T-Mobile US reported fourth quarter and full-year 2015 results. For the full year 2015, T-Mobile added 8.3 million total net customers.
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The company delivered 11% growth in service revenue and 31% growth in Adjusted EBITDA. T-Mobile’s growth has been fueled by the performance of its nationwide 4G LTE network, which now covers 305 million Americans.
In the fourth quarter of 2015, T-Mobile added 2.1 million net customers, bringing its total customer count to more than 63 million at year-end 2015.
This was the eleventh consecutive quarter that the company has generated more than 1 million net customer additions and the third consecutive quarter with more than 2 million net customer additions.
Service revenues for the fourth quarter of 2015 grew by 11.7% year-over-year, primarily due to rapid growth in the company’s customer base. T-Mobile’s total revenues for the fourth quarter of 2015 grew by 1.1% year-over-year.
The year-over-year change in total revenues was impacted by lower equipment revenues, which declined by 29.5% year-over-year primarily due to the mix shift to the JUMP! On Demand program.
Under the JUMP! On Demand program, equipment revenues associated with leased devices are recognized over the lease term rather than when the device is delivered to the customer, resulting in lower equipment revenues for the quarter.
Full-year 2015 service revenues increased by 10.9% year-over-year, and total revenues increased by 8.4% year-over-year.
Branded postpaid phone Average Revenue per User (ARPU) of $48.05 in the fourth quarter of 2015 was generally stable sequentially as continued strategic focus on family plan penetration and promotional activity was offset by higher data attach rates.
Year-over-year, branded postpaid phone ARPU declined by 0.4%. Branded postpaid Average Billings per User (ABPU) was a record $63.74 in the fourth quarter of 2015, up 3.1% year-over-year primarily due to growth in total EIP billings and lease revenues on a per user basis.
Lines per account grew to 2.54 in the fourth quarter of 2015, up from 2.36 in the fourth quarter of 2014.
T-Mobile grew Adjusted EBITDA by 30.2% year-over-year for the fourth quarter of 2015 to $2.3 billion.
The increase was primarily due to higher service revenues from growth in the customer base, MetroPCS synergies, focused cost control, and decreased losses on equipment sales primarily driven by the impact of customers shifting to leasing devices with JUMP! On Demand, partially offset by higher selling, general and administrative expenses due to customer growth.
The company expanded its Adjusted EBITDA margin to 35% for the fourth quarter of 2015, up from 30% in the fourth quarter of 2014. Adjusted EBITDA in the fourth quarter of 2015 benefited from a gain of $139 million related to a spectrum license transaction. For full-year 2015, Adjusted EBITDA grew by 31.2% to $7.4 billion.
The aggregate impact from leasing and Data Stash on Adjusted EBITDA in the fourth quarter of 2015 was $246 million, including lease revenues of $194 million and the non-cash net impact from Data Stash of $52 million.
For full-year 2015, the aggregate impact was $158 million, including lease revenues of $224 million, partially offset by the net impact from Data Stash of $66 million.
Net income amounted to $297 million, up from $138 million in the third quarter of 2015 and $101 million in the fourth quarter of 2014.
For the full-year 2015, net income was $733 million compared to $247 million in 2014.
Earnings per share (EPS) in the fourth quarter of 2015 was $0.34, more than double the EPS of $0.15 in the third quarter of 2015 and almost triple the EPS of $0.12 in the fourth quarter of 2014. For the full-year 2015, EPS was $0.82 compared to $0.30 in 2014.
Net cash provided by operating activities was $2.2 billion in the fourth quarter of 2015, up from $1.4 billion in the fourth quarter of 2014. For full-year 2015, net cash provided by operating activities was $5.4 billion compared to $4.1 billion in 2014.
Free cash flow was $802 million in the fourth quarter of 2015, up from $56 million in the fourth quarter of 2014. For full-year 2015, free cash flow was $690 million compared to a loss of $171 million in 2014.
Free cash flow in the fourth quarter of 2015 included net cash proceeds of $795 million related to sales of certain EIP receivables beginning in November 2015.
Adjusted free cash flow, which excludes decommissioning payments related to the one-time shutdown of the CDMA portion of the MetroPCS network, was $897 million in the fourth quarter of 2015 and $1.0 billion for full-year 2015. ■