purposes. As of December 31, 2025, there was no outstanding balance under this program.
Debt Financing
On January 31, 2025, we entered into a credit agreement with certain financial institutions, backed by an Export Credit Agency (“ECA Facility”), providing for a loan of up to $1.0 billion (the “ECA Facility due March 2036”). On March 17, 2025, we drew down the full $1.0 billion available under the ECA Facility due March 2036 and recognized the net proceeds within Proceeds from issuance of long-term debt, net on our Consolidated Statements of Cash Flows.
On August 29, 2025, we entered into an ECA Facility, providing for a loan of up to $1.0 billion (the “ECA Facility due November 2036”). During the fourth quarter of 2025, we drew down the full $1.0 billion available under the ECA Facility due November 2036 and recognized the net proceeds within Proceeds from issuance of long-term debt, net on our Consolidated Statements of Cash Flows.
As of December 31, 2025, our total debt and financing lease liabilities were $88.6 billion, excluding our tower obligations, of which $81.1 billion was classified as long-term debt and $1.1 billion was classified as long-term financing lease liabilities.
During the year ended December 31, 2025, we issued long-term debt for net proceeds of $12.0 billion, including proceeds from the ECA Facility due March 2036 and ECA Facility due November 2036, and redeemed and repaid short- and long-term debt with an aggregate principal amount of $6.2 billion.
Subsequent to December 31, 2025, on January 12, 2026, we issued $1.2 billion of 5.000% Senior Notes due 2036 and $850 million of 5.850% Senior Notes due 2056.
Subsequent to December 31, 2025, on January 22, 2026, we delivered notices of redemption on $3.0 billion aggregate principal amount of our 4.750% Senior Notes due 2028 and 4.750% Senior Notes to affiliates due 2028. We redeemed the notes at par on February 1, 2026.
Subsequent to December 31, 2025, on February 5, 2026, we entered into a master receivables financing agreement and borrowed $1.0 billion, maturing on February 5, 2027.
For more information regarding our debt financing transactions, see Note 9 – Debt of the Notes to the Consolidated Financial Statements.
License Purchase Agreements
On August 8, 2022, we entered into License Purchase Agreements to acquire spectrum in the 600 MHz band from Channel 51 License Co LLC and LB License Co, LLC (together with Channel 51 License Co LLC, the “Sellers”) in exchange for total cash consideration of $3.5 billion. On March 30, 2023, we and the Sellers entered into Amended and Restated License Purchase Agreements, pursuant to which we and the Sellers agreed to bifurcate the transaction into two tranches of licenses, with the closings on the acquisitions of certain licenses in Chicago, Dallas and New Orleans being deferred in order to potentially expedite the regulatory approval process for the remainder of the licenses. Subsequently, on August 25, 2023, we and the Sellers entered into Amendments No. 1 to the Amended and Restated License Purchase Agreements, whereby we deferred the closings of certain additional licenses in Chicago and Dallas into the second closing tranche. Together, the licenses with closings deferred into the second closing tranche represent approximately $1.1 billion of the aggregate $3.5 billion cash consideration.
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The FCC approved the purchase of the first tranche on December 29, 2023. The first tranche closed on June 24, 2024, and the associated payment of $2.4 billion was made on August 5, 2024.
The FCC approved the purchase of the Dallas licenses included in the second tranche on October 22, 2024. The purchase of the Dallas licenses closed on December 6, 2024, and the associated payment of $541 million was made on the same day.
The FCC approved the purchase of the remaining Chicago and New Orleans deferred licenses from the second tranche on April 15, 2025. The purchase of the remaining licenses closed on June 2, 2025, and the associated payment of $604 million was made on the same day.
On September 12, 2023, we entered into a license purchase agreement with Comcast (the “Comcast License Purchase Agreement”), pursuant to which we will acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion, subject to an application for FCC approval. The licenses are subject to an exclusive leasing arrangement between us and Comcast entered into contemporaneously with the Comcast License Purchase Agreement. On January 13, 2025, we and Comcast entered into an amendment to the Comcast License Purchase Agreement, pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. The parties are currently targeting a closing on the acquisition of approximately $45 million of the spectrum licenses in the first half of 2026, with the remaining spectrum license acquisitions targeting a closing in the first half of 2028.
