PHILADELPHIA–(BUSINESS WIRE)–Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter ended September 30, 2023.
“We delivered strong financial results in the third quarter, while also investing in long-term growth, accelerating share repurchase activity and maintaining our healthy balance sheet,” said Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation. “Our strategic focus on innovation and financial discipline facilitated by consistent execution positions us competitively both now and into the future. Among the many highlights from across the company, we delivered another quarter of double-digit Adjusted EPS growth, continued to generate solid revenue growth in our connectivity businesses and expanded our Adjusted EBITDA margin at Connectivity & Platforms. We also reported the highest Adjusted EBITDA on record at Theme Parks; drove Oppenheimer to more than $900 million in worldwide box office – becoming the highest grossing biopic of all time; and materially improved Peacock paid subscriber and financial metrics compared to the prior year period as well as on a sequential basis.”
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($ in millions, except per share data) |
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3rd Quarter |
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Consolidated Results |
2023 |
2022 |
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Change |
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Revenue |
$30,115 |
$29,849 |
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0.9 |
% |
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Net Income (loss) Attributable to Comcast |
$4,046 |
($4,598 |
) |
NM |
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Adjusted Net Income1 |
$4,483 |
$4,220 |
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6.2 |
% |
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Adjusted EBITDA2 |
$9,962 |
$9,482 |
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5.1 |
% |
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Earnings (loss) per Share3 |
$0.98 |
($1.05 |
) |
NM |
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Adjusted Earnings per Share1 |
$1.08 |
$0.96 |
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12.5 |
% |
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Net Cash Provided by Operating Activities |
$8,154 |
$6,947 |
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17.4 |
% |
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Free Cash Flow4 |
$4,032 |
$3,387 |
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19.1 |
% |
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NM=comparison not meaningful. |
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| For additional detail on segment revenue and expenses, customer metrics, capital expenditures, and free cash flow, please refer to the trending schedule on Comcast’s Investor Relations website at www.cmcsa.com. | |||||||||
3rd Quarter 2023 Highlights:
- Consolidated Adjusted EBITDA Increased 5.1% to $10.0 Billion; Adjusted EPS Increased 12.5% to $1.08; Generated Free Cash Flow of $4.0 Billion
- Returned $4.7 Billion to Shareholders Through a Combination of $1.2 Billion in Dividend Payments and $3.5 Billion in Share Repurchases
- Connectivity & Platforms Adjusted EBITDA Increased 3.0% to $8.2 Billion and Adjusted EBITDA Margin Increased 80 Basis Points to 40.6%. Excluding the Impact of Foreign Currency, Connectivity & Platforms Adjusted EBITDA Increased 2.6% and Adjusted EBITDA Margin Increased 100 Basis Points
- Domestic Broadband Average Rate Per Customer Increased 3.9% and Drove Domestic Broadband Revenue Growth of 3.8%
- Content & Experiences Adjusted EBITDA Increased 10.2% to $2.0 Billion, Driven by Theme Parks and Moderating Peacock Losses
- Peacock Paid Subscribers Increased Nearly 80% Compared to the Prior Year Period to 28 Million, Including Net Additions of 4 Million in the Quarter. Peacock Revenue Increased 64% to $830 Million and Adjusted EBITDA Improved Compared to the Prior Year Period and Also on a Sequential Basis
- Oppenheimer Grossed More Than $900 Million in Worldwide Box Office in the Third Quarter; the Third Highest Grossing Film of the Year and the Highest Grossing Biopic of All Time
- Theme Parks Adjusted EBITDA Increased 20% to $983 Million, Its Highest Adjusted EBITDA on Record
Consolidated Financial Results
Revenue increased 0.9% compared to the prior year period. Net Income (Loss) Attributable to Comcast was $4.0 billion, compared to ($4.6) billion in the prior year period, which included goodwill and intangible asset impairment charges related to Sky. Adjusted Net Income increased 6.2%. Adjusted EBITDA increased 5.1%.
