T-Mobile US, Inc. (TMUS) receives Old York Operational Quality (A) Rating for fiscal year 2025
(A) | Telecommunications | Wireless & Broadband
By: Old York Financial
A Private Principal Research Report
the verdict
Old York Financial has assigned T-Mobile US (TMUS) an Operational Quality (A) Rating. T-Mobile is currently the "Aggressor" of the American wireless market. In 2025, the machine delivered $88.31 Billion in total revenue, an 8.5% increase YoY growth rates that its peers (Verizon and AT&T) simply cannot match. It earns an (A) because it has successfully transitioned from a "disruptor" to a "profit engine," boasting a 12.4% net margin and an industry-best $18.0 Billion in Adjusted Free Cash Flow. While it carries significant debt from its aggressive spectrum auctions and acquisitions (Lumos, UScellular), its ability to capture nearly all industry net adds makes it the highest-quality machine in the domestic telecom sector.
the old york analysis
owner earnings: the growth-adjusted cash flow
We look at the cash produced by T-Mobile’s 5G lead. Unlike its peers, TMUS is still in a high-growth phase while simultaneously returning massive capital to the Principal.
2025 Operating Cash Flow: $27.95 Billion
(-) Capital Expenditures: ($10.00 Billion)
(+) Depreciation & Amortization: $13.41 Billion
OLD YORK OWNER EARNINGS: $31.36 Billion
Analyst Note: T-Mobile is a "Shareholder Cannibal." In 2025, it returned $14.0 Billion to stockholders through $9.9B in share repurchases and $4.1B in dividends. By retiring 42.4 million shares in a single year, the machine is aggressively concentrating the Principal's ownership in the underlying cash flow.
operational efficiency
ROIC (Return on Invested Capital): 10.0%
ROE (Return on Equity): 18.6%
Net Profit Margin: 12.4%
Postpaid Phone Churn: 0.93% (Industry Leading)
Analyst Note (The Churn Advantage): The "Quality" of this machine is best seen in its 0.93% churn rate. In a commodity business, the ability to keep customers is the ultimate proof of a moat. T-Mobile's network perception has finally caught up to its price leadership, allowing it to maintain a 12.4% margin even while growing its customer base by 8.0 Million total net adds in 2025.
growth & market dominance
2025 Service Revenue: $71.3 Billion (+8% YoY).
Broadband Momentum: Added 2.0 Million broadband net adds in 2025. T-Mobile is now a legitimate threat to cable incumbents, ending the year with 8.5 million 5G broadband customers.
The High-End Pivot: Postpaid ARPU (Average Revenue Per User) increased to $50.71, proving T-Mobile can move customers to premium plans without losing them to rivals.
2026 Outlook: Management has guided for a further increase in Core Adjusted EBITDA to $37.0B–$37.5B, signaling that the "efficiency harvest" from the Sprint merger is still yielding fruit.
the fortress check
Total Assets: $219.2 Billion.
Cash & Equivalents: $5.6 Billion.
Long-Term Debt: $81.1 Billion.
Net Debt/EBITDA: 2.5x (Prudent leverage for a utility-like recurring revenue stream).
Capital Allocation: Announced a new $14.6 Billion stockholder return authorization for 2026.
M&A Discipline: Successfully integrated Lumos and Metronet in 2025 to bolster its fiber-to-the-home (FTTH) capabilities.
final determination
Rating: Old York Operational Quality (A)
Classification: The Efficient Aggressor.
T-Mobile is an (A) because it has solved the telecom riddle: it has the growth of a tech company with the recurring revenue of a utility. Its 18.6% ROE is superior to Verizon's (when adjusted for leverage quality) and its free cash flow conversion is the best in the class. It is the "freshest fruit" in the wireless basket.
Disclaimer: Old York Financial operates privately as a principal and sells corporate advisory. Old York Financial is not an accountant, a financial advisor, a broker, an agent, a lawyer, or a portfolio manager.
