AI Takeaway
T-Mobile US delivered 10.6% revenue growth in Q1 FY2026 to $23.1B, but net income fell 15.2% to $2.5B as higher SG&A costs, increased D&A from network investments, and a surge in share buybacks weighed on profitability and cash balances.
Revenue
$23.11B
++10.63% YoY
EPS (Basic)
$2.28
-11.97% YoY
Operating Income
$4.5B
-6.31% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew 10.6% year-over-year to $23.1B in Q1 FY2026, up from $20.9B in Q1 FY2025, reflecting continued subscriber momentum and expanded service offerings driving meaningful top-line expansion.
Source: Source: 10-Q Income Statement
Despite strong revenue growth, operating income declined 6.3% to $4.5B and net income fell 15.2% to $2.5B, indicating that cost growth is outpacing revenue gains. SG&A expenses rose 8.7% to $6.0B, and D&A surged 19.4% to $3.8B, reflecting ongoing network investment amortization.
Source: Source: 10-Q Income Statement & Cash Flow Statement
Operating margin contracted approximately 350 basis points year-over-year, falling from 23.0% to 19.5%, as elevated operating expenses — particularly SG&A and depreciation — absorbed the benefits of revenue growth.
Source: Source: 10-Q Key Ratios
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Upgrade to unlockCash and equivalents plunged 70.7% year-over-year to $3.5B, driven by $4.8B in share buybacks and net financing outflows of $6.4B. This sharp reduction in liquidity could limit T-Mobile's financial flexibility if unexpected capital needs or market disruptions arise.
Source: Source: 10-Q Balance Sheet & Cash Flow Statement
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Upgrade to unlockReported EPS of $2.27 versus the $2.03 analyst consensus — a +11.9% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $23.11B | $20.89B | +10.63% |
Operating Income | $4.5B | $4.8B | -6.31% |
Net Income | $2.5B | $2.95B | -15.20% |
EPS (Basic) | $2.28 | $2.59 | -11.97% |
EPS (Diluted) | $2.27 | $2.58 | -12.02% |
SG&A Expense | $5.97B | $5.49B | +8.71% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $214.67B | $214.63B | +0.02% |
Current Assets | $22.12B | $27.44B | -19.40% |
Current Liabilities | $20.34B | $23.63B | -13.90% |
Stockholders' Equity | $55.88B | $61.1B | -8.55% |
Cash & Equivalents | $3.52B | $12B | -70.67% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $7.22B | $6.85B | +5.48% |
Investing Cash Flow | $-2.85B | $-3.41B | +16.43% |
Financing Cash Flow | $-6.44B | $3.19B | -301.69% |
Share Buybacks | $4.83B | $2.49B | +93.50% |
D&A | $3.82B | $3.2B | +19.36% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 19.5% | 23.0% | -3.52% |
Net Margin | 10.8% | — | — |
ROE | 4.5% | — | — |
ROA | 1.2% | — | — |
Current Ratio | $1.087 | — | — |
Other companies in Wireless Telecommunication Services
T-Mobile reported diluted EPS of $2.27 in Q1 FY2026, down 12.0% from $2.58 in Q1 FY2025. Whether this beat or missed Wall Street consensus estimates is not determinable from the filing alone, but the year-over-year earnings decline may have been a negative surprise given strong revenue growth of 10.6%.
T-Mobile's net income fell 15.2% to $2.5B even as revenue grew 10.6% to $23.1B, primarily because SG&A expenses rose 8.7% to $6.0B and depreciation & amortization surged 19.4% to $3.8B. These rising costs compressed operating margin from 23.0% to 19.5%, and additional below-the-line costs further reduced net income.
T-Mobile's cash and equivalents dropped 70.7% year-over-year to just $3.5B, down from $12.0B in Q1 FY2025. The sharp decline was driven by $4.8B in share buybacks — nearly double the prior year — and net financing outflows of $6.4B, partially offset by strong operating cash flow of $7.2B.
T-Mobile spent $4.8B on share buybacks in Q1 FY2026, a 93.5% increase compared to $2.5B in Q1 FY2025, signaling aggressive capital return to shareholders. This contributed to an 8.6% decline in stockholders' equity to $55.9B and was a major driver of the large drop in cash balances.
Key risks highlighted by the Q1 FY2026 financial data include rapid cash depletion (cash fell 70.7% to $3.5B), significant margin compression (operating margin down ~350 bps to 19.5%), and ongoing heavy capital expenditure requirements for 5G network maintenance. The disconnect between strong revenue growth and declining net income (-15.2%) also raises concerns about cost discipline going forward.