On September 10, 2024, we entered into a License Purchase Agreement with N77 License Co LLC (“Buyer”), pursuant to which Buyer has the option to purchase all or a portion of our remaining 3.45 GHz spectrum licenses in exchange for a range of cash consideration, with the specific licenses sold to be determined based upon the amount of committed financing raised by Buyer. Following receipt of the required regulatory approvals, on April 30, 2025, we completed the sale of a portion of our 3.45 GHz spectrum licenses for $2.0 billion.
On May 30, 2025, we entered into a License and Unit Purchase Agreement with NEWLEVEL IV, L.P. and NEWLEVEL, LLC, both of which are affiliates of Grain Management, LLC (“Grain”), pursuant to which we will sell our 800 MHz spectrum licenses in exchange for cash consideration of $2.9 billion and the receipt of Grain’s 600 MHz spectrum licenses, which we are currently utilizing under lease agreements with Grain. In addition, we may receive a share of certain future proceeds from transactions entered into by Grain that monetize the 800 MHz spectrum licenses, subject to certain terms and conditions and following a certain return on invested capital for Grain. The transaction is subject to customary closing conditions and contingent on the receipt of regulatory approvals, including the FCC’s approval regarding certain modifications to the 800 MHz spectrum licenses, and the parties are currently targeting a closing in the first half of 2026. In addition, we expect an increase to our cash income tax liability of approximately $850 million upon the transaction close.
For more information regarding our license purchase agreements, see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements.
Acquisition of Ka’ena Corporation
On May 1, 2024, we completed the Ka’ena Acquisition. The total purchase price consists of an upfront payment on the Ka’ena Acquisition Date and an earnout payable in the third quarter of 2026. On the Ka’ena Acquisition Date and in satisfaction of the upfront payment, we transferred $420 million in cash and 3,264,952 shares of T-Mobile common stock valued at $536 million as determined based on its closing market price on April 30, 2024, for a total payment fair value of $956 million. The amount of the upfront payment was subject to customary adjustments and as a result of such adjustments, $17 million of the upfront payment was returned to T-Mobile during the fourth quarter of 2024, which resulted in a commensurate increase in the maximum amount payable in satisfaction of the earnout.
Based on the adjusted amount paid upfront, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout.
For more information regarding the Ka’ena Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Acquisition of Vistar Media Inc.
On February 3, 2025, we completed the Vistar Acquisition, and as a result, Vistar became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $621 million.
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For more information regarding the Vistar Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Acquisition of Blis Holdco Limited
On March 3, 2025, we completed the Blis Acquisition, and as a result, Blis became a wholly owned subsidiary of T-Mobile. In exchange, we transferred cash of $180 million.
For more information regarding the Blis Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Lumos Joint Venture
On April 1, 2025, we completed the joint acquisition of Lumos. During the three months ended June 30, 2025, we invested $932 million to acquire a 50% equity interest in the joint venture and 97,000 fiber customers. In addition, pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million between 2027 and 2028 under the existing business plan.
For more information regarding the Lumos joint venture, see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements.
Metronet Joint Venture
On July 24, 2025, we completed the joint acquisition of Metronet. During the three months ended September 30, 2025, we invested $4.6 billion to acquire a 50% equity interest in the joint venture and 713,000 fiber customers. We do not anticipate making further capital contributions following the closing under the existing business plan.
For more information regarding the Metronet joint venture, see Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements.
Acquisition of UScellular Wireless Business
On August 1, 2025, we completed the UScellular Acquisition, and as a result, the UScellular Wireless Business became wholly owned by T-Mobile. In exchange, on the UScellular Acquisition Date, we transferred cash of $2.8 billion. Additionally, the closing of the UScellular Acquisition obligated us to execute the Exchange Offers. On August 5, 2025, we executed the Exchange Offers of certain senior notes of UScellular with an aggregate outstanding principal balance of $1.7 billion for T-Mobile notes with the same interest rate, interest payment dates, maturity dates and redemption terms as each corresponding series of senior notes of UScellular.
For more information regarding the UScellular Acquisition, see Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements.
Off-Balance Sheet Arrangements
We have arrangements, as amended from time to time, to sell certain EIP accounts receivable and service accounts receivable on a revolving basis as a source of liquidity. As of December 31, 2025, we derecognized net receivables of $1.7 billion upon sale through these arrangements.
