Comcast Reports 2nd Quarter 2024 Results

Comcast Corporation (NASDAQ:CMCSA) today reported results for the quarter ended June 30, 2024.

"We grew Adjusted EPS high single digits and continued to invest aggressively in our businesses while returning $3.4 billion to shareholders," said Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation. "Broadband ARPU increased by 3.6% and we delivered 6% revenue growth in our connectivity businesses, while expanding our Adjusted EBITDA margin across Connectivity & Platforms to a record-high 41.9%. Media returned to Adjusted EBITDA growth, driven by Peacock, which delivered the best year-over-year improvement for any quarter since its launch in 2020. In Studios and Theme Parks, we faced difficult comparisons to last year, but our upcoming film and TV content and the debut of Epic Universe bode very well for the future. More broadly, I am excited about the growth opportunities ahead, as our teams innovate and collaborate to connect our customers, viewers and guests to the moments that matter. The Paris Summer Olympics is a perfect example of this, where starting this Friday our company will be leveraging our most advanced technology and expertise in storytelling to provide millions of households in the U.S. with the finest, most expansive television and streaming coverage in media history for an Olympics or perhaps any televised event… and even more important, an experience they hopefully will never forget."

2nd Quarter 2024 Highlights:

• Adjusted EPS Increased 7.0% to $1.21; Generated Free Cash Flow of $1.3 Billion, Including a Tax Payment Related to the Previously Announced Hulu Transaction and Other Tax Related Matters
• Return of Capital to Shareholders Totaled $3.4 Billion Through a Combination of $1.2 Billion in Dividend Payments and $2.2 Billion in Share Repurchases
• Connectivity & Platforms Adjusted EBITDA Increased 1.6% to $8.5 Billion and Adjusted EBITDA Margin Increased 90 Basis Points to 41.9%, Its Highest on Record
• Continued the Successful Execution of Our Domestic Network Expansion and Upgrade Strategy; Expanded Deployment of Mid-Split Technology to 42% of Our Footprint; And Added 302,000 New Homes and Businesses Passed in the Second Quarter
• Domestic Broadband Average Rate Per Customer Increased 3.6%, Driving Domestic Broadband Revenue Growth of 3.0% to $6.6 Billion
• Domestic Wireless Customer Lines Increased 20% Compared to the Prior Year Period to 7.2 Million, Including Net Additions of 322,000 in the Second Quarter
• Business Services Connectivity Adjusted EBITDA Increased 4.4% to $1.4 Billion and Adjusted EBITDA Margin Was 57.0%
• Media Adjusted EBITDA Increased 9.0% to $1.4 Billion, Driven by Improved Performance at Peacock
• Peacock Paid Subscribers Increased 38.0% Compared to the Prior Year Period to 33 Million; Peacock Revenue Increased 28% to $1.0 Billion; Best Year-Over-Year Improvement in Adjusted EBITDA for Any Quarter Since Launch in 2020

2nd Quarter Consolidated Financial Results

Revenue decreased 2.7% compared to the prior year period. Net Income Attributable to Comcast decreased 7.5%. Adjusted Net Income and Adjusted EBITDA were consistent with the prior year period.

Earnings per Share (EPS) decreased 1.3% to $1.00. Adjusted EPS increased 7.0% to $1.21.

Capital Expenditures decreased 8.1% to $2.7 billion. Connectivity & Platforms' capital expenditures decreased 12.9% to $1.9 billion, reflecting lower spending on customer premise equipment and scalable infrastructure, partially offset by higher investment in line extensions and support capital. Content & Experiences' capital expenditures increased 4.4% to $845 million, primarily driven by investment in Theme Parks, which continues to reflect significant spending due to the construction of Epic Universe theme park in Orlando, which is scheduled to open in 2025.

Net Cash Provided by Operating Activities was $4.7 billion. Free Cash Flow was $1.3 billion, including a tax payment during the quarter related to the previously announced Hulu transaction and other tax related matters.

Dividends and Share Repurchases. Comcast paid dividends totaling $1.2 billion and repurchased 56.4 million of its shares for $2.2 billion, resulting in a total return of capital to shareholders of $3.4 billion.

