T-Mobile owner performs better than expected by analysts

T-Mobile's owner – namely, Deutsche Telekom – has a reason to celebrate. The company reported a slight increase in its first-quarter core profit, just above what analysts had expected, and raised its full-year forecast.

The company posted adjusted earnings before EBITDA AL of 11.3 billion euros, or about 12.7 billion dollars. That's a 7.9% rise compared to the same quarter last year. Analysts had anticipated 11.1 billion euros, based on a company survey.

EBITDA AL is a way to measure how much money a company makes from its main business activities before taking out costs like interest, taxes, depreciation, and amortization, but after subtracting lease expenses. This means it shows the company's earnings after paying for things like office or equipment rentals, which are often long-term lease agreements. Companies like those in the telecom industry often use EBITDA AL because they have a lot of lease agreements, and this measure helps investors see how well the core business is doing, without being misled by accounting changes.

Deutsche Telekom also adjusted its 2025 outlook, raising its expected core profit to around 45 billion euros, up slightly from the earlier target of 44.9 billion. Free cash flow after leases is now expected to reach roughly 20 billion euros, compared to the prior forecast of 19.9 billion. This follows a similar move in April by its US-based subsidiary, T-Mobile US, which lifted its own profit expectations despite slower-than-anticipated growth in wireless subscribers.



In late April, T-Mobile reported strong results for the first quarter of 2025, calling it not just its best Q1 ever, but the best quarter in the industry overall. The company added 1.3 million postpaid customers, including 495,000 new phone customers and 424,000 new internet subscribers, leading the sector in customer growth. This performance drove a 5% year-over-year increase in service revenue to $16.9 billion, while postpaid revenue rose 8% to $13.6 billion. Net profit reached $3.0 billion, up 24% from the same period last year.

The free cash flow also saw a sharp jump of 52.4% year-on-year, beating analyst estimates by over one billion euros.

In Germany, however, the company faced challenges. It pointed to intense competition and a cooling broadband market, which led to a net loss of 7,000 customers. UBS analyst Polo Tang suggested this could be due to rival Vodafone's use of indirect sales channels, such as price comparison websites like Check24. Some market watchers, including ODDO BHF's Stephane Beyazian, noted that these negative trends in the German broadband segment might concern investors. Still, Deutsche Telekom's performance across the rest of Europe remained solid, with revenue rising organically by 3.7%.

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