Earnings (loss) per Share (EPS) increased to $0.98, compared to ($1.05) in the prior year period. Adjusted EPS increased 12.5% to $1.08.
Capital Expenditures increased 18.0% to $3.3 billion. Connectivity & Platforms’ capital expenditures decreased 2.1% to $2.1 billion, reflecting lower spending on customer premise equipment and support capital, partially offset by higher investment in line extensions and scalable infrastructure. Content & Experiences’ capital expenditures increased 44.0% to $884 million, reflecting increased investment in constructing the Epic Universe theme park in Orlando, which is scheduled to open in 2025.
Net Cash Provided by Operating Activities was $8.2 billion. Free Cash Flow was $4.0 billion.
Dividends and Share Repurchases. Comcast paid dividends totaling $1.2 billion and repurchased 77.5 million of its common shares for $3.5 billion, resulting in a total return of capital to shareholders of $4.7 billion.
Connectivity & Platforms
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($ in millions) |
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Constant |
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3rd Quarter |
Currency |
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2023 |
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20225 |
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Change |
Change6 |
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Connectivity & Platforms Revenue |
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Residential Connectivity & Platforms |
$17,951 |
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$17,833 |
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0.7 |
% |
(0.4 |
%) |
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Business Services Connectivity |
2,320 |
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2,215 |
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4.7 |
% |
4.7 |
% |
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Total Connectivity & Platforms Revenue |
$20,271 |
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$20,048 |
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1.1 |
% |
0.2 |
% |
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Connectivity & Platforms Adjusted EBITDA |
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Residential Connectivity & Platforms |
$6,886 |
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$6,695 |
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2.9 |
% |
2.4 |
% |
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Business Services Connectivity |
1,335 |
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1,288 |
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3.6 |
% |
3.6 |
% |
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Total Connectivity & Platforms Adjusted EBITDA |
$8,221 |
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$7,983 |
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3.0 |
% |
2.6 |
% |
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Connectivity & Platforms Adjusted EBITDA Margin |
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Residential Connectivity & Platforms |
38.4 |
% |
37.5 |
% |
90 bps |
110 bps |
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Business Services Connectivity |
57.5 |
% |
58.2 |
% |
(70) bps |
(60) bps |
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Total Connectivity & Platforms Adjusted EBITDA Margin |
40.6 |
% |
39.8 |
% |
80 bps |
100 bps |
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Change percentages represent year/year growth rates. Change in Adjusted EBITDA margin is presented as year/year basis point changes. |
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Revenue for Connectivity & Platforms increased compared to the prior year period. Excluding the impact of foreign currency, revenue was consistent with the prior year period. Adjusted EBITDA increased due to growth in Residential Connectivity & Platforms Adjusted EBITDA and Business Services Connectivity Adjusted EBITDA. Adjusted EBITDA margin increased to 40.6%.
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(in thousands) |
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Net Additions / (Losses) |
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3rd Quarter |
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3Q23 |
3Q227 |
2023 |
20227 |
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Customer Relationships |
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Domestic Residential Connectivity & Platforms Customer Relationships |
31,722 |
31,928 |
(39 |
) |
(26 |
) |
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International Residential Connectivity & Platforms Customer Relationships |
17,958 |
17,884 |
74 |
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96 |
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Business Services Connectivity Customer Relationships |
2,640 |
2,621 |
5 |
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13 |
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Total Connectivity & Platforms Customer Relationships |
52,320 |
52,434 |
40 |
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83 |
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Domestic Broadband |
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Residential Customers |
29,779 |
29,835 |
(17 |
) |
10 |
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Business Customers |
2,508 |
2,507 |
(2 |
) |
10 |
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Total Domestic Broadband Customers |
32,287 |
32,342 |
(18 |
) |
19 |
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Total Domestic Wireless Lines |
6,278 |
4,948 |
294 |
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333 |
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Total Domestic Video Customers |
14,495 |
16,582 |
(490 |
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(561 |
) |
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Total Customer Relationships for Connectivity & Platforms increased by 40,000 to 52.3 million. Increases in international residential connectivity & platforms customer relationships as well as business services connectivity customer relationships were partially offset by a decrease in domestic residential connectivity & platforms customer relationships. Total domestic broadband customer net losses were 18,000, total domestic wireless line net additions were 294,000 and total domestic video customer net losses were 490,000.