Connectivity & Platforms

Revenue for Connectivity & Platforms was consistent with the prior year period. Adjusted EBITDA increased compared to the prior year period due to growth in both Residential Connectivity & Platforms Adjusted EBITDA and Business Services Connectivity Adjusted EBITDA. Adjusted EBITDA margin increased to 41.9%.

Total Customer Relationships for Connectivity & Platforms decreased by 275,000 to 51.7 million, primarily reflecting decreases in Residential Connectivity & Platforms customer relationships. Total domestic broadband customer net losses were 120,000, total domestic wireless line net additions were 322,000 and total domestic video customer net losses were 419,000.

Residential Connectivity & Platforms

Revenue for Residential Connectivity & Platforms decreased compared to the prior year period, reflecting decreases in video and other revenue, partially offset by increases in domestic broadband, domestic wireless and international connectivity revenue. Domestic broadband revenue increased due to higher average rates. Domestic wireless revenue increased primarily due to an increase in the number of customer lines. International connectivity revenue increased due to increases in broadband revenue from higher average rates and in wireless revenue, primarily reflecting higher sales of wireless services. Video revenue decreased due to a decline in the number of video customers, partially offset by an overall increase in average rates. Other revenue decreased primarily due to lower residential wireline voice revenue, driven by a decline in the number of customers. Advertising revenue was consistent primarily due to lower domestic nonpolitical advertising, offset by higher domestic political advertising.

Adjusted EBITDA for Residential Connectivity & Platforms increased due to lower operating expenses. Programming expenses decreased primarily due to a decline in the number of domestic video customers, partially offset by rate increases under our domestic programming contracts. Non-programming expenses were consistent primarily reflecting an increase in direct product costs, offset by lower marketing and promotion expenses. Adjusted EBITDA margin increased to 39.9%.

Business Services Connectivity

Revenue for Business Services Connectivity increased due to an increase in revenue from medium-sized and enterprise customers, and an increase in revenue from small business customers driven by higher average rates.

Adjusted EBITDA for Business Services Connectivity increased due to higher revenue, partially offset by higher operating expenses. The increase in operating expenses was primarily due to increases in direct product costs and technical and support costs. Adjusted EBITDA margin decreased to 57.0%.

Content & Experiences

Revenue for Content & Experiences decreased compared to the prior year period driven by Studios and Theme Parks, partially offset by growth at Media. Adjusted EBITDA for Content & Experiences decreased due to declines in Theme Parks and Studios, partially offset by growth at Media.

Media

Revenue for Media increased due to higher domestic distribution and international networks revenue, partially offset by lower other and domestic advertising revenue. Domestic distribution revenue increased primarily due to higher revenue at Peacock, driven by an increase in paid subscribers compared to the prior year period. International networks revenue increased primarily reflecting an increase in revenue associated with the distribution of sports networks. Other revenue decreased primarily due to lower revenue from licensing our technology. Domestic advertising revenue decreased primarily due to lower revenue at our networks, partially offset by an increase in revenue at Peacock.

Adjusted EBITDA for Media increased due to higher revenue and consistent operating expenses. The consistent operating expenses were due to decreases in marketing and promotion costs and programming and production costs, offset by an increase in other expenses, each primarily related to Peacock. Media results include $1.0 billion of revenue and an Adjusted EBITDA⁶ loss of $348 million related to Peacock, compared to $820 million of revenue and an Adjusted EBITDA⁶ loss of $651 million in the prior year period.

Studios

Revenue for Studios decreased primarily due to lower theatrical revenue and content licensing revenue. Theatrical revenue decreased primarily due to higher revenue from the volume and strength of theatrical releases in the prior year period, including The Super Mario Bros. Movie and Fast X. Content licensing revenue declined primarily due to the timing of when content was made available by our television studios.

Adjusted EBITDA for Studios decreased due to lower revenue, which more than offset lower operating expenses. The decrease in operating expenses primarily reflected lower programming and production expenses, mainly due to lower costs associated with theatrical releases.

Theme Parks

Revenue for Theme Parks decreased primarily due to lower revenue at our domestic theme parks, driven by lower guest attendance, as well as the negative impact of foreign currency at international theme parks.

