T-Mobile US reported second quarter 2015 results. The company generated 2.1 million total net customer additions, marking the ninth consecutive quarter that T-Mobile has delivered over one million total net customer additions.
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Additionally, the Company delivered 14% total revenue growth and 25% growth in adjusted EBITDA compared to the second quarter of 2014.
Net income amounted to $361 million, a strong improvement from a loss of $63 million in the first quarter of 2015 and down from net income of $391 million in the second quarter of 2014.
Earnings per share (EPS) in the second quarter of 2015 was $0.42 compared to EPS of $0.48 in the second quarter of 2014 and a loss per share of $(0.09) in the first quarter of 2015.
The year-over-year decrease in net income and EPS was primarily due to gains on disposal of spectrum licenses of $747 million recognized in the second quarter of 2014, partially offset by a decrease in income tax expense primarily due to the impact of income tax benefits for several discrete items recognized in the second quarter of 2015.
T-Mobile expects EPS to be positive for all the remaining quarters and the full-year of 2015.
Branded postpaid phone churn was 1.3% in the second quarter of 2015, down 16 basis points year-over-year and essentially flat sequentially. The year-over-year improvement in churn reflects ongoing improvements in the Company’s network, customer service, and the overall value of its offerings in the marketplace, resulting in increased customer satisfaction and loyalty.
T-Mobile’s branded prepaid net customer additions were 178,000 in the second quarter of 2015, which represents a significant improvement both year-over-year and sequentially. Branded prepaid to branded postpaid migrations were 175,000 in the second quarter of 2015, down from 195,000 in the first quarter of 2015.
Total device sales, including both branded postpaid and prepaid customers, were 8.3 million units in the second quarter of 2015, of which total smartphone sales were 7.4 million units.
Adjusted EBITDA for the second quarter of 2015 was $1.8 billion, up 25.2% year-over-year and up 30.9% sequentially. Year-over-year, the increase was primarily due to higher service revenues from growth in the customer base combined with strong cost control, especially in cost of services, partially offset by higher selling, general and administrative (SG&A) expenses.
Sequentially, the increase was primarily due to higher service revenues and decreased losses on equipment sales, partially offset by higher SG&A expenses. Excluding the impacts of Data Stash, Adjusted EBITDA in the second quarter of 2015 increased by 21.3% sequentially. The Adjusted EBITDA margin was 30% for the second quarter of 2015, up from 26% in the second quarter of 2014 and 24% in the first quarter of 2015. ■