Residential Connectivity & Platforms
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($ in millions) |
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Constant |
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3rd Quarter |
Currency |
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2023 |
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20225 |
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Change |
Change6 |
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Revenue |
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Domestic Broadband |
$6,366 |
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$6,135 |
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3.8 |
% |
3.8 |
% |
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Domestic Wireless |
917 |
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789 |
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16.2 |
% |
16.2 |
% |
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International Connectivity |
1,109 |
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842 |
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31.8 |
% |
25.2 |
% |
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Total Residential Connectivity |
8,393 |
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7,766 |
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8.1 |
% |
7.5 |
% |
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Video |
7,154 |
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7,428 |
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(3.7 |
%) |
(5.1 |
%) |
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Advertising |
960 |
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1,079 |
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(11.0 |
%) |
(12.4 |
%) |
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Other |
1,444 |
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1,561 |
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(7.5 |
%) |
(8.6 |
%) |
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Total Revenue |
$17,951 |
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$17,833 |
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0.7 |
% |
(0.4 |
%) |
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Operating Expenses |
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Programming |
$4,460 |
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$4,464 |
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(0.1 |
%) |
(1.3 |
%) |
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Non-Programming |
6,605 |
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6,674 |
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(1.0 |
%) |
(2.6 |
%) |
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Total Operating Expenses |
$11,065 |
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$11,138 |
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(0.7 |
%) |
(2.1 |
%) |
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Adjusted EBITDA |
$6,886 |
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$6,695 |
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2.9 |
% |
2.4 |
% |
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Adjusted EBITDA Margin |
38.4 |
% |
37.5 |
% |
90 bps |
110 bps |
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Change percentages represent year/year growth rates. Change in Adjusted EBITDA margin is presented as year/year basis point changes. |
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Revenue for Residential Connectivity & Platforms increased but was consistent with the prior year period when excluding the positive impact of foreign currency. Growth in residential connectivity revenue was driven by: international connectivity revenue due to an increase in broadband revenue and wireless revenue, reflecting higher sales of devices and wireless services, as well as the positive impact of foreign currency; domestic broadband revenue primarily due to higher average rates; and domestic wireless revenue primarily due to an increase in the number of customer lines. The growth in residential connectivity revenue was partially offset by: a decrease in video revenue due to a decline in the number of video customers, partially offset by an increase in average rates and the positive impact of foreign currency; lower advertising revenue primarily due to a decline in domestic political advertising; and lower other revenue primarily due to lower residential wireline voice revenue, driven by a decline in the number of customers.
Adjusted EBITDA for Residential Connectivity & Platforms increased due to higher revenue and lower operating expenses, which includes the impact of foreign currency. Programming expenses were consistent with the prior year period, driven by the decline in the number of domestic video customers, offset by domestic contractual rate increases, an increase in programming expenses for international sports channels and the impact of foreign currency. Non-programming expenses decreased primarily due to lower spending on marketing and promotion, lower fees paid to third-party channels related to advertising sales and lower technical and support costs. These decreases were partially offset by increased direct product costs associated with our wireless service, from increases in device sales and the number of customers receiving our wireless service, and our broadband services and by the impact of foreign currency. Adjusted EBITDA margin increased to 38.4%.
