Q1 2025 Comcast Corp Earnings Call
First Person Copyright 2021 **audio cut**
Speaker Change: Good morning ladies and gentlemen, welcome to Comcast's first quarter earnings conference call. At this time, Alpertist, Pinser, and Listen Only Mode. Please note this conference call is being recorded. I will now turn the call over to Executive Vice President and Vest Relations, Ms. Marci Ryvicker. Please go ahead, Ms. Ryvicker.
Thank you, operator, and welcome everyone.
Speaker Change: Joining us on today's call are Brian Roberts, Mike Cavanagh, Jason Armstrong, and Dave Watson. I will now refer you to slide two of the presentation accompanying this call, which can also be found on our investor relations website, and which contains our safe harbor disclaimer.
Speaker Change: This conference call may include forward-looking statements, subject to certain risks and uncertainties.
Speaker Change: In addition, during this call, we will refer to certain non-GAAP financial measures.
Mike Cavanagh: Please see our 8K and trending schedule issued earlier this morning for the reconciliation of these non-GAAP financial measures to gap. With that, I'll turn the call over to Mike.
Speaker Change: Good morning, everyone, and thank you for joining us. Before Jason gets into the details of our first quarter results, I would like to spend some time on three topics that are top of mind, convergence, business services and theme parks.
Speaker Change: and let me lead into those by anchoring the discussion in the two overarching elements of the management team's approach to running the company.
Speaker Change: First is that we are focused on shifting our business mix toward growth by investing in six areas where we're extremely well positioned. And we are focused on shifting our business mix.
Speaker Change: Residential broadband, wireless business services, theme parks, streaming, and premium content in our studios.
Speaker Change: and we're seeing the effects of this strategy build as time passes. [inaudible]
Speaker Change: In this quarter, these six businesses represented 7% of total revenues, helping drive 2% of $50 per cent adjusted EPS growth and $5.4 billion of free cash flow.
Speaker Change: The protection of one of the strongest balance sheets, if not the strongest balance sheet in the industry, and the return of substantial capital to shareholders.
Speaker Change: Together, our steady shift in business mix to a diverse group of growth areas, combined with our strong balance sheet, allows for steady execution against our strategy, even as the level of uncertainty and consumer and capital markets has meaningfully increased in the past several months.
Speaker Change: While we don't see any noteworthy evidence of economic challenges for the years less far, the odds have increased that challenges may be approaching, but we are well positioned to handle whatever lies ahead.
Speaker Change: Now let me hit the areas I'd like to comment on more deeply, starting with convergence, where as we've consistently highlighted, we are structurally positioned to win.
Speaker Change: Today we have the only operator offering gig internet and gig wireless ubiquitously to 64 million homes and businesses across 39 states, giving us the largest converged footprint in the country.
Speaker Change: When you look at just the geographic markets we serve, our gig capable converged footprint is more than double our competitors combined.
Speaker Change: And as we've discussed before, our network upgrade plans will ensure that our network leadership and product capability remain ahead of the competition.
Speaker Change: But the true measure of a customer's connectivity experience lies in its performance within their home, and that is where we excel given our superior Wi-Fi.
Speaker Change: Reliable connectivity throughout the home continues to be ranked as the most critical element influencing customers' choice of broadband service, and we lead the industry in delivering this experience.
Speaker Change: In fact, the latest fixed broadband report by Open Signal ranks as highest in reliability in our footprint.
Speaker Change: And we continue to make this Wi-Fi experience even better, an example being the recent launch of our most powerful Gateway yet, the XB-10, which enables industry leading multi-gigabits symmetrical throughput and supports up to 300 connected devices with increased speeds and reduced latency. [inaudible]
Speaker Change: and the importance of Wi-Fi extends to our mobile service as well as 90 percent of all mobile data whether in or out of the home travels over Wi-Fi giving us another clear advantage.
Speaker Change: We have the largest and fastest Wi-Fi network in the nation that delivers unique benefits to our customers with features like Wi-Fi PowerBoost, which automatically upgrades
Speaker Change: Regardless of their subscribed internet speed. This feature helped us earn the distinction of being the fastest mobile provider according to Euclis January 2025 Speed Intelligence Report.
Speaker Change: However, and this is a big however, in this intensely competitive environment we are not winning in the marketplace in a way that is commensurate with the strength of the network and connectivity products that I just described.
Speaker Change: Dave and his team have worked hard to understand the reasons for this disconnect and have identified two primary causes.
Speaker Change: One is price transparency and predictability, and the other is the level of ease of doing business with us.
Speaker Change: The good news is that both are fixable and we are already underway with execution plans to address these challenges.
First, our organizational changes.
Speaker Change: Steve Croney, who David pointed as chief operating officer of connectivity and platforms, is driving the changes in our go-to-market strategy and other operational improvements with the highest urgency.
Speaker Change: One of his first priorities was to recruit a growth focused leader, and we announced the hiring of John Gieselman to the newly created position of Chief Growth Officer of our Domestic Residential Business. [inaudible]
Speaker Change: With decades of experience at Apple, Expedia, and direct TV, managing world-class brands in highly competitive markets, John is a fantastic addition to the team and we're excited for him to join later this month.
Speaker Change: Second, we are simplifying our pricing construct to make our price-to-value proposition clear to consumers across all broadband segments.