For more information regarding these off-balance sheet arrangements, see Note 5 – Sales of Certain Receivables of the Notes to the Consolidated Financial Statements.
Future Sources and Uses of Liquidity
We may seek additional sources of liquidity, including through the issuance of additional debt, to continue to opportunistically acquire spectrum licenses or other long-lived assets in private party transactions, make strategic investments, repurchase shares, pay dividends or for the refinancing of existing long-term debt on an opportunistic basis. Excluding liquidity that could be needed for acquisitions of businesses, spectrum and other long-lived assets, or for any potential stockholder returns, we expect our principal sources of funding to be sufficient to meet our anticipated liquidity needs for business operations for the next 12 months, as well as our longer-term liquidity needs. Our intended use of any such funds is for general corporate purposes,
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including for capital expenditures, spectrum purchases, opportunistic investments and acquisitions, redemption of debt, tower obligations, share repurchases, and dividend payments.
We determine future liquidity requirements for operations, capital expenditures, share repurchases and dividend payments based in large part upon projected financial and operating performance, and opportunities to acquire additional spectrum or repurchase shares. We regularly review and update these projections for changes in current and projected financial and operating results, general economic conditions, the competitive landscape and other factors. We have incurred, and will incur, substantial expenses to comply with the Government Commitments, and we have incurred all of the remaining restructuring and integration costs associated with the Sprint Merger, with the cash expenditures for the Sprint Merger-related costs extending beyond 2025. Additionally, we are expecting to incur substantial expenses in connection with the UScellular Acquisition, including coordinating and integrating businesses, operations, policies and procedures. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately. These expenses could exceed the costs historically borne by us and adversely affect our financial condition and results of operations. There are a number of additional risks and uncertainties that could cause our financial and operating results and capital requirements to differ materially from our projections, which could cause future liquidity to differ materially from our assessment.
The indentures, supplemental indentures and credit agreements governing our long-term debt to affiliates and third parties, excluding financing leases, contain covenants that, among other things, limit the ability of the Issuers or borrowers and the Guarantor Subsidiaries to incur more debt, create liens or other encumbrances, and merge, consolidate or sell, or otherwise dispose of, substantially all of their assets. We were in compliance with all restrictive debt covenants as of December 31, 2025.
Financing Lease Facilities
We have uncommitted financing lease facilities with certain third parties that provide us with the ability to enter into financing leases for network equipment and services. We expect to enter into up to a total of $1.2 billion in financing lease commitments during the year ending December 31, 2026. As of December 31, 2025, we have entered into $11.1 billion of financing leases under these financing lease facilities, of which $1.2 billion was executed during the year ended December 31, 2025.
Capital Expenditures
Our capital liquidity requirements have been driven primarily by capital expenditures for spectrum licenses, the construction, expansion and upgrading of our network infrastructure, the integration of the networks, spectrum, technology, personnel and customer base of T-Mobile and UScellular, and investments in information technology platforms. We expect to maintain our investment in capital expenditures related to these efforts in 2026 compared to 2025, as we continue our integration efforts, maintain our commitment to build out our nationwide 5G network and continue our digital transformation. Future capital expenditure requirements will be primarily driven by the deployment of acquired spectrum licenses.
For more information regarding our spectrum licenses, see Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements.
Stockholder Returns
On December 13, 2024, we announced that our Board of Directors authorized our 2025 Stockholder Return Program of up to $14.0 billion through December 31, 2025. The 2025 Stockholder Return Program consisted of repurchases of shares of our common stock and the payment of cash dividends.
On November 21, 2024, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which was paid on March 13, 2025, to stockholders of record as of the close of business on February 28, 2025.
On February 6, 2025, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which was paid on June 12, 2025, to stockholders of record as of the close of business on May 30, 2025.
On June 5, 2025, our Board of Directors declared a cash dividend of $0.88 per share on our issued and outstanding common stock, which was paid on September 11, 2025, to stockholders of record as of the close of business on August 29, 2025.
On September 18, 2025, our Board of Directors declared a cash dividend of $1.02 per share on our issued and outstanding common stock, which was paid on December 11, 2025, to stockholders of record as of the close of business on November 26, 2025.
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During the year ended December 31, 2025, we paid an aggregate of $4.1 billion in cash dividends to our stockholders under the 2025 Stockholder Return Program, which were presented within Net cash used in financing activities on our Consolidated Statements of Cash Flows.