Business Services Connectivity
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($ in millions) |
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Constant |
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3rd Quarter |
Currency |
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2023 |
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20225 |
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Change |
Change6 |
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Revenue |
$2,320 |
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$2,215 |
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4.7% |
4.7% |
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Operating Expenses |
985 |
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927 |
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6.3% |
6.2% |
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Adjusted EBITDA |
$1,335 |
|
$1,288 |
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3.6% |
3.6% |
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Adjusted EBITDA Margin |
57.5 |
% |
58.2 |
% |
(70) bps |
(60) bps |
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Change percentages represent year/year growth rates. Change in Adjusted EBITDA margin is presented as year/year basis point changes. |
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Revenue for Business Services Connectivity increased due to an increase in revenue from small business customers, driven by higher average rates, and an increase in revenue from medium-sized and enterprise customers.
Adjusted EBITDA for Business Services Connectivity increased due to higher revenue, partially offset by higher operating expenses. The increase in operating expenses was primarily due to increases in direct product costs, technical and support expenses and costs related to our sales force. Adjusted EBITDA margin decreased to 57.5%.
Content & Experiences
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($ in millions) |
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3rd Quarter |
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2023 |
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20225 |
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Change |
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Content & Experiences Revenue |
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Media |
$6,029 |
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$6,005 |
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0.4 |
% |
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Studios |
2,518 |
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3,296 |
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(23.6 |
%) |
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Theme Parks |
2,418 |
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2,064 |
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17.2 |
% |
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Headquarters & Other |
13 |
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22 |
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(39.5 |
%) |
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Eliminations |
(419 |
) |
(909 |
) |
53.8 |
% |
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Total Content & Experiences Revenue |
$10,559 |
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$10,477 |
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0.8 |
% |
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Content & Experiences Adjusted EBITDA |
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Media |
$723 |
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$679 |
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6.5 |
% |
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Studios |
429 |
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551 |
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(22.2 |
%) |
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Theme Parks |
983 |
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819 |
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20.0 |
% |
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Headquarters & Other |
(178 |
) |
(199 |
) |
10.7 |
% |
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Eliminations |
17 |
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(59 |
) |
NM |
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Total Content & Experiences Adjusted EBITDA |
$1,973 |
|
$1,791 |
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10.2 |
% |
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NM=comparison not meaningful. |
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Revenue for Content & Experiences increased compared to the prior year period. Adjusted EBITDA for Content & Experiences increased primarily due to growth in Theme Parks and moderating Peacock Adjusted EBITDA losses.
Media
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($ in millions) |
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3rd Quarter |
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2023 |
20225 |
Change |
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Revenue |
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Domestic Advertising |
$1,913 |
$2,089 |
(8.4 |
%) |
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Domestic Distribution |
2,591 |
2,497 |
3.8 |
% |
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International Networks |
1,019 |
872 |
16.9 |
% |
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Other |
506 |
547 |
(7.6 |
%) |
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Total Revenue |
$6,029 |
$6,005 |
0.4 |
% |
|
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Operating Expenses |
5,306 |
5,326 |
(0.4 |
%) |
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Adjusted EBITDA |
$723 |
$679 |
6.5 |
% |
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Revenue for Media increased primarily due to higher international networks and domestic distribution revenue, partially offset by lower domestic advertising and other revenue. International networks revenue increased primarily reflecting an increase in revenue associated with the distribution of sports channels and the positive impact of foreign currency. Domestic distribution revenue increased primarily due to higher revenue at Peacock, driven by an increase in paid subscribers, partially offset by lower revenue at our networks. The decrease in domestic advertising revenue was 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 lower operating expenses. The decrease in operating expenses was due to lower marketing and promotion expenses. Programming and production costs were consistent, reflecting higher programming costs at Peacock and increased sports programming costs, offset by a decrease in content costs at our entertainment television networks. Media results in the third quarter include $830 million of revenue and an Adjusted EBITDA8 loss of $565 million related to Peacock, compared to $506 million of revenue and an Adjusted EBITDA8 loss of $614 million in the prior year period.