Speaker Change: Just last week, we introduced our first ever nationwide price guarantee for broadband. That includes Xfinzi's best in class gateway and unlimited data for one simple monthly price that is locked in for five years with no annual contract required.
Speaker Change: Customers who sign up for this plan also have the option to add a free mobile line for one year.
Speaker Change: And we are not done providing more value to our customers with less complexity and friction is a top priority and you will see our go-to-market approach continue to evolve over the coming months.
Speaker Change: Third, we are driving growth in Exfinity Mobile. The benefits are clear as we see an 80 percent improvement in customer lifetime value when we add wireless service to our broadband-only customer relationships. [inaudible]
Speaker Change: We started prioritizing mobile attachment towards the end of the first quarter, offering one unlimited line free for 12 months for all new and existing broadband customers who take our traditional and premium mobile products.
Speaker Change: This resulted in the best quarter of new wireless net additions in two years bringing our total wireless lines to 8.1 million.
Speaker Change: And last week we introduced our first ever premium unlimited wireless plan delivering gigabits speeds with 4K ultra high definition streaming, more wide by hotspot data, advanced spam call protection and a guaranteed device upgrade.
Speaker Change: And with mobile penetration at only 13% of our residential broadband customer base, we have plenty of runway ahead to leverage wireless as a key component of our connectivity bundle with our industry leading broadband product.
Speaker Change: And while we are glad to be underway with a refreshed approach to the market, we anticipate that it will take several quarters for a new approach to gain traction and impact the business in a meaningful way.
Speaker Change: My second topic is business services, which has tremendous momentum and now accounts for almost 25% of the revenues of our entire connectivity business.
Speaker Change: We built business services which is now approaching a $10 billion revenue generator from the ground up, and have consistently outperformed peers with mid-single digit revenue and EBITDAG growth and with margins in the high 50% range.
Speaker Change: Within the small and medium-sized business segment, we are the market leader and have done a phenomenal job at deepening customer relationships. We've consistently grown ARPU in the mid-single digits for the last few years, with over half our small business relationships purchasing more than two products.
Speaker Change: We remain excited about the opportunity to continue advanced product selling, including our cybersecurity services and Comcast business mobile.
Speaker Change: Within the enterprise solution segment, we are capitalizing on the significant opportunity to increase our market share and grow customer relationships.
Speaker Change: We've consistently grown sales and revenue in this segment, in the high single digits. [inaudible]
Speaker Change: Today, our largest enterprise customers purchase over seven products from us.
Speaker Change: Conactivity is always going to be the core driver of our business. However, three years ago, for every dollar of connectivity we sold in the enterprise segment, we sold 20 cents of advanced solutions.
Speaker Change: Today, for every dollar of connectivity services we sell, we sell approximately 50 cents of advanced services further solidifying our right to win in the market and providing more value to customers.
Speaker Change: We've done this through a mix of organic investment and M&A.
The Masergy Deal advanced our security networking and global capabilities.
Speaker Change: and a NITEL acquisition, which closed on April 1, builds upon this playbook, providing enhanced network aggregation capabilities, increases our channel presence, and provides more robust enterprise solutions.
Speaker Change: My third and final topic is Theme Parks, which have been on an incredible growth trajectory, having generated $3 billion of EBITDA in 2024, up from around $1 billion 10 years ago, as a result of significant investment in the business along with the excellent execution by the team leading universal destinations and experiences.
Speaker Change: And now we are just four weeks away from the May 22nd grand opening of Epic Universe, our most ambitious and technologically advanced theme park to date. With iconic IP from Harry Potter, Dreamworks How to Train Your Dragon, horror with Dark Universe and Super Nintendo World. And now we are just four weeks away from the May 22nd grand opening of Epic Universe and Super Nintendo World.
Speaker Change: Epic Universe doubles the size of our Parkfoot print in Orlando, transforming our collection of resorts into a week-long vacation destination.
Speaker Change: We have seen strong demand since launching epic ticket sales in the fourth quarter of 2024.
Speaker Change: and the most recent reaction to early previews has been nothing short of phenomenal, with thousands of media stories, social posts, and fan reviews characterizing Epic as having groundbreaking creativity and taking immersive entertainment to a whole new level.
Speaker Change: Beyond Epic, we're continuing to grow our parks business across the United States, starting with Universal Horror Unleashed, our first permanent year-round horror entertainment experience opening in Las Vegas this August .
Speaker Change: And in 2026, we will debut our first-ever Universal Kids Resort in Frisco, Texas.
Speaker Change: And earlier this month, we announced plans to build our first ever universal theme park and resort in Europe with construction starting in 2026 and grand opening schedule for 2031.
Speaker Change: This park and resort will be located in Bedford, England, right outside London.
Speaker Change: The United Kingdom is an incredibly attractive market with its large population, a strong tourism industry, favorable transportation infrastructure, and close proximity to the rest of Europe , especially considering the announced expansion plans at nearby Lutin Airport.
Speaker Change: All these factors make this location an ideal one for Universal Theme Park and resort expansion into the European market. So those are some of my thoughts to frame today's call, and I will now turn the call over to Jason to provide a detailed overview of our first quarter results.
Jason Armstrong: Thanks Mike and good morning everyone. Let me start with a high level overview of our consolidated results before getting into more detail on our businesses.
Jason Armstrong: Consolidated revenue was in line with last year's first quarter. We've been clear and consistent that we're investing behind six major growth drivers, and these six grew at a mid-single digit rate and represented close to 60% of our total revenue in the quarter.
