Comcast Corporation

Good morning, ladies and gentlemen, and welcome to Comcast First Quarter 2022 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 Executive Vice President, Investor Relations, Ms. Marcia Reiviger. Please go ahead, Ms. Reiviger.

Thank you, operator, and welcome, everyone. Joining me on this morning's call are Brian Roberts, Mike Cavanaugh, Dave Watson, Jeff Schell, 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 remind 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. We 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 Roberts for his comments. Brian?

Thanks, Marcy, and good morning, everyone. 2022 is off to a great start. Each of our businesses posted healthy growth and adjusted EBITDA, contributing to a double-digit increase in adjusted EPS. as well as significant free cash flow generation in the quarter. And we achieved all of this while continuing to invest in our businesses for the long term, while also increasing our return of capital to shareholders. Our company has been at the forefront of innovation in connectivity and also in content. We have built a leading global technology platform which today delivers 5 billion entertainment streams a week, and 40 million voice commands a day across Comcast, Sky, and our current syndication partners. Yesterday's announcement highlights the value of what we've created. As you probably are aware, we formed a joint venture with Charter to offer our award-winning voice-controlled streaming platform across the United States, starting with Flex and X-Class TV, and to further develop this technology. Not only will we bring these products to millions of more customers, but we'll open the door to brand new revenue opportunities. And when you combine Charter's footprint with our current syndication partners in both the US and Canada, our retail distribution through Walmart, and Sky, which essentially runs off the same technology, we now have a truly global platform. This joint venture is a win-win. Consumers will get our proven world-class user and search experiences, simple content navigation, and more choice in the streaming marketplace. App developers, retailers, and hardware manufacturers will have access to one platform and one set of standards to quickly deploy their offerings across the U.S. And we'll be able to share in the investment and innovate alongside a partner we know well. Comcast and Charter have a track record of coming together to bring new products and technologies to consumers. Most notably, our mobile operating partnership from 2018 enabled both companies to bring greater value and a better experience that people love. The result is a more competitive wireless marketplace, and the service that we provide has been rated number one in customer satisfaction against all other mobile providers. Peacock also benefits from this joint venture, as it will be deeply integrated into the platform the way it is on X1 and Flex today, which will help expand Peacock's customer base more quickly and drive higher engagement, resulting in greater monetization for NBCUniversal. And we are doing all of this in the context of the investments we have already made in our technology and and within the guidelines we provided on our last earnings call with respect to our plans for programming investment. So let's come back to our achievements in the first quarter. Starting with broadband, we measured our success based on customer and financial metrics. And while we continue to compete aggressively in the current environment, we are striking what I believe to be the right balance between customer acquisition and long-term profitable growth. You can see with our first quarter results, where we added 194,000 customer relationships and 262,000 broadband subscribers, while on the financial side, cable generated 5% revenue and 6.5% adjusted EBITDA growth, with 44% adjusted EBITDA margins. Our distinct competitive advantage stems from our network, which has a level of flexibility that enables fast innovation and will be further enhanced through virtualization, an important stepping stone in our ultimate evolution to DOCSIS 4.0. Our path to ubiquitous multi-gig symmetrical speed is well underway. And in the next several years, when you collectively include Charter and Cox, the cable industry will be positioned to offer multi-gig symmetrical speeds to over 100 million homes throughout the United States over essentially the same DOCSIS 4.0 infrastructure. None of our competitors can say the same thing. For years, we focused on not only having a modern, high-capacity network, but importantly, we've also focused on providing our customers with cutting-edge technology in their homes to ensure that they have the best experience, which is a combination of fast speeds, full home coverage, cybersecurity, and control. together with fantastic streaming capabilities. During the quarter, we performed a number of successful tests on 10G equipment, and we launched our newest and most powerful X-Fi Gateway, which increases bandwidth in the home by three times and is the only modem that can support multi-gig symmetrical speeds