Studios
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($ in millions) |
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|||
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3rd Quarter |
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2023 |
20225 |
Change |
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Revenue |
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Content Licensing |
$1,691 |
$2,267 |
(25.4 |
%) |
|
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Theatrical |
504 |
673 |
(25.1 |
%) |
|
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Other |
324 |
356 |
(9.0 |
%) |
|
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Total Revenue |
$2,518 |
$3,296 |
(23.6 |
%) |
|
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|
Operating Expenses |
2,089 |
2,744 |
(23.9 |
%) |
|
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Adjusted EBITDA |
$429 |
$551 |
(22.2 |
%) |
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Revenue for Studios decreased primarily due to lower content licensing revenue and theatrical revenue. Content licensing revenue decreased primarily due to the timing of when content was made available by our television studios, including the impacts of the Writers Guild and Screen Actors Guild work stoppages in the current year period. Theatrical revenue declined primarily due to higher revenue from theatrical releases in the prior year period, including Minions: The Rise of Gru and Jurassic World: Dominion, partially offset by the successful performance of Oppenheimer in the current year period.
Adjusted EBITDA for Studios decreased due to lower revenue, which more than offset lower operating expenses. The decrease in operating expenses primarily reflected lower programming and production expenses, mainly due to lower costs associated with lower content licensing sales, including the impacts of the work stoppages in the current year period.
Theme Parks
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($ in millions) |
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|
3rd Quarter |
|
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2023 |
2022 |
Change |
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Revenue |
$2,418 |
$2,064 |
17.2% |
|
||
|
|
Operating Expenses |
1,435 |
1,244 |
15.4% |
|
||
|
|
Adjusted EBITDA |
$983 |
$819 |
20.0% |
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Revenue for Theme Parks increased driven by higher revenue at our international theme parks, which had COVID-19 related restrictions in the prior year period, and higher revenue at our domestic theme parks, including Universal Studios Hollywood due to the continued success of Super Nintendo World, partially offset by lower revenue at our theme park in Orlando which continued to be above comparable pre-pandemic 2019 levels.
Adjusted EBITDA for Theme Parks increased, reflecting higher revenue, which more than offset higher operating expenses. The increase in operating expenses was due to higher costs primarily associated with increased guest attendance.
Headquarters & Other
Content & Experiences Headquarters & Other includes overhead, personnel costs and costs associated with corporate initiatives. Headquarters & Other Adjusted EBITDA loss in the third quarter was $178 million, compared to a loss of $199 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 $419 million, compared to $909 million in the prior year period, and Adjusted EBITDA eliminations were a benefit of $17 million, compared to a loss of $59 million in the prior year period.
Corporate, Other and Eliminations
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($ in millions) |
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|
3rd Quarter |
|
|||||||
|
|
|
2023 |
|
20225 |
|
Change |
|
|||
|
|
Corporate & Other |
|
|
|
|
|||||
|
|
Revenue |
$643 |
|
$601 |
|
7.0 |
% |
|
||
|
|
Operating Expenses |
893 |
|
919 |
|
(2.9 |
%) |
|
||
|
|
Adjusted EBITDA |
($249 |
) |
($318 |
) |
21.6 |
% |
|
||
|
|
|
|
|
|
|
|||||
|
|
Eliminations |
|
|
|
|
|||||
|
|
Revenue |
($1,358 |
) |
($1,277 |
) |
6.3 |
% |
|
||
|
|
Operating Expenses |
(1,375 |
) |
(1,303 |
) |
5.5 |
% |
|
||
|
|
Adjusted EBITDA |
$16 |
|
$26 |
|
36.5 |
% |
|
||
|
|
|
|
|
|
|
|||||
Corporate & Other
Corporate & Other primarily includes overhead and personnel costs; certain Sky operations; Comcast Spectacor, which owns the Philadelphia Flyers and the Wells Fargo Center arena in Philadelphia, Pennsylvania; and Xumo, our consolidated streaming platform joint venture beginning in June 2022.