Jason Armstrong: Heavidah grew 2% this quarter, adjusted EPS, grew 5% to $1.9, and we generated 5.4 billion of free cash flow, and grew free cash flow per share by 26%. While returning 3.2 billion to shareholders, including 2 billion in share repurchases.
Jason Armstrong: Now turning to our businesses and starting with connectivity and platforms.
Jason Armstrong: I'd like to start with broadband, where the competitive environment remains intense.
Jason Armstrong: While we continue to see muted connect activity, we also saw a slight uptick and churn off of record low levels.
Jason Armstrong: This contributed to the loss of 199,000 customers in the quarter, while broadband are true, crew 3.3%, leading to growth in broadband revenue of 1.7%.
Jason Armstrong: As Mike mentioned, we feel great about our network position. Simply put, we can repeat really well against any technology out there.
Jason Armstrong: We feel equally great about our position in the home where our Wi-Fi coverage and control is second to none.
Jason Armstrong: and we're addressing current customer pain points and investing in go-to-market with a focus on pricing transparency and simplicity, a unified national approach, and more products translating into more value for our customers.
Jason Armstrong: This will require investment in the form of already launched long-term, all-inclusive price guarantees and other actions we will take in the coming months.
Jason Armstrong: Over time, this will help us mitigate customer turn from promotional roll-offs and better insulate our customer base.
Jason Armstrong: On convergence, we said we would lean into wireless, and the repositioning of our offers during the first quarter were evident in our results. We accelerated wireless net line additions to 323,000 in the quarter, both an improvement year over year and sequentially, bringing our total wireless lines to 8.1 million. We are now at the end of the quarter. We are now at the end of the quarter. We are now at the end of the quarter.
Jason Armstrong: And with penetration at just 13% of our residential broadband customer base, we have significant runway for growth and expect continued momentum in subscriber growth in the coming quarters.
Jason Armstrong: and the structure of our wireless business with a strong M&O partnership, industry leading offloading onto Wi-Fi, and an advantage in customer acquisition as we target our existing base.
Jason Armstrong: provides us solid profitability and wireless and the option to reinvest some of this profit as we lean in and accelerate the growth of our wireless customer base even more.
Jason Armstrong: At Business Services, both revenue and EBITDA grew roughly 4%. We have a leadership position amongst our peers when it comes to growth in this segment.
Jason Armstrong: and our strong performance this quarter was again driven by the framework that we've been operating in for some time. While we're experiencing an elevated level of competition in SMB, we continue to generate healthy revenue growth by driving higher adoption of our suite of advanced services. [inaudible]
which deepens the relationship with our large base of customers.
Jason Armstrong: Partners. Our enterprise segment is an even stronger contributor to growth, and one in which we are just scratching the surface. [inaudible]
Earlier this month, we closed our acquisition of Nytel.
Jason Armstrong: This is a great tuck-in acquisition of strengthens our ability to deliver advanced, reliable connectivity solutions, enhancing Comcast business's competitiveness in the managed services space.
Jason Armstrong: NITEL's Network Aggregation Capabilities, and Network as a Service Offerings, broaden our ability to service our customers, and their indirect channel distribution strategy magnifies our mid-market and enterprise presence.
Jason Armstrong: Our results in the second quarter will include NITEL, which we expect will add a few hundred basis points of revenue growth to business services, with a minimal impact on EBITDA growth in the air term.
Jason Armstrong: Putting all this together, overall connectivity and platforms revenue in the quarter remain consistent with the prior year, as 4% growth in our connectivity businesses, including residential broadband and wireless together with business services,
Jason Armstrong: was offset by revenue declines in video, advertising, and other. EBITDAQ grew 1.5% in the quarter, while margins expanded by 80 basis points.
Jason Armstrong: Reflecting the growth and continued benefit from our mixed shift to our connectivity businesses.
as well as our ongoing focus on operating efficiency.
Jason Armstrong: In content and experiences, there are several key items I would like to highlight. At Parks, we're really looking forward to Epic Universe. All of the earlier views have been spectacular, and we're incredibly excited for the transformation Epic will bring to visitors in the Orlando Market. Thank you very much.
Jason Armstrong: As we gear up for the May 22 opening, we incurred incremental costs which landed at about $100 million in the first quarter. This is in line with what we had previously communicated.
Jason Armstrong: Looking past these pre-opening costs, underlying results in the quarter indicated stable trends in Orlando, giving us confidence that we are entering the epic launch from a position of strength.
Jason Armstrong: In addition, performance at our international parks remains strong and within our expectations but we are seeing softness in Hollywood due to the aftermath of the wildfires and our proximity to these areas which impacted our results in the first quarter and we expect the recovery at Universal Hollywood to be a gradual one.
Jason Armstrong: Turning to studios results this quarter were driven by the strong carry over success of Wicked. After an impressive theatrical run, Wicked continued to deliver great results in premium window sales and became Peacock's most watched pay one movie.
Jason Armstrong: Looking ahead, we are excited to launch two of our three tentpole releases back to back in the coming months.
Jason Armstrong: First up is how to train your dragon on June 13th, followed by Jurassic World rebirth on July 2nd. In media, total advertising revenue was down 7%, mainly due to the volume and timing of sports content, along with tough political comparisons.
excluding this advertising was relatively flat. [inaudible]
Jason Armstrong: Well, we have not yet seen any impacts from the current macroeconomic uncertainty.