During the year ended December 31, 2025, we repurchased 42,363,226 shares of our common stock at an average price per share of $232.96 for a total purchase price of $9.9 billion, under the 2025 Stockholder Return Program.
On December 11, 2025, we announced that our Board of Directors authorized our 2026 Stockholder Return Program of up to $14.6 billion that will run through December 31, 2026. The 2026 Stockholder Return Program is expected to consist of additional repurchases of shares of our common stock and the payment of cash dividends. The declaration and payment of all dividends is subject to the discretion of our Board of Directors and will depend on financial and legal requirements and other considerations. The amount available under the 2026 Stockholder Return Program for share repurchases will be reduced by the amount of any cash dividends declared and paid by us.
The 2026 Stockholder Return Program aligns with our commitment to a balanced capital allocation strategy that supports core and strategic investments in the business while delivering returns to stockholders. From January 1, 2026, through the end of 2027, the Company expects its business plan to support:
• Up to approximately $30.0 billion for share repurchases and cash dividends, which includes the 2026 Stockholder Return Program; and
• Over $22.0 billion in a discretionary and flexible envelope for opportunistic deployment, which may include de-levering, investments in our core business, strategic investments, and/or additional capital returns to stockholders beyond the $30.0 billion allocation.
On December 4, 2025, our Board of Directors declared a cash dividend of $1.02 per share on our issued and outstanding common stock, which will be paid on March 12, 2026, to stockholders of record as of the close of business on February 27, 2026. As of December 31, 2025, $1.1 billion for dividends payable is presented within Other current liabilities on our Consolidated Balance Sheets.
Subsequent to December 31, 2025, from January 1, 2026, through February 6, 2026, we repurchased 5,106,691 shares of our common stock at an average price per share of $192.61 for a total purchase price of $984 million under the 2026 Stockholder Return Program. As of February 6, 2026, we had up to $13.6 billion remaining under the 2026 Stockholder Return Program for repurchases of shares and quarterly dividends through December 31, 2026.
For additional information regarding the 2025 Stockholder Return Program and the 2026 Stockholder Return Program, see Note 1 5 - Stockholder Return Program s of the Notes to the Consolidated Financial Statements.
Contractual Obligations
In connection with the regulatory approvals of the Sprint Merger, we made commitments to various state and federal agencies, including the U.S. Department of Justice and FCC.
For more information regarding these commitments, see Note 18 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements.
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The following table summarizes our material contractual obligations and borrowings as of December 31, 2025, and the timing and effect that such commitments are expected to have on our liquidity and capital requirements in future periods:
(in millions)
Less Than 1 Year
1 - 3 Years
3 - 5 Years
More Than 5 Years
Total
Long-term debt (1)
Interest on long-term debt
Financing lease liabilities, including imputed interest
Tower obligations (2)
Operating lease liabilities, including imputed interest
Purchase obligations (3) (4) (5) (6)
Spectrum leases and service credits (7)
IP transit services liability (8)
Total contractual obligations
(1) Represents principal amounts of long-term debt to affiliates and third parties at maturity, excluding unamortized premiums, discounts, debt issuance costs, consent fees, and financing lease obligations. See Note 9 – Debt of the Notes to the Consolidated Financial Statements for further information.
(2) Future minimum payments, including principal and interest payments, related to the tower obligations. See Note 10 – Tower Obligations of the Notes to the Consolidated Financial Statements for further information.
(3) The minimum commitment for certain obligations is based on terminationpenalties that could be paid to exit the contracts. Terminationpenalties are included in the above table as payments due as of the earliest we could exit the contract, typically in less than one year. For certain contracts that include fixed volume purchase commitments and fixed prices for various products, the purchase obligations are calculated using fixed volumes and contractually fixed prices for the products that are expected to be purchased. This table does not include open purchase orders as of December 31, 2025 under normal business purposes. See Note 18 – Commitments and Contingencies of the Notes to the Consolidated Financial Statements for further information.