Adjusted EBITDA for Theme Parks decreased, reflecting lower revenue, which more than offset lower operating expenses.

Headquarters & Other

Content & Experiences Headquarters & Other includes overhead, personnel costs and costs associated with corporate initiatives. Headquarters & Other Adjusted EBITDA loss in the second quarter was $198 million, compared to a loss of $200 million in the prior year period.

Eliminations

Amounts represent eliminations of transactions between our Content & Experiences segments, the most significant being content licensing between the Studios and Media segments, which are affected by the timing of recognition of content licenses. Revenue eliminations were $505 million, compared to $631 million in the prior year period, and Adjusted EBITDA eliminations were a benefit of $36 million, compared to a benefit of $56 million in the prior year period.

Corporate, Other and Eliminations

Corporate & Other

Corporate & Other primarily includes overhead and personnel costs; our Sky-branded video services and television networks in Germany; Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania; and Xumo. Corporate & Other Adjusted EBITDA increased primarily due to an increase related to Sky operations in Germany.

Eliminations

Amounts represent eliminations of transactions between Connectivity & Platforms, Content & Experiences and other businesses, the most significant being distribution of television network programming between the Media and Residential Connectivity & Platforms segments. Revenue eliminations were $1.3 billion, compared to $1.4 billion in the prior year period, and Adjusted EBITDA eliminations were a loss of $1 million compared to a benefit of $14 million in the prior year period.

Numerical information is presented on a rounded basis using actual amounts, unless otherwise noted. The change in Peacock paid subscribers is calculated using rounded paid subscriber amounts. Minor differences in totals and percentage calculations may exist due to rounding.

Conference Call and Other Information

Comcast Corporation will host a conference call with the financial community today, July 23, 2024, at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on our Investor Relations website at www.cmcsa.com. A replay of the call will be available today, July 23, 2024, starting at 11:30 a.m. ET on the Investor Relations website.

From time to time, we post information that may be of interest to investors on our website at www.cmcsa.com and on our corporate website, www.comcastcorporation.com. To automatically receive Comcast financial news by email, please visit www.cmcsa.com and subscribe to email alerts.

Caution Concerning Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements. In evaluating these statements, readers should consider various factors, including the risks and uncertainties we describe in the "Risk Factors" sections of our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and other reports filed with the Securities and Exchange Commission (SEC). Factors that could cause our actual results to differ materially from these forward-looking statements include changes in and/or risks associated with: the competitive environment; consumer behavior; the advertising market; consumer acceptance of our content; programming costs; key distribution and/or licensing agreements; use and protection of our intellectual property; our reliance on third-party hardware, software and operational support; keeping pace with technological developments; cyber attacks, security breaches or technology disruptions; weak economic conditions; acquisitions and strategic initiatives; operating businesses internationally; natural disasters, severe weather-related and other uncontrollable events; loss of key personnel; labor disputes; laws and regulations; adverse decisions in litigation or governmental investigations; and other risks described from time to time in reports and other documents we file with the SEC. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made, and involve risks and uncertainties that could cause actual events or our actual results to differ materially from those expressed in any such forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise. The amount and timing of any dividends and share repurchases are subject to business, economic and other relevant factors.

Non-GAAP Financial Measures

In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP). Certain of these measures are considered "non-GAAP financial measures" under the SEC regulations; those rules require the supplemental explanations and reconciliations that are in Comcast's Form 8-K (Quarterly Earnings Release) furnished to the SEC.

About Comcast Corporation

Comcast Corporation (NASDAQ:CMCSA) is a global media and technology company. From the connectivity and platforms we provide, to the content and experiences we create, our businesses reach hundreds of millions of customers, viewers, and guests worldwide. We deliver world-class broadband, wireless, and video through Xfinity, Comcast Business, and Sky; produce, distribute, and stream leading entertainment, sports, and news through brands including NBC, Telemundo, Universal, Peacock, and Sky; and bring incredible theme parks and attractions to life through Universal Destinations & Experiences. Visit www.comcastcorporation.com for more information.

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