Jason Armstrong: Avertizing is the category that has shown the most economic-related cyclicality in our business historically.
Jason Armstrong: However, for the upfront and for the balance of the year, we feel well positioned in the market as we capitalize on the MBA launching on the fourth quarter, a healthy peacock subscriber base and a strong content offering across entertainment and news.
Jason Armstrong: Our overall media results this quarter were powered by the meaningful progress we are making in our pivot to streaming.
Jason Armstrong: Peacock delivered double-digit revenue growth and a more than 400 million year-over-year improvement in EBITDA losses.
Jason Armstrong: In part, due to lower expenses compared to last year when we stream the exclusive NFL wild part game, but also driven by the improved monetization of peacock paid subscribers.
Jason Armstrong: We ended the quarter 41 million paid subscribers, with net additions in the quarter driven by the entitlements from the charter bundle we introduced at the end of the quarter.
Jason Armstrong: When we launched Peacock in 2020, we anticipated that bundling would become an important piece of the streaming ecosystem.
Jason Armstrong: So we pursued a content strategy that would appeal to a broad audience.
Jason Armstrong: In addition to our pay one films coming from our studios, over 80,000 hours of entertainment content including originals and next day air content from NBC Broadcast and Bravo, a critical piece of that strategy is our focus on sports.
Jason Armstrong: Today, we offer more premium sports than any other streaming service, including the NFL, the Olympics, Premier League, Kentucky Derby, Big Ten, and then starting this fall, we look forward to adding the NBA. Okay.
Jason Armstrong: Summing it all up, our capital allocation priorities are centered on reinvesting around growth in six key categories and consistently returning significant capital to shareholders, including $13.1 billion returned over the past 12 months.
Jason Armstrong: We've been clear on the benefits of a strong balance sheet, cash flow and diversification, allowing us to invest consistently through various credit cycles, the pandemic, and importantly macroeconomic cycles, where we are broadly insulated and positioned to play offense.
Jason Armstrong: Our results in the first quarter underscore the success and the consistency of our strategy. We generated 5.4 billion in free cash flow while investing 2.9 billion in capital back into our businesses.
Jason Armstrong: At the same time, we maintained a healthy balance sheet ending the quarter with net leverage at 2.3 times while returning 3.2 billion to shareholders including 2 billion in share repurchases.
Marci, now over to you for Q&A.
Thanks, Jason. Operator, let's open the call for Q&A, please.
Jason Armstrong: Thank you. Would now begin the question and answer session. If you have a question, please press star to the number one under touch tone phone.
Jason Armstrong: If you wish to be removed from the queue, please press star of the number two.
Jason Armstrong: If you're using a speaker phone, you may need to pick up the hands that before pressing the numbers.
Jason Armstrong: Once again, if there are any questions, please press star at the number one under touch tone phone.
Speaker Change: Our first question today is coming from Craig Moffett from Muppernabance and Your Line Is Our Life.
Craig Moffitt: Hi, thank you. Two questions if I could. First, maybe thinking about the seam parks business a little bit.
Craig Moffitt: Mike, maybe could you just dig in a little bit more to what you're seeing now? We've seen—
Craig Moffitt: Some very significant drops in international travel to the United States, for example.
Craig Moffitt: and some anti-American sentiment even affecting travel patterns. I'm wondering if you can just...
Craig Moffitt: Share what you're seeing with respect to the same parks and how you think that might impact the 2025 results, even with Epic.
Craig Moffitt: and then for the broadband and wireless bundles that you're offering today, it's a question that everybody has been focused on on the wireless side. You guys are subsidizing handsets.
Craig Moffitt: If the price of handsets rises significantly with tariffs, would it be your anticipation that you would increase your subsidies accordingly, or would you expect to pass those higher costs on to customers? Yes, of course.
Mike Cavanagh: Hey Craig, so it's Mike, I'll start on parts and then hand it over to Dave. So on theme parks...
Mike Cavanagh: You know, our first quarter results, you know, continued to be, you know, stable in Florida, you know, we had pre-opening expenses for Epic Universe, but excluding that underlying trend, stable in Orlando, and then what we're seeing for advanced bookings, both ticket sales and hotel bookings are strong for the overall parks and for Epic. [inaudible]
Mike Cavanagh: So while I see the same headlines you're sort of seeing about airlines and the like.
Mike Cavanagh: Some of that might be outside the window of our booking windows, but what we're seeing continues to be tracking, you know, well, and to your point, some of that is definitely related to the excitement about epic.
Mike Cavanagh: without a doubt, which were reviews and pre-opening buzz is very strong and again ticket sales and advanced plans are, you know,
Mike Cavanagh: A little ahead of our expectations, and so we feel, you know, right now what we see is continued steadiness in the backdrop for parks. I think one thing that, you know, our domestic parks do draw a lot of folks.
from U.S.
Mike Cavanagh: and a lot of folks from markets in the South, in the case of Florida, that are not necessarily hopping on planes to get there, so there may be a delayed effect between what the airlines are starting to report on and what we see, but like I said, no real sign of that in our business as we sit here now. Thank you.
Mike Cavanagh: and then in LA it's all related to getting LA back. [inaudible]
Mike Cavanagh: to have in the tourism industry broadly recovered after the wildfires. And I think the whole market is continuing to see people staying away a little bit more than I think the leadership in LA broadly or us as a parks owner in that market. [inaudible]
Mike Cavanagh: would like it to be, but that's domestic parks and international trends, you know, for Japan and Beijing stable as well.
