Comcast Corporation

Good morning, ladies and gentlemen, and welcome to Comcast's fourth quarter and full year 2023 earnings conference call. At this time, all participants are in 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. Marci Reivicker. Please go ahead, Ms. Reivicker.

Thank you, Operator, and welcome, everyone. Joining us on today's call are Brian Roberts, Mike Kavanaugh, 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. 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 schedule issued earlier this morning for the reconciliations of these non-GAAP financial measures to GAAP. With that, I'll turn the call over to Mike.

Thanks, Marcy, and good morning, everyone. We're less than a month into the new year, and 2024 is already off to a great start. Two weeks ago, our entire company came together to make history, shattering records with the first exclusively streamed NFL Wild Card game on Peacock. Nearly 23 million viewers watched the Kansas City Chiefs take on the Miami Dolphins, consuming 30% of all internet traffic in the U.S. and setting a new record in total U.S. internet traffic for any night. Our investment in the network and our technology platforms built over decades enabled us to shine, delivering a seamless experience on the internet in Peacock, demonstrating that our company is in an excellent position to win in this era of high bandwidth consumption. Also, Universal Pictures Oppenheimer picked up five Golden Globe Awards, including Best Picture, Best Director, Best Actor, Best Supporting Actor, and Best Original Score. So with 2024 off to a terrific start, let's look back at 2023, where we produced consistently strong financial results and continued to execute against our long-term strategy. We've positioned our company to benefit from a significant number of scaled and diversified growth opportunities that are margin accretive, namely residential broadband, mobile, business services, theme parks, studios, and Peacock. In aggregate, our revenue in these businesses grew 8% in 2023 and comprised 55% of our total revenue for the year. Our healthy cash flow generation and strong balance sheet have enabled the organic investment that fuels these businesses, and at the same time, fund substantial capital return, including significant share repurchases. All of this has translated into excellent financial performance. For the third consecutive year, we generated the highest revenue, adjusted EBITDA, and adjusted EPS in our company's history. Now let's go deeper on some of the important achievements during the year. I'm really proud of the progress we've made in our connectivity businesses. We maintained a strong trajectory in Xfinity Mobile, increasing our subscriber lines by 24% and total domestic wireless revenue by nearly 20%. We also performed well in our business services segment, which grew full-year revenue and EBITDA by nearly 5%, with margins approaching 60%. And we exceeded our goal of adding over one million new homes and businesses past and expect to do at or above this level in 2024. Our domestic broadband business remains strong. We kept our very large and healthy base of subscribers flat while growing residential ARPU 3.9%, the high end of our historical range, driving solid EBITDA growth in connectivity and platforms, and expanding margins to around 40% on an underlying basis. We achieved all of this despite an intensely competitive environment, and as I look back on 2023, I am confident that our strategy, combined with excellent execution, sets us up extremely well to navigate the road ahead. While the competitive environment is likely to remain at these levels for a period of time, broadband is still a very large, healthy, and profitable market, and the consumption trends that we're seeing are encouraging for the future. Customers are connecting more devices in their homes and are using them for applications that require more capacity, faster speeds, and lower latency. Our fiber-deep and capital-efficient network is more than ready to meet this demand with 100,000 miles of fiber and a clear path to offering multi-gigabit symmetrical speeds ubiquitously across our entire footprint with DOCSIS 4.0. I'd like to spend a minute briefly addressing the government's affordable connectivity program. First, it's important to note that we've built on our decade-long history in digital equity to effectively participate in ACP and have successfully leveraged the National Verifier Program in the process. While we hope that the White House and Congress renew this funding and keep these important resources available to the many people and households who have relied upon this program to stay digitally connected, we have already begun to communicate with ACP participants and will provide a range of options, including our highly successful Internet Essentials program, in the event that funding is discontinued. Shifting to contents and experiences, we've positioned ourselves to drive long-term profitable growth. Over the span of decades, we've built a remarkable portfolio of iconic content and strong franchises in both film and television, including live sports, news, and entertainment. Our market-leading businesses have tremendous reach and continue to perform and execute collaboratively, playing to our strengths by leveraging our IP and our incredible partners. Let's start with our studio group, where we hit a major milestone, ranking as the number one studio in film by worldwide box office, with hits such as Super Mario Brothers, Oppenheimer, Fast 10, and Five Nights at Freddy's. We're proud to work alongside our creative partners, like Christopher Nolan, Chris Melendandri, and Jason Blum, who are innovative industry leaders to develop content that continues to delight audiences. and I'm really excited about another fantastic film slate in 2024 with the latest installment of Kung Fu Panda in March, along with Despicable Me and Twisters in July, and Wicked slated for November, which will also benefit Peacock as these films and many others enter the pay-one window. At the same time, our media segment continues to deliver, reaching over 100 million households every quarter with leading sports, news, and entertainment. We have the number one most watched news organization in the U.S., and Sunday Night Football is pacing to be the most watched primetime show for an unprecedented 13th consecutive year. Peacock continues to be the fastest growing streamer in the U.S., a result of our holistic business model, which leverages all of our brands to serve a broad range of viewers by providing them with options to match their evolving habits. In the short period of time since we launched in 2020, we've seen strong momentum, ending the year at 31 million paid subscribers at a $10 ARPU, supported by healthy trends in both engagement and churn. And I'm excited for 2024. We started with a successful wildcard game, which will soon be followed by Oppenheimer coming exclusively to Peacock. and a full slate of both new and returning originals, such as Ted, Peacock's most watched original title, additional pay-one movies, and the Summer Olympics later this year. These next Olympic Games promise to be nothing short of spectacular, with the return of fans, this time to Paris, one of the most beautiful cities in the world. With the NBC Broadcast Network airing more content than ever before and Peacock as the streaming home for all games, NBCUniversal would be the most comprehensive Olympic destination in U.S. media history, with Xfinity once again playing a huge role in delivering each game on our Entertainment OS platform, which is now also available to charter customers through Zumo. At Parks, we achieved record high revenue and EBITDA in 2023 and have exciting new attractions and experiences in the years ahead. We'll open Donkey Kong, another Nintendo-themed land, next year in Osaka, which will expand Super Nintendo World by another 70%. We expect continuation of the strong trends in Hollywood, also driven by Super Nintendo World. and we'll see the completion of Epic Universe, our fourth gate in Orlando, prior to its grand opening in 2025. In summary, we are very pleased with all that we have achieved in 2023. We have incredible teams in each of our businesses and have executed against our plan exceptionally well, delivering very strong EBITDA, EPS, and free cash flow. Going forward, our highest priority is to continue our strong operational performance enabled by the investments we are making in our six key growth areas, fueling their growth and further improving the profile of our business mix. The strength and stability of our company, including our balance sheet, enables us to make these investments while also providing our shareholders with substantial capital returns. Since we started buying back stock in late May of 2021, We have repurchased approximately 15% of our total shares outstanding, and with today's announcement, we've now increased our annualized dividend by 150% since I joined the company in 2015. Putting it all together, our strategy is working, and we see many years ahead that this formula will continue to deliver for our company and shareholders. Jason, over to you.