T-Mobile US delivered a powerful first-quarter performance for 2025, boasting record-breaking customer growth, industry-leading service revenue gains, and an upbeat financial outlook. Yet, in a move that surprised many, the carrier’s stock plunged more than 10% on Friday morning, trading near $232.63, down sharply from its previous close of $262.18.
This sharp selloff came despite T-Mobile’s results exceeding Wall Street’s expectations. The company reported adjusted earnings per share of $2.58, topping forecasts, and revenue of $20.89 billion, also above consensus estimates. T-Mobile added 495,000 postpaid phone customers and 424,000 high-speed internet subscribers, both industry-leading figures, and raised its 2025 financial guidance, projecting continued momentum in core adjusted EBITDA and free cash flow.
So why did investors react so negatively?
The primary driver behind the stock’s decline was that T-Mobile’s postpaid phone net additions, while strong, fell just short of analyst projections. Wall Street had expected around 505,000 new postpaid phone customers, but the actual figure was 495,000.
In a highly competitive and saturated U.S. wireless market, even a slight miss on subscriber growth can trigger outsized reactions, especially when expectations are sky-high.
Additionally, the broader telecom sector is facing mounting competitive pressures. Rivals are ramping up promotions and price guarantees to attract customers, making it harder for T-Mobile to maintain its breakneck pace of growth.
Investors are also wary of the company’s cautious EBITDA guidance, which signals higher spending on customer acquisition and retention. This could squeeze margins in the quarters ahead, even as T-Mobile continues to deliver robust top-line growth.
Despite the market’s knee-jerk reaction, T-Mobile’s underlying business fundamentals remain strong. The company continues to lead the industry in network performance, customer satisfaction, and innovation, including the upcoming launch of its satellite-to-cell service.
With a raised outlook for 2025 and a track record of outperformance, T-Mobile is positioning itself for continued success, even as it navigates a more challenging competitive landscape.
The selloff underscores just how sensitive investors are to even minor deviations from expectations in the current market environment. For long-term shareholders, T-Mobile’s Q1 performance and guidance point to resilience and opportunity, provided the company can sustain its growth trajectory in an increasingly crowded field.