Let me start with...
Mike Cavanagh: and Packaging Approach Wireless is a huge piece of it, and we just...
Mike Cavanagh: You know, there are new offers at the end of Q1. They're a part of that are having one unlimited line free for 12 months and all new and existing broadband customers and you know taking traditional premium level products. So.
Mike Cavanagh: It resulted in a great quarter to start with, we're, you know, rolling here and we expect continued acceleration coming quarters with it. So we're leveraging Wi-Fi, it's a different experience.
Mike Cavanagh: with Power Boost and many other things that Mike and Jason talked about, so...
Mike Cavanagh: Their wireless base itself, their upgrading, and we're a great choice for bring your own device and so that is an option for us and all throughout this we want to be where the customer is and that's where we're constantly focused on that so when it comes to macroeconomic and other issues. [inaudible]
Mike Cavanagh: We have figured it out, whether it's competitive, intensity, we think we'll manage through it and we have good offers on devices, we'll see how things go but our core service offerings provide substantial value and that is our focus and we'll continue to be that.
Thanks, Craig. Operator, next question, please.
Speaker Change: Certainly, next question is coming from Jonathan Chaplin, from New Street, Research, Reline, is now live.
John Hodulik, John Hodulik, John Hodulik, John Hodulik
Speaker Change: Thanks guys, just one question from me. I'd love to get a sense in your project genesis markets. To what extent you're seeing benefits in terms of stronger growth ads, from the ability to offer faster speeds, lower churn, better R2, improved OPEX, etc.
Speaker Change: Well, it's an important part of our upgrade initiatives and it's helped us, you know, to take a core piece of our strategy as constant innovation and upgrades to existing services.
and so ...
That has been an important part.
of our positioning for a near-term and long-term.
Speaker Change: It's still, you know, as we have a substantial part of our market.
Speaker Change: that has already reached this point. Our main focus is I zoom out.
Speaker Change: You know, just a bit more in terms of broadband is really addressing, you know, the key pain points that both Mike and Jason talked about. That's, you know, where the focus is. The good news is
Speaker Change: You know, as you look at things in our network, journalists being a big part of it, positions is quite well, but broadband customers with us and more broadly across the industry are just doing more.
Speaker Change: and that's why we continue to invest in the service. It's for the long term. Ban With Consumption continues to be robust.
What we're doing is well on our end.
Speaker Change: in pricing transparency and the simplicity and easier doing business with us and that's what we're responding to and maybe one of the main points is with the price lock equipment inclusions all in pricing around that, free mobile lines and some other things that we have coming
Speaker Change: at this moment in terms of any of the turned benefits related to just a genesis. I think the paint points over time that we're addressing with the new go-to-market approach will be where the benefits will come from.
Thanks, Jonathan. Operator next question, please.
Speaker Change: Our next question is coming from Michael Ng from Goldman Sachre line of that line [inaudible]
Thank you.
Speaker Change: Hi, good morning, thanks for the question. I just have two as well. First on broadband, RPU is encouraging to see the 3.3% growth in the quarter. I was just wondering if you could talk about some of the drivers there. And then, you know, longer term as you talk about these. [inaudible]
Speaker Change: Go to market changes, the five-year price lock. Could you just talk about your outlook for what
Speaker Change: You know, for the three to four percent, you know, longer term, domestic broadband, RPU growth, like what's your commitment level there and how will some of the new pricing and packaging changes, if at all. Thank you.
Speaker Change: Michael is a Dave, so as I mentioned before, what we're trying to do, really focus on the pain points in this market.
Speaker Change: and with the five-year price lock, mobile inclusion, and simplicity of packaging multiple products together.
Speaker Change: We can execute this tactically, surgically. It did not view it as a broad repricing of our base. We think we can still drive healthy broadband R. Poo Grove.
Speaker Change: But these initiatives will require some investment, which in turn will impact our ability to grow EBITDA in the near future, but we view the impact as very manageable. Most important to us is what sits on the other side and how quickly we can get there.
Speaker Change: and that is a customer base with less pricing friction, even more stickiness.
Speaker Change: and a huge lever and wireless with our mobile product exposed to a much larger segment of our base in the ability to migrate this base into a still below market rate that has a lot of upside potential.
Speaker Change: and we'll have customers that have long-term certainty on pricing over time that is competitive with market rates, which means they're more satisfied, turn at a lower rate, and carry much higher customer lifetime value.
Speaker Change: and with this we'll have plenty of room to grow with our customers as they do more on our broadband network and engage more with us in wireless and other offerings.
as a company we've navigated plenty of changes before.
Speaker Change: This is the right change for our business in this moment and going forward and it's a change we can navigate in a very prudent way.
[inaudible]
Thanks, Mike. Great, thank you, Dave. Operator, next question, please.
Speaker Change: My next question is coming from Michael Rollins, and Steve, thank you for joining us.
Michael Rollins: Thanks, and good morning. Two questions as well for me. So first on broadband, just curious if you could discuss how much of the recent losses may be a function of slower industry growth.
Speaker Change: Given the maturation of the category relative to changes in market share, and if you're seeing differences in performance where you're in markets that have had fiber for some time versus those markets where fiber is just getting introduced. And then second on the mobile side.
