Comcast Corporation

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

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.

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. 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. First is that we are focused on shifting our business mix toward growth by investing in six areas where we're extremely well positioned. Residential broadband, wireless, business services, theme parks, streaming, and premium content in our studios. And we're seeing the effects of this strategy build as time passes. In this quarter, these six businesses represented 6% of total revenues, helping drive 2% EBITDA growth 5% adjusted EPS growth, and $5.4 billion of free cash flow. And second is our proven commitment to our capital allocation strategy, which balances robust, disciplined investment in these growth areas, 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. 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 in consumer and capital markets has meaningfully increased in the past several months. While we don't see any noteworthy evidence of economic challenges for the years thus far, the odds have increased that challenges may be approaching but we are well positioned to handle whatever lies ahead. 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. Today, we are 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. When you look at just the geographic markets we serve, our gig-capable converged footprint is more than double our competitors combined. And as we've discussed before, our network upgrade plans will ensure that our network leadership and product capability remain ahead of the competition. 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. 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. In fact, the latest fixed broadband report by OpenSignal ranks us highest in reliability in our footprint. And we continue to make this Wi-Fi experience even better an example being the recent launch of our most powerful gateway yet, the XB10, which enables industry-leading multi-gigabit symmetrical throughput and supports up to 300 connected devices with increased speeds and reduced latency. And the importance of Wi-Fi extends to our mobile service as well, as 90% of all mobile data, whether in or out of the home, travels over Wi-Fi. giving us another clear advantage. 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 Xfinity mobile devices to gigabit speed whenever customers are connected to one of our 23 million hotspots, regardless of their subscribed internet speed. This feature helped us earn the distinction of being the fastest mobile provider, according to Ookla's January 2025 speed intelligence report. 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. Dave and his team have worked hard to understand the reasons for this disconnect and have identified two primary causes. One is price transparency and predictability, and the other is the level of ease of doing business with us. The good news is that both are fixable, and we are already underway with execution plans to address these challenges. First are organizational changes. Steve Crone, who Dave appointed 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. 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. With decades of experience at Apple, Expedia, and DirecTV, 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. Second, we are simplifying our pricing construct to make our price-to-value proposition clear to consumers across all broadband segments. Just last week, we introduced our first-ever nationwide price guarantee for broadband that includes Xfinity'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. Customers who sign up for this plan also have the option to add a free mobile line for one year. 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. Third, we are driving growth in Xfinity Mobile. The benefits are clear as we see an 80% improvement in customer lifetime value when we add wireless service to our broadband-only customer relationships. 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-level products. This resulted in the best quarter of new wireless net additions in two years, bringing our total wireless lines to 8.1 million. And last week, we introduced our first ever premium unlimited wireless plan, delivering gigabit speeds with 4K ultra high definition streaming, more Wi-Fi hotspot data, advanced spam call protection, and a guaranteed device upgrade. 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. And while we are glad to be underway with a refreshed approach to the market, we anticipate that it will take several quarters for our new approach to gain traction and impact the business in a meaningful way. My second topic is business services, which has tremendous momentum and now accounts for almost 25% of the revenues of our entire connectivity business. 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 EBITDA growth and with margins in the high 50% range. Within the small and medium-sized business segments, 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. We remain excited about the opportunity to continue advanced product sell-in, including our cybersecurity services and Comcast Business Mobile. Within the enterprise solution segment, We are capitalizing on the significant opportunity to increase our market share and grow customer relationships. We've consistently grown sales and revenue in this segment in the high single digits. Today, our largest enterprise customers purchase over seven products from us. Connectivity 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. 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. We've done this through a mix of organic investment and M&A. The Masergy deal advanced our secure networking and global capabilities. and a NITEL acquisition, which closed on April 1st, builds upon this playbook, providing enhanced network aggregation capabilities, increases our channel presence, and provides more robust enterprise solutions. 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. 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. Epic Universe doubles the size of our park footprint in Orlando, transforming our collection of resorts into a week-long vacation destination. We have seen strong demand since launching Epic ticket sales in the fourth quarter of 2024, 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. 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. And in 2026, we will debut our first-ever Universal Kids Resort in Frisco, Texas. 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 openings scheduled for 2031. This park and resort will be located in Bedford, England, right outside London. 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 Luton Airport. 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.