Comcast Corporation

Good morning, ladies and gentlemen, and welcome to Comcast's first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. Please note that this conference call is being recorded. I will now turn the call over to Senior Vice President, Investor Relations, Ms. Marci Reibacher. Please go ahead, Ms. Reibacher.

Thank you, Operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Kavanaugh, Dave Watson, Jeff Schultz, and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff, and Dana will also be available for Q&A. Let me now refer you to slide two, which contains our safe harbor disclaimer and reminds you that this conference call may include forward-looking statements subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Robert for his comments. Brian?

Thanks, Marcy, and good morning, everyone. We certainly got off to a great start this year. Our entire company performed well, and we once again had particularly strong results at Cable, which posted its third consecutive quarter of double-digit EBITDA growth, ninth consecutive quarter of double-digit net cash flow growth. We added 461,000 broadband customers, which drove 380,000 customer relationship additions. This is the best first quarter on record. Our Connect activity was healthy and broadband churn improved for the 13th quarter in a row, hitting our lowest churn rate in our company's history. I'm very proud of this quarter's results and our long record of growth, which I believe is a direct result of disciplined investment, fantastic innovation, and consistent execution in a highly competitive market. This morning, I'd like to go a bit deeper in two areas, the robustness of our network in the U.S., and more broadly, how we positioned ourselves to successfully compete against alternative providers and technologies. We've spent nearly $30 billion in the last decade building an expansive, fiber-dense network comprised of 191,000 route miles that carries an immense amount of traffic and has demonstrated extraordinary performance throughout the pandemic. Under Tony Werner, our retiring Chief Technology Officer, we have consistently engineered our network to anticipate change. And during his 15-plus years at Comcast, He has helped transform us into a product and technology innovator and leader. Tony, we thank you. He's being succeeded by Charlie Herron. Many of you on this call are familiar with Charlie. He helped develop game-changing products, including Scaling X1, and most recently led the successful effort to redefine how we interact with customers, which has resulted in significantly higher NPS scores and lower operating costs. Charlie, Dave, and I have been fortunate to work together for 20 years. Under Dave and Tony, we've recruited the best engineering talent around the world and now are working as one global tech team to create platforms, apps, and experiences that evolve the way people connect and consume entertainment. We've done all this while keeping the network our number one priority. We've introduced the X-Fi Advanced Gateway. the most powerful of its kind. Our highest users are connecting a wide variety of devices in the home and streaming multiple services simultaneously over Wi-Fi. Our XFi pods integrate with Xfinity gateways to form a mesh network that maximizes Wi-Fi coverage. All you do is plug one of these pods into an outlet to get great coverage in every room. We provide our customers with what they need, which goes well beyond extraordinary connectivity and speed. Xfinity is the only broadband provider to offer advanced security for monitoring devices inside and soon outside of the home. We also uniquely provide our customers with a whole home speed test and enable parents to manage internet time spent by streaming application. This is all backed by a network that is built to consistently deliver the fastest speeds and outperform well into the future with two major initiatives underway. The first is virtualizing our network by leveraging artificial intelligence and machine learning. We're taking functions that were once performed by thousands of large and expensive pieces of hardware and moving them into the cloud, which alone has reduced innovation cycles from years down to just months. We're also automating many of our core network functions so that we can deliver instant capacity as well as identify and fix network issues before they ever affect a customer. Our second priority is further enhancing how we deliver our broadband product over our network. We currently offer downstream speeds of 1.2 gigs across our entire footprint using our DOCSIS 3.1 architecture and can increase upstream in a capital efficient way. We're making great progress to deliver multi-gig symmetrical speeds. And the last six months, we completed two important milestones on our roadmap. In October, we conducted a successful live test of 1.25 gig symmetrical speeds And earlier this month, our engineers completed the first-ever live lab test of DOCSIS 4.0, which establishes a foundation for us to deliver multi-gigabit speeds over our existing network without the need for massive digging and construction projects. Let me next talk about Xfinity Mobile, where we're having great success. This past quarter, we reached break-even on a standalone basis for the first time. and added 278,000 mobile lines, the highest quarterly addition since launch. We just announced a new unlimited family plan, which can provide $600 in annual savings relative to other competitor family plans. Now let's turn to Sky, which despite renewed lockdowns in Europe, generated revenue growth and delivered the best first quarter customer relationships net addition in six years. I am particularly encouraged by our strong performance in the UK. Excluding pubs and clubs, which remain closed, UK direct-to-consumer revenue grew 8% over the first quarter 2020 and 11% relative to 2019. Return continued to trend down. Two-thirds of our customer base in the UK now have SkyQ. We're seeing great acceleration in mobile. And we just launched SkyConnect, our B2B broadband service that leverages the expertise of Comcast Cable. Dana Strong is off to a great start and is syncing up more than ever with Comcast Cable and NBCUniversal so that together we're all innovating more quickly, better serving our customers and viewers, and increasing operating efficiencies. We're also encouraged by the trends we're seeing across NBCU. Our park segment broke even, excluding Beijing, for the second consecutive quarter, driven by remarkable attendance at Universal Orlando. We can see firsthand the pent-up demand for high-quality entertainment and family fun outside of the home, and we remain incredibly bullish on the park's business. While Osaka recently had to close temporarily, Universal Studios Hollywood reopened on April 16th, the first time since the pandemic started. Our long-term excitement stems from the fact that we have a fabulous roadmap of new attractions and experiences awaiting guests as they safely return to our current parks. In NBCUniversal's media segment under Jeff Schell and Mark Lazarus, we're starting to see the benefits of our new operating structure. Including Peacock, adjusted EBITDA increased 10% year over year. Our news content continues to experience tremendous momentum, and distribution revenue is trending above expectations, a testament to the strength of our linear brands. We're back in business on the studio side with more than 30 television series currently in production, and we're excited for our first big theatrical debut with Fast 9, launching in both the U.S. and China later in the second quarter. We're also making great progress with Peacock, our premium ad-supported streaming service. Just one year post-launch, we have 42 million sign-ups. Monthly users of the service are consuming nearly 20% more programming hours each month than our traditional audience on NBC. And we just crossed 1 billion total hours watched, nearly double our plan when we launched. This strength in users and engagement has enabled us to create additional advertising inventory outside of our initial partnership, with CPMs at a material premium, the linear prime time. Key to Peacock's domestic success has been Xfinity, with X1 and Flex driving subscriber acquisitions and healthy engagement. With Peacock, we've created great options for ourselves with several opportunities on the horizon. We've recently secured more original programming with creative partners like WWE and the NFL, providing a strong path to upsell into Peacock Premium. And as Peacock gains scale in the U.S., we see compelling ways we can expand internationally. We're looking to take advantage of the brand and scale of Sky across our European markets and potentially strike partnerships with local programmers and distributors in geographies where it makes sense. We plan to share more information on Peacock throughout this year. So in summary, we're all very proud and encouraged by our first quarter results. This performance is a testament to the resilience and evolution of our company. Excellent execution of our growth initiatives combined with tight cost control brings us one step closer to our balance sheet goals, and I am eager to see us return to our historical practice of repurchasing shares starting in the second half of this year. Lastly, I want to thank our team. Everyone across the company has continued to show up and innovate for our customers, audience, guests, and each other. We were recently named as one of the top five big companies to work for in the U.S. and one of the top ten inclusive companies in the U.K., a testament to the work and passion of our wonderful employees. Mike, over to you.