Speaker Change: For the mobile growth standards, it's curious if you're seeing a mixed shift in terms of the percent that come from existing broadband customers versus new broadband customers and how you expect the new promotions to influence that. Thanks.
Michael: Michael, so let me start with broadband, I'll get to mobile.
The competitive environment remains intense as we talked about.
Michael: You know, it's got three national providers, six wireless, their net ads have stabilized, looks like in general, but they're still marketing very aggressively.
Michael: And as you mentioned, Fiber continues to overbuild, so we're dealing with that overbuild.
Jason Armstrong: Overall, we continue to see the impact of this muted connect activity. And as Jason noted, did see a slight uptick in turn this quarter, compared to the record low levels over the last few years, we've turned still below pre-pandemic levels.
Jason Armstrong: The churn increase was relatively broad-based, though, as we saw it across our footprint and in all segments of product mixes.
Jason Armstrong: But with a little more, it's in mobile substitution impact this quarter.
So...
Jason Armstrong: as that thus, you know, resulting in our actions and the game plan that we have to address.
or Competitiveness. [inaudible]
Jason Armstrong: Simplifying our go-to-market approach and leveraging mobile even more aggressively than we historically done. We've had success, some success, a buy-one get-one.
Jason Armstrong: This new mobile offering and including in a package and a simple the way that we have, I think is just going to add a lot of value,
Jason Armstrong: Competitive issues are across the board. In mobile, you know, it's, we've seen in terms of the mix.
Jason Armstrong: A healthy customer-based upgrade mix where we have a large upside, the percent of our customers, broadband customers that don't have our mobile product yet, we see that as a huge.
Jason Armstrong: Opportunity Over Time. That has been our focus of upgrade, but we're also competing fiercely for new customers and we're well positioned with bring your own device. Thanks.
Jason Armstrong: and these new packages are, I think, very going to be very appealing, you know, certainly with the one year included. And not asking the customer, it's included, it's part of the package.
Jason Armstrong: So, the other thing too, just to make sure everyone reminding people, we just announced this, that we've rolled out a new set of premium plans and mobile. We're interested in every segment.
and we'll compete for customers and broadband.
Jason Armstrong: Mobile Packaging, but the new premium mobile offerings, we think will help us compete.
Jason Armstrong: a little bit more effectively in the premium higher end as well. So...
Jason Armstrong: Really good news on that, really encouraged, it's only been a week or so since we've done it.
Jason Armstrong: But that would be, I think, a good option for our base. It would be a good option for existing mobile customers and will help us compete for new prospects.
Thanks, Mike. Operator, next question please.
Jason Armstrong: Certainly, our next question is coming from Ben Swinburne, from Morgan Stanley , your line is alive.
Thanks. Good morning.
Ben Swinburne: I'm curious if you guys have any update for us on how to think about peacock losses over the rest of this year. I was a Q1 big improvement year over year. Some of that might be timing, but be helpful if you could give us a little bit of an outlook for that business over the rest of 2025.
Ben Swinburne: and then kind of sticking with the steam on the on the pivot in the cable business or connectivity business.
Speaker Change: Jason, you mentioned the word investment a couple of times I think Dave you did too and one of your answers.
Speaker Change: We've sort of been accustomed to watching Comcast execute with sort of a priority or focus on arpeggroast.
Margin Expansion, and obviously we've seen the subscriber numbers. Thank you very much.
Speaker Change: You know, coming light over the last year or so.
Speaker Change: What would you tell us to think about at least over the next few quarters as you roll out these plans? It seems like you're already starting to see some wireless momentum and maybe there's some EBITDA pressure, but I just thought it'd give you an opportunity to maybe give us a little more help on how the rest of the year looks as you pivot the model in the business. Thanks a lot.
Mike Cavanagh: Hey, Ben, good morning, it's Mike. So I'll hit peacock. I think Jason covered a bunch of this and you touched it on yourself, but I think...
Mike Cavanagh: Looking at what Peacock is and what we've accomplished, continued strong revenue growth, so up 16%
Mike Cavanagh: on Revenue's Year Over Year. That's on the back of better monetization of subscribers. We took a price increase last year that stuck but obviously translates into impact on subscriber growth. [inaudible]
Mike Cavanagh: We've obviously taken in the charter subs, so overall we're scaling up the business.
Mike Cavanagh: and we're monetizing it well. And then, so that drove the 400 million of EBITDA growth together with the move of, or the absence of the NFL wild card game. So...
Mike Cavanagh: I think it shows the power of the team that's running peacock and all this have been focused on it.
Mike Cavanagh: is to keep driving towards improved monetization and build a product that, you know, we started late, but we started in 2020 with the view that will pursue a content strategy that builds on the strengths of NBC Universal Broadly.
Mike Cavanagh: So we've got 80,000 hours of entertainment, including our pay-one movies, next day NBC, Peacock, Illusionals, Bravo, and Library. But as we look ahead, we've got MBA coming, and Sports has been a very key driver of Peacock with NFL, the Olympics, Premier League.
Mike Cavanagh: The Derby coming up this weekend I think, Big Ten, you know, and that's been important, acquiring new subs, getting engagement with our subs, and leading to engagement in non-sports content.
Mike Cavanagh: So we continue to think that acquiring the rights to bring the NBA back to NBC and Peacock is a big deal. It's a big accomplishment, a big moment.