(4) On September 12, 2023, we entered into a License Purchase Agreement to acquire spectrum in the 600 MHz band from Comcast in exchange for total cash consideration of between $1.2 billion and $3.3 billion. On January 13, 2025, we and Comcast entered into an amendment to the License Purchase Agreement pursuant to which we will acquire additional spectrum. Subsequent to the amendment, the total cash consideration for the transaction is between $1.2 billion and $3.4 billion. The agreement, as amended, remains subject to an application for FCC approval. Total consideration for this License Purchase Agreement is excluded from our reported purchase obligations above. See Note 7 – Goodwill, Spectrum License Transactions and Other Intangible Assets of the Notes to the Consolidated Financial Statements for further information.
(5) On May 1, 2024, we completed the Ka’ena Acquisition and based on the adjusted amount paid upfront, an additional $420 million in future cash and T-Mobile common stock is payable in satisfaction of the earnout and is excluded from our reported purchase commitments above. See Note 2 – Business Combinations of the Notes to the Consolidated Financial Statements for further information.
(6) On April 1, 2025, we completed the joint acquisition of Lumos and pursuant to the definitive agreement, we expect to make an additional capital contribution of approximately $500 million between 2027 and 2028 under the existing business plan, which is excluded from our reported purchase obligations above. See Note 3 – Joint Ventures of the Notes to the Consolidated Financial Statements for further information.
(7) Spectrum lease agreements are typically for terms of five to 10 years with automatic renewal provisions, bringing the total term of the agreements up to 30 years.
(8) On May 1, 2023, we completed the sale of the wireline business to Cogent Infrastructure, Inc. Under the terms of the wireline sale agreement, the Company agreed to make payments pursuant to an IP transit services agreement totaling $700 million, consisting of (i) $350 million in equal monthly installments during the first year after the closing and (ii) $350 million in equal monthly installments over the subsequent 42 months. IP transit services liability represents the remaining amount to be paid associated with the IP transit services agreement.
Certain commitments and obligations are included in the table based on the year of required payment or an estimate of the year of payment. Other long-term liabilities have been omitted from the table above due to the uncertainty of the timing of payments, combined with the lack of historical trends to predict future payments.
The purchase obligations reflected in the table above are primarily commitments to purchase spectrum licenses, wireless devices, network services, equipment, software, marketing sponsorship agreements and other items in the ordinary course of business. These amounts do not represent our entire anticipated purchases in the future but represent only those items for which we are contractually committed. Where we are committed to make a minimum payment to the supplier regardless of whether we take delivery, we have included only that minimum payment as a purchase obligation. The acquisition of spectrum licenses is subject to regulatory approval and other customary closing conditions.
Related Person Transactions
We have related person transactions associated with DT, SoftBank Group Corp. (“SoftBank”) (through August 6, 2025, the date SoftBank ceased to be a related person) or their respective affiliates in the ordinary course of business, including intercompany servicing and licensing.
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As of February 6, 2026, DT held, directly or indirectly, approximately 52.8% of the outstanding T-Mobile common stock. As a result of the Proxy, Lock-Up and ROFR Agreement, dated April 1, 2020, by and between DT and SoftBank, DT has voting control, as of February 6, 2026, over approximately 56.9% of the outstanding T-Mobile common stock.
Disclosure of Iranian Activities under Section 13(r) of the Exchange Act
Section 219 of the Iran Threat Reduction and the Syria Human Rights Act of 2012 added Section 13(r) to the Exchange Act. Section 13(r) requires an issuer to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with designated natural persons or entities involved in terrorism or the proliferation of weapons of mass destruction. Disclosure is required even where the activities, transactions or dealings are conducted outside the U.S. by non-U.S. affiliates in compliance with applicable law, and whether or not the activities are sanctionable under U.S. law.
As of the date of this report, we are not aware of any activity, transaction or dealing by us or any of our affiliates for the year ended December 31, 2025, that requires disclosure in this report under Section 13(r) of the Exchange Act, except as set forth below with respect to affiliates or former affiliates that we do not control and that are our affiliates or former affiliates solely due to their common control with either DT or SoftBank. We have relied upon DT and SoftBank for information regarding their respective activities, transactions and dealings. On August 6, 2025, SoftBank ceased to be our affiliate.