to date. We're also enhancing the value of Xfinity broadband by bundling with mobile. offering our customers the convenience of one relationship for all their connectivity at a tremendous value. This contributed to even further improvement in broadband retention and our best quarter ever for Xfinity Mobile in terms of line net additions. We have a great wireless business and MVNO partner in Verizon and have opportunities to further improve our economics at Xfinity Mobile longer term. For example, our testing of deploying spectrum to potentially offload wireless traffic is progressing nicely. During the quarter, we turned up our first 5G radios, and we'll be launching an employee field test in June. Stepping back, the underlying theme in all of this and the core of our strategy is that we put the customer first, which drives our strong financial results. The investments we have made and continue to make are expressly meant to enhance the experience of every person that is connected to our products and services. To that end, we just had the highest level of customer satisfaction we have ever seen for a first quarter, and we maintained our positive trend in reducing both agent-handled interactions and truck roles, which declined 19% and 17% respectively. Let's switch to NBCUniversal. We had a lot of exciting things happen during the first quarter. For the first time in our history, we aired both the Super Bowl and the Olympics in the same week, affirming our expertise in production. During that period, I went to our facility in Stanford, Connecticut. I have to say I was so impressed by the hard work and the entire team working 24-7 around the clock, working in Beijing while being in Connecticut, providing a seamless broadcast for the Olympics. We sent some of our equipment to China when we thought our broadcast operations would be there, and on the fly, we had to figure out new ways to air this special event and not have a consumer know that was happening. Amazing how well the team managed the complexity, delivered an unbelievably high-quality product to hundreds of millions of viewers, and I think this will help innovate sports productions for years to come. We learned a lot about streaming from the last Olympics. And so when it came to Beijing, we provided a much improved experience on Peacock, which aired every single event for the first time, driving significant engagement. It really was an exceptional quarter overall for Peacock, with other big sporting events and content launches, including the Super Bowl, the debut of Bel Air, our most successful original to date, and a day-and-date release of Marry Me. Importantly, retention on our service, after airing all of this special content in such a concentrated period of time, was well above our expectation. We added 4 million paid subscribers to end the first quarter with over 13 million paid subscribers and 28 million monthly active accounts in the U.S. We've seen a 25% increase in hours of engagement year over year. Given the natural ebbs and flows of our content slate, we do not anticipate seeing this type of growth every quarter. We just expanded our total paid subscribers by over 40%, so we expect more modest subscriber gains until we get to the back half of this year. Our fourth quarter should be fantastic with sporting events such as Sunday Night Football, Premier League, and the World Cup, the pay-one availability of top universal titles like Minions, Rise of Gru, and Jurassic World Dominion, original series such as Vampire Academy, and for the first time starting this fall, Peacock will be the exclusive home of the next day NBC broadcasts. Our streaming strategy is differentiated, unique, because Peacock is a natural extension of our existing video businesses with two revenue streams and full integration across every aspect, whether it's programming, cross-promotion, or advertising. Peacock builds audiences... extends our reach, and creates new consumer experiences within our ecosystem, which should enable video to be a major long-term growth driver for NBCUniversal. Finally, the business we haven't talked enough about is theme parks, where the recovery continues to be fantastic. I'm particularly excited about the new attractions that we opened during the pandemic that many of our guests are now able to experience for the first time like Super Nintendo World in Japan, the amazing VelociCoaster in Orlando, pets in Hollywood, and, of course, Universal Beijing. Our investments are significantly expanding the potential of our theme park's business, which will remain an important and exciting growth engine for years to come. So Comcast is truly in a unique position of growing EBITDA, generating a robust level of free cash flow while making important organic investments in long-term growth initiatives and also increasing our return of capital to shareholders, which totaled $4.2 billion this quarter through a combination of $3 billion in buybacks and $1.2 billion in dividends, the largest return of capital for any quarter in our history. So off to a great start in the first quarter, and I'd like to now hand it over to Mike.