Comcast Corporation

Good morning, ladies and gentlemen. Welcome to Comcast's second 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. Marcy Reitviger. Please go ahead, Ms. Reitviger.

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 thanks for joining us. Before I hand it to Jason, I want to talk about three things that are particularly significant this quarter related to several of the strategic priorities of the company. First is our broadband business, where we continue to roll out our new go-to-market strategy in a highly competitive environment. Second is our theme parks, where we successfully opened Epic Universe in Orlando, one of the largest and most ambitious projects in our history. And third is our media segment, where our extraordinary mix of live events, sports, and entertainment across NBC and Peacock led to a record-breaking upfront as we continue to execute on our strategy of running NBCUniversal's linear and streaming assets as one holistic media business. So let me start with broadband. We've taken a hard look at what it takes to compete and win, and we start with great confidence that our products and network are marketplace leaders. That includes our AI-powered entertainment OS, the most intelligent Wi-Fi network in the country, and a mobile service delivering the fastest speeds in our footprint. We're proud that we've re-energized a culture that drives innovation, one that continues to set our products and services apart. Building on that foundation, we took several important steps this quarter to strengthen our position. Our goal for all the actions we've taken is to build a loyal customer base that churns less and values our services more by, one, delivering simple, predictable, and transparent pricing, and, two, making it easier than ever to do business with us. Specifically, we've realigned our pricing strategy around seven main elements. First, we've moved from local offers to a consistent national pricing structure. Second, we simplified our broadband offering with four flagship speed tiers. Third, everything is included. All packages come with unlimited data and are advanced gateways. which deliver the fastest, most reliable Wi-Fi experience, enable the connection of hundreds of devices, provide low-lag internet for gaming and streaming, and feature advanced Wi-Fi controls and cybersecurity protection. Fourth, we've lowered everyday pricing. Fifth, we introduced both one-year and five-year price guarantees without contracts to give customers more choice and certainty. Sixth, we're including a free Xfinity mobile line for one year for all new and existing customers. And finally, we introduced our premium unlimited mobile plan, which includes 4K Ultra HD streaming, expanded mobile hotspot usage, and device upgrades. But in addition to pricing changes, we focused on making it easier to do business with us. We are incredibly focused on reducing friction across all of our channels, .com, phone, chat, and our app, and making every customer interaction an excellent and personalized experience. For instance, we recently improved our digital buy flow by removing five steps, making the purchase process faster and easier, which has already driven more than a 20% improvement in purchase conversion rates. We also recently upgraded the operating system that manages our customer interactions to Google's AI platform, which will significantly improve our digital experience and route customers quickly to the support they need, providing our teams with full visibility into each customer interaction. Together, these changes we are making in pricing transparency and ease of doing business are starting to drive the results and customer behavior we are aiming for. Customers are responding to the simplicity and power of these changes with roughly half of our eligible new customer connects choosing our five-year price guarantee this quarter. We also posted a 20% increase in the percentage of new customers taking Gig Plus speeds, which lifted our overall speed tier mix and helped drive higher connect ARPU. And we're also seeing stabilization in voluntary churn and overall connect activity in broadband. Momentum is building in wireless as well. Our free line offer and solid uptake in our new premium unlimited plans help drive our best quarter ever with 378,000 new lines added, bringing Xfinity Mobile to 14% penetration of our residential broadband base and still leaving us with plenty of room to run. Before we leave broadband, I want to highlight a recent deal on the Comcast business side that strengthens our go-to-market approach for that customer base. Just last week, we announced a new MVNO agreement with T-Mobile in partnership with Charter. This new agreement pairs our industry-leading broadband and Wi-Fi with T-Mobile's 5G network to expand our mobile product offer to business customers as a fully integrated solution. We are pleased to work with T-Mobile in this initiative and continue to value our strong partnership with Verizon. So the net of this is, while it's still early days, we like what we are seeing in our broadband business, giving us confidence in the changes that we've made and what's still ahead. We're executing on a connectivity strategy that fully plays to our strengths in broadband, Wi-Fi, and convergence, leveraging the largest gig speed broadband and mobile converged footprint in the country, that serves both residential and business customer segments and a best-in-class in-home experience through our advanced Xfinity Wi-Fi gateway. With our go-to-market strategy in place and execution improving, we're well positioned to lead in convergence. Turning to parks, we are extremely proud of the successful opening of Epic Universe in May. We're pleased with the early results as Epic is already driving higher per cap spending and attendance across the entirety of Universal Orlando Resort, with strong food and merchandise sales and minimal impact on attendance at Universal Studios Florida and Islands of Adventure. Epic is the most technologically advanced park we've ever built, and we are getting high praise for the innovative attractions, immersive environments, three new onsite hotels, and our strong food and merchandise offering. As expected, our near-term focus is on expanding ride throughput to reduce early attendance constraints. Epic is trending in line with our expectations and well on its way to transforming Universal Orlando into a true week-long destination. Beyond Orlando, we're executing against a strong pipeline of new opportunities to serve more guests. Universal Horror Unleashed opens in Las Vegas next month, and we're developing a second year-round horror experience in Chicago, tapping into one of the country's top tourist markets. In addition, in Texas, our Universal Kids Resort is moving towards a 2026 opening, and we're continuing the planning process for our new park outside of London slated to open in 2031. These projects reflect our long-term strategy to expand reach, enter new markets, and broaden the appeal of our parks portfolio. Turning to media, our world-class combination of entertainment content and live sports and events continues to drive results across NBC and Peacock. We just closed our most successful upfront ever with record total sales and our largest sports commitments to date. Peacock was a standout, up more than 20% year over year, and representing over a third of NBC Universal's total volume. Our upfront results reflect our unparalleled 2026 lineup of tentpole events, starting with the Milan Cortina Olympics, Super Bowl 60, and the NBA All-Star Game in February, the FIFA World Cup on Telemundo in June, and the elections and BravoCon in November. along with a robust slate of entertainment and sports content throughout the year. We also expect to build on the momentum we are seeing in our entertainment content. Love Island USA, which appeared exclusively on Peacock, was the top streaming reality series for the entirety of its Season 7 run. It attracted a significant number of first-time subscribers and, importantly, two-thirds of those new paying customers went on to engage with additional content, driving a lift in overall consumption across the platform. Peacock continues to differentiate itself with one of the most robust live sports offerings of any streamer, and that position will only strengthen with the addition of NBA coverage this fall. In fact, in 2026, Peacock will stream more live sports hours than any other streaming entertainment service. Add to that pay one films from our top performing studios, original series, next day NBC and Bravo content, news, and a full entertainment library, and Peacock continues to deliver significant value. To better reflect this premium content, we recently announced a $3 price increase rolling out in July for new subscribers and in late August for existing ones. The impact of this price increase, combined with the strong upfront results I just discussed, helped position us in the fourth quarter as we launched the NBA and take on higher sports program expenses, particularly in the first year of the NBA contract when we absorbed the full impact of adding these new rights. So to wrap up, across the company, we're executing with focus, simplifying how we operate, and leaning into areas where we have real competitive advantages. and we're doing it while maintaining a strong balance sheet and returning meaningful capital to shareholders. We feel great about the momentum we're building and confident in our ability to create long-term value. With that, I'll turn it over to Jason.