Mike Cavanagh: The team is working very hard to make sure, not just within sports
Mike Cavanagh: But across entertainment as well with the new audience that will bring in. [inaudible]
Mike Cavanagh: to over the years ahead and we have it for 11 years. [inaudible]
Mike Cavanagh: Make sure that we use NBA as a launch pad to further scale peacock.
Mike Cavanagh: and further monetize it. So I won't specifically talk about second half of this year next year, but I do think expect Peacock to be on a continuing trend of driving towards improved monetization, bigger scale, and therefore declining losses over time.
Mike Cavanagh: So that's the, and you zoom back out and you put peacock alongside the non-spinco media assets.
where they're handing glove in terms of the skills the DNA.
Mike Cavanagh: and the legacy together with the rights across entertainment, news, sports, reality, and the like.
Mike Cavanagh: and I think it's a business that we'll have some durability too and an ability to manage as one complete business over time. But I think expect us to continue to look to see, you know, improving trends in peacock as time passes.
Mike Cavanagh: Hey, Ben, let me hit the arpu and profitability question. So taking my cue from David a lot of what he said already. As he said, expect healthy broadband arpu growth this year. That's what we said on the fourth quarter call. Continue to believe that.
Mike Cavanagh: I think the real focus is setting ourselves up for long-term convergence, positioning, and revenue growth, and I think that's a lot of what you're seeing at this point. The wireless opportunity plays a big role in that. If you think about our ability to accelerate wireless, which we did in the quarter and expect to continue to do over the course of the year,
Mike Cavanagh: Yeah, we're putting in place an expansion of how we're thinking about wireless and extension of this into the base, 13% of our base has exposure to wireless right now. It's a fantastic product. So we want more of our base to have it and if you think about the pricing levers we're going to have over time as you get to the one year mark in the two year mark and. [inaudible]
Mike Cavanagh: and then all of a sudden start paying for it, but at rates that are substantially lower than they can get elsewhere. You know, we think that's a very good trade-off and provides for, you know, upside in the future as it relates to how we monetize convergence relationships. I think on the broadband side, Dave pointed to it, you know, as we look at competitive environment. [inaudible]
Dave Watson: Fiverr, you know, is what it is. It continues to creep into our footprint at three to four percent per year. That's no change from what we've seen in the past several years. We expect that to continue. [inaudible]
Speaker Change: But we've competed against Fiber for 20-plus years at this point. It's a very predictable pattern that we haven't really seen changing. It's sort of a pattern where the first three years there's significant market share gain and then it levels out.
Speaker Change: and the patterns we see in those markets, whether it's our own ARPU, you know, turn rates, you know, margins, et cetera, very much resemble our broader base. So it's a segment we know how to compete well against.
Speaker Change: I would tell you that the newer competitor in the last few years has obviously been fixed wireless.
Speaker Change: You know, they're adding a million subscribers per quarter, so that's sort of the competitive intensity.
Speaker Change: that we're seeing that's sort of incremental. We are competing aggressively with it, but if you think about the areas where fixed wireless has performed well, they're not leading with...
Speaker Change: Network, they're not leading with speed, they're not leading necessarily within home coverage, but they have a pricing construct in terms of...
Simplicity and ease of doing business.
that has resonated. [inaudible]
Speaker Change: That's exactly what we're going after, right? That's exactly what the changes in the last couple months have been, and you'll see incremental changes must go forward. So that's the investment activity we're talking about. Dave put some context around that and said, yeah, obviously this is going to make it more difficult to grow EBITDA this year. We effectively said that last quarter. I think that's where expectations are for us already.
Speaker Change: that are a heck of a lot more durable. They're on price plans that are sort of at market rates with long-term contractual guarantees. And then a discounted wireless offering that's more broadly exposed to our base gives us a heck of a pricing lever over time. Thank you for your time.
Thanks, Ben. Operator, next question, please.
Speaker Change: Certainly, our next question today is coming from Jessica Refurlet from Bank of America. Your line is now live.
Excuse me, a couple of questions on media.
Speaker Change: Couple of quarters ago, you said you were open to streaming consolidation. [inaudible]
Speaker Change: Can you give us your updated thoughts on that and maybe an update on timing of the cable spin co. You also announced this team park in the UK and other parks in the US. Could you talk about how you're thinking about the park with long-term time as you expand into new markets?
Speaker Change: And I guess finally, I think Jason mentioned that obviously the industry, not just you, was very vulnerable.
to this lack of visibility in changing economic environment. Thank you very much.
Speaker Change: Can you just talk about anything different than you're doing in your upfront approach? You've mentioned NBA several times as a big driver for advertising, but maybe talk about NBA overall.
Speaker Change: Clearly, you'll benefit on advertising and it's a positive for peacock long term. Can you help us frame the financial impact as these costs go up? Is there a affiliacy increase that goes along with that? Thank you.
Speaker Change: So there's a bunch there. Let me kind of tick through those. It's it's Mike Jessica. So partnerships on peacock, I you know, I think the point.
of my earlier commentary on peacock and what we've built. . .
Speaker Change: I think it is fair to say that the broad audience appeal a peacock with everything I described or pay one movies.
Speaker Change: You know, NBC next day, Content Bravo, the library, sports, including NBA, NFL, and the like, makes today strong element of any future consumer bundle.
Speaker Change: whether that be through bundles or partnerships. So point is, we're doing our thing to make peacock what we think will be strong in the marketplace.
Speaker Change: and if opportunities come along to partner up in bundles or otherwise, we'll be happy to consider those things if they make sense, but there's no news to report on that front.