DT, through certain of its non-U.S. subsidiaries, is party to roaming and interconnect agreements with the following mobile and fixed line telecommunication providers in Iran, some of which are or may be government-controlled entities: Irancell Telecommunications Services Company, Telecommunication Kish Company, Mobile Telecommunication Company of Iran, and Telecommunication Infrastructure Company of Iran. In addition, during the year ended December 31, 2025, DT, through certain of its non-U.S. subsidiaries, provided basic telecommunications services to seven customers in Germany identified on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Department of Treasury’s Office of Foreign Assets Control: Bank Melli, Europäisch-Iranische Handelsbank, CPG Engineering & Commercial Services GmbH, Golgohar Trade and Technology GmbH, International Trade and Industrial Technology ITRITEC GmbH, The Airline of the Islamic Republic of Iran and Kara Industrial Trading GmbH. These services are in the process of being terminated, in particular by undertaking appropriate legal steps before German courts. For the year ended December 31, 2025, gross revenues of all DT affiliates generated by roaming and interconnection traffic and telecommunications services with the Iranian parties identified herein were less than $0.2 million, and the estimated net profits were less than $0.1 million.
In addition, DT, through certain of its non-U.S. subsidiaries that operate a fixed-line network in their respective European home countries (in particular, Germany), provides telecommunications services in the ordinary course of business to the Embassy of Iran in those European countries. Gross revenues and net profits recorded from these activities for the year ended December 31, 2025, were less than $0.1 million. We understand that DT intends to continue these activities.
Separately, SoftBank, through one of its non-U.S. subsidiaries, provides roaming services in Iran through Irancell Telecommunications Services Company. During the year ended December 31, 2025, SoftBank had no gross revenues from such services, and no net profit was generated. We understand that the SoftBank subsidiary intends to continue such services. This subsidiary also provides telecommunications services in the ordinary course of business to accounts affiliated with the Embassy of Iran in Japan. During the year ended December 31, 2025, SoftBank estimates that gross revenues and net profit generated by such services were both under $0.1 million. We understand that the SoftBank subsidiary is obligated under contract and intends to continue such services.
In addition, SoftBank, through one of its non-U.S. indirect subsidiaries, provides office supplies to the Embassy of Iran in Japan. SoftBank estimates that gross revenues and net profit generated by such services during the year ended December 31, 2025, were both under $0.1 million. We understand that the SoftBank subsidiary intends to continue such activities.
Critical Accounting Estimates
Our significant accounting policies are fundamental to understanding our results of operations and financial condition as they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. See Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements for further information.
Two of these policies, discussed below, relate to critical estimates because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. Actual results could differ from those estimates.
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Management and the Audit Committee of the Board of Directors have reviewed and approved the accounting policies associated with these critical estimates.
Depreciation
Our property and equipment balance represents a significant component of our consolidated assets. We record property and equipment at cost, and we generally depreciate property and equipment on a straight-line basis over the estimated useful life of the assets. If all other factors were to remain unchanged, we expect that a one-year increase in the useful lives of our in-service property and equipment would have resulted in a decrease of approximately $3.4 billion in our 2025 depreciation expense and that a one-year decrease in the useful life would have resulted in an increase of approximately $5.3 billion in our 2025 depreciation expense.
See Note 1 – Summary of Significant Accounting Policies and Note 6 – Property and Equipment of the Notes to the Consolidated Financial Statements for information regarding depreciation of assets, including management’s underlying estimates of useful lives.
Income Taxes
We account for uncertainty in income taxes recognized in the financial statements in accordance with the accounting guidance for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. We assess whether it is more likely than not that a tax position will be sustained upon examination based on the technical merits of the position and adjust the unrecognized tax benefits in light of changes in facts and circumstances, such as changes in tax law, interactions with taxing authorities and developments in case law.
The income tax laws of the jurisdictions in which we operate are complex and subject to different interpretations by management and the relevant government taxing authorities. In establishing a provision for income tax expense, we must make judgments about the application of these inherently complex tax laws. We must also make estimates about when in the future certain items will affect taxable income in the various tax jurisdictions. Our interpretations may be subjected to review during examination by taxing authorities and disputes may arise over the respective tax positions. We attempt to resolve these disputes during the tax examination and audit process and ultimately through the court system when applicable.
We monitor relevant tax authorities and revise our estimate of accrued income taxes due to changes in income tax laws and their interpretation by the courts and regulatory authorities on a quarterly basis. Revisions of our estimate of accrued income taxes also may result from our own income tax planning and from the resolution of income tax controversies. Such revisions in our estimates may be material to our Income tax expense for any given quarter.
Accounting Pronouncements Not Yet Adopted
For information regarding recently issued accounting standards, see Note 1 – Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements.