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 $1.4 billion, compared to $1.3 billion in the prior year period, and Adjusted EBITDA eliminations were a benefit of $16 million compared to a benefit of $26 million in the prior year period.
| Notes: | |
| 1 |
We define Adjusted Net Income and Adjusted EPS as net income attributable to Comcast Corporation and diluted earnings per common share attributable to Comcast Corporation shareholders, respectively, adjusted to exclude the effects of the amortization of acquisition-related intangible assets, investments that investors may want to evaluate separately (such as based on fair value) and the impact of certain events, gains, losses or other charges that affect period-over-period comparisons. See Table 5 for reconciliations of non-GAAP financial measures. |
| 2 |
We define Adjusted EBITDA as net income attributable to Comcast Corporation before net income (loss) attributable to noncontrolling interests, income tax expense, investment and other income (loss), net, interest expense, depreciation and amortization expense, and other operating gains and losses (such as impairment charges related to fixed and intangible assets and gains or losses on the sale of long-lived assets), if any. From time to time, we may exclude from Adjusted EBITDA the impact of certain events, gains, losses or other charges (such as significant legal settlements) that affect the period-to-period comparability of our operating performance. See Table 4 for reconciliation of non-GAAP financial measure. |
| 3 |
All earnings per share amounts are presented on a diluted basis. |
| 4 |
We define Free Cash Flow as net cash provided by operating activities (as stated in our Consolidated Statement of Cash Flows) reduced by capital expenditures and cash paid for intangible assets. From time to time, we may exclude from Free Cash Flow the impact of certain cash receipts or payments (such as significant legal settlements) that affect period-to-period comparability. Cash payments related to certain capital or intangible assets, such as the construction of Universal Beijing Resort, are presented separately in our Consolidated Statement of Cash Flows and are therefore excluded from capital expenditures and cash paid for intangible assets for Free Cash Flow. See Table 4 for reconciliation of non-GAAP financial measure. |
| 5 |
Beginning in the first quarter of 2023, we changed our presentation of segment operating results around our two primary businesses, Connectivity & Platforms and Content & Experiences. We have updated certain historical information as a result of these changes, including: (1) presentation of Cable Communications results in the Residential Connectivity & Platforms and Business Services Connectivity segments and (2) presentation of Sky’s results across the Connectivity & Platforms and Content & Entertainment segments, and Corporate & Other. |
| 6 |
Constant currency growth rates are calculated by comparing the results for each comparable prior year period adjusted to reflect the average exchange rates from each current period presented, rather than the actual exchange rates that were in effect during the respective periods. See Table 6 for reconciliations of non-GAAP financial measures. |
| 7 |
Customer metrics for 2022 have been updated to reflect the new segment presentation, and to align methodologies for counting business customer metrics to: (1) include locations receiving our services outside of our distribution system and (2) now count certain customers based on the number of locations receiving services, including arrangements whereby third parties provide connectivity services leveraging our distribution system. These changes in methodology were not material to any period presented. Previously reported total Sky customer relationships of approximately 23 million as of December 31, 2022 also included approximately 5 million customer relationships outside of the Connectivity & Platforms markets. |
| 8 |
Adjusted EBITDA is the measure of profit or loss for our segments. From time to time, we may present Adjusted EBITDA for components of our reportable segments, such as Peacock. We believe these measures are useful to evaluate our financial results and provide a basis of comparison to others, although our definition of Adjusted EBITDA may not be directly comparable to similar measures used by other companies. Adjusted EBITDA for components are generally presented on a consistent basis with the respective segments and include direct revenue and operating costs and expenses attributed to the component operations. |
Numerical information is presented on a rounded basis using actual amounts. Minor differences in totals and percentage calculations may exist due to rounding.
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.