Speaker Change: Spinco, your second one, Spinco, continues to no change in our expectation of timing, you know, around the end of the year.
Speaker Change: I think UK Parks, I just spent time answering another question, so I won't repeat myself, but I think we...
Speaker Change: I feel very strongly that the returns that we're getting given our position and strength.
Speaker Change: in the parks business as we know it today gives us the right and the opportunity to deploy capital in...
Speaker Change: Experience that will open in Vegas this year and the kids park.
Speaker Change: and Frisco, Texas next year. But we've looked around the world, you know, we're always looking for ways to put capital work in our growth businesses and the UK opportunity came along and we feel, you know, quite good about the prospects there. But I think
to answer the broad question which is...
Speaker Change: What's our plan for the parks business? I think the plan is to keep driving growth in a business that we think we're one of...
Speaker Change: You know, two players in a market that is within media, not at all exposed to the shift in time on screens from, you know, one venue to another. I mean, live experiences.
Speaker Change: Park's experiences, I've been thrilling to people and we think we lean into that and continue to do so.
Speaker Change: And then finally, up front's industry vulnerability, nothing really to add there. I think we had all things considered.
Speaker Change: But it may well be coming, so I think we've got a great team, live by Mark Marshall, running ad sales, I think we're coming up with...
Speaker Change: New products, new ways to leverage all the assets of NBC Universal as we go into the marketplace.
And then our content.
Speaker Change: All of it, but inclusive of the new content from NBA is going to be a key anchor of what we look to do around the up-fronts.
Speaker Change: and then, more broadly, as the future rolls in, and we look to monetize peacock, NNVC, and Bravo, the stronger the portfolio, the more we deserve to command in all forms of revenue monetization, but no news to point to there today.
Thanks, Jessica. Operator next question, please.
Speaker Change: Okay, your next question is coming from John Hodulik, and you'll be asked your line is not live.
Great, thank you. It made me back to Dave on Broadband.
Um, um,
Speaker Change: I'm just wondering if if the churn commentary that you guys talked about in the quarter and maybe what you're seeing in business, is there any sense that
Speaker Change: That can be driven by the slowing macro environment, you know, outside of what, you know, what you're missing on the media side, because it doesn't seem like the competitive environment really changed that dramatically. We went from sort of fourth quarter to the first quarter and then digging in a little bit on the business side. [inaudible]
Speaker Change: Is it just small business where you guys are seeing the relationship trends get worse? Are you seeing anything on the government side and can you talk a little bit about your government exposure after a rise and actually called out a little bit of weakness on the government side, given what's going on and spending there. Thanks.
Dave Watson: Mr. Dave, so you've talked about competition a lot. You know, the one thing I'll just highlight.
Dave Watson: The difference is an uptick, a little bit of a mobile substitution. That's the really Mike and Jason talked about. The fiber continued, three national, the fixed wireless stable but still marketing very aggressively. So I think that mobile substitution is the only difference and it's just an uptick there. It is in business services. [inaudible]
Dave Watson: I would say it's most certainly small business, there's pressure there in terms of relationships, but...
Dave Watson: Our strategy is broad-based in terms of revenue, generation, and every relationship, and even small business, we're adding a lot of products and services to those relationships, really encouraged by that, and our focus has continued to shift.
Dave Watson: You know, we're having done a nice job on in small business to mid and enterprise customers and that's where we're getting just a lot of traction as we provide complete answers for our customers in those segments as we...
Dave Watson: Duke, Conactivity, to Advanced Services, and adding a new part of the company night tell, which is great. So we're very excited about that, but the pressure is in small business.
Speaker Change: Thanks, John . That will be our last question from the analyst community. I want to now hand the call over to Brian for some closing remarks.
Brian Roberts: So listening to all this, let me let me first comment on broadband.
Brian Roberts: and just at my own view where we're clearly facing some challenges but as you've heard with a lot of passion the team has a sense of urgency and energy and focus to getting customer pain points resolved.
Brian Roberts: And while this may take a little time to fully take hold, our history of operational execution success would tell you that, well, sometimes we may not move first, once we get in motion, we do it extremely well.
Brian Roberts: We have real momentum in wireless and the path to continue to accelerate that.
Brian Roberts: As we've seen in the market, once it gets moving, it'll allow more creativity and marketing.
Brian Roberts: and we have an industry-leading growth in business services at scale and our investment to expand the opportunities and grow into new categories and make it a $60 billion dollar addressable market. Very excited about that.
Speaker Change: and Parks. I don't want to belated, but I just would invite all of you to come visit Epic soon. Bring your family, I think you're in for a great experience.
Speaker Change: And later this year, on the content side, we have a terrific movie slate, including Jurassic and Wicked.
Speaker Change: Amazing sports with the NBA as we just talked about, but also we broadcast the Super Bowl, the Winter Olympics, right at the same time, and the World Cup, which puts us in a very enviable position.
Speaker Change: I really like our strategy, our balance sheet strength. Regardless of global uncertainty, I feel we have a fantastic and unique company and quite optimistic.
Thanks everybody. Thank you everybody for joining us.
Speaker Change: Thank you. That concludes today's conference call. A replay of the call will be available starting at 11.30 a.m. Eastern time today on Comcast Invest Relations website. Thank you for participating. You may all disconnect.
[inaudible]
and many more. Thank you. Thank you.