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T-Mobile’s EBITDA Grow despite Higher Expenses

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T-Mobile’s adjusted EBITDA continue to rise

T-Mobile’s (TMUS) adjusted EBITDA grew ~14.8% YoY (year-over-year) to $3.2 billion in the third quarter. Its new revenue accounting standards and hurricane-related insurance reimbursements boosted its EBITDA, by $136 million and $138 million net of costs, respectively.

The company’s adjusted EBITDA grew despite its operating expenses rising ~8.1% YoY to $9.4 billion. Its adjusted EBITDA margin increased YoY to 40% from 37%.

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T-Mobile expects adjusted EBITDA of $11.8 billion–$12.0 billion in fiscal 2018, excluding future spectrum gains and including anticipated leasing revenue of $0.6 billion–$0.7 billion. Including the effects of T-Mobile’s new revenue recognition accounting standards, its adjusted EBITDA are expected to grow by an additional $0.2 billion–$0.5 billion, bringing its total guidance to $12.0 billion–$12.5 billion.

Peer comparison

Verizon’s (VZ) consolidated adjusted EBITDA margin was 37.4% in the third quarter, while AT&T’s (T) domestic wireless EBITDA margin was 42.8%. Meanwhile, Sprint’s (S) consolidated adjusted EBITDA margin was 56.5% in the second quarter of fiscal 2018 (ended in September).

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