‘we had our best growth year ever’

T-Mobile US Inc (NASDAQ: TMUS) reported market-beating earnings for its fiscal Q4 and gave solid guidance for 2022 on Wednesday, resulting in a 10% increase in the stock price after-hours.

Important points in T-Mobile’s Q4 earnings report

T-Mobile earned 34 cents per share in the fourth quarter; a sharp decline from last year’s 60 cents per share that executives said was related to the merger with Sprint. The telecom giant noted $20.8 billion in revenue, up 5.5% YoY.

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According to FactSet, analysts had expected a much lower 13 cents of per-share earnings but a slightly higher $21.1 billion in revenue. Free cash flow printed at $1.10 billion.

T-Mobile added 844,000 net postpaid phone subscribers in the recent quarter to end the year with 2.9 million postpaid phone subscribers; still behind AT&T by more than a quarter-million but well above Verizon’s number. On CNBC’s “Closing Bell”, CEO Mike Sievert said:

We had our best growth year ever, not just in subscribers but also on service revenue, EBITDA, and cash flow, where we roundly beat the competition YoY on all the important metrics. It shows that our underlying Magenta model that we’ve been pursuing is firing on all cylinders.

Guidance for the full financial year

For fiscal 2022, T-Mobile expects 5.0 million to 5.5 million net additions in postpaid customers versus analysts at 5.2 million, as per the earnings press release.

The wireless network operator forecasts up to $27.5 billion in adjusted EBITDA and $7.1 billion to $7.6 billion in free cash flow. In comparison, experts had called for $27.9 billion in adjusted EBITDA and $8.1 billion in FCF.

T-Mobile, however, is known to be conservative with its future outlook. According to CEO Sievert, T-Mobile is ahead of its competitors in 5G. He added:

As AT&T and Verizon are just getting started with 5G, we’re nationwide already with 210 million people covered with 5G, the fastest and most available in the country, and it’s a real advantage. Ultimately, T-Mobile is delivering the best network and the best value.