Good morning, ladies and gentlemen, and welcome to Comcast's Fourth Quarter and Full-Year 2024 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. Marci Ryvicker. Please go ahead, Ms. Ryvicker.

Thank you, operator, and welcome, everyone. Joining us on today's call are Brian Roberts, Mike Cavanagh, Jason Armstrong and Dave Watson. I will now refer you to Slide 2 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 8-K 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, everybody, and thanks for joining us. We are very proud that the company produced record revenue of $124 billion and record adjusted EBITDA of $38 billion in 2024. In addition, we grew adjusted EPS by 9% and generated substantial free cash flow of $12.5 billion. This is despite the intense competition and strategic challenges that we faced across our businesses. And in our Residential Connectivity business, in particular, broadband revenue grew 3% for the year. And convergence revenue, which we define as domestic broadband and wireless revenue, grew nearly 5%, which is among the best performance across the converged players, despite our incumbent status in broadband and as we faced continued overbuilding, fixed wireless expansion and the challenges associated with the end of the ACP program. As you've already seen in our earnings release, net broadband subscriber additions were negative 139,000 in the fourth quarter, which is disappointing and worse than what we indicated in early December. Dave will discuss in more detail when we get to Q&A, but in short competitive conditions remain intense, dynamic and varied across our footprint and customer segments, and we see no signs of this changing in the near term. Dave is not sitting still in this environment, and he will discuss later in the call the actions that his team has underway. But let me be clear that all of us continue to strongly believe in the long-term opportunity for our Connectivity business despite the need to adjust to the ever-evolving competitive environment. Zooming back out, in 2024, we made substantial progress in each of our six growth businesses. To run through each one briefly, first, residential domestic broadband revenue grew 3%, as I just mentioned. Second, in wireless, revenue grew at a mid-teens rate, and we added another 1.2 million lines, taking us to 7.8 million as of year-end and to 12% penetration of our broadband customer base. Third, we delivered strong results in Business Services, growing revenue and EBITDA at mid-single digit rates. And we continue to identify new growth opportunities like our recently announced plans to acquire Nitel, which will enhance our capabilities to serve multisite enterprise and mid-market businesses. Today, Comcast business is nearly $10 billion in revenue and a $60 billion addressable market in the U.S. Fourth, in streaming, we achieved a $1 billion improvement in Peacock EBITDA losses and delivered on the promise of streaming with the excellent execution of the Paris Olympics. Fifth is our Studio business, where we rank second in global box office, making it the third year in a row where we've been either #1 or #2. And our TV studios ended the broadcast season with more top 10 series than any other studio. And finally, in our Destinations & Experiences business, we finished the year strong across our parks globally after having experienced some temporary headwinds in the middle of the year. Our team stayed hard at work preparing for the opening of Epic Universe in May of this year. Now turning to 2025. Our plans call for us to make progress on all of these fronts again, but let me highlight two areas for deeper commentary. First is Dave's action plan behind the commitment to drive continued growth in broadband and convergence revenue. We will lean into wireless more than ever before. We are the challenger in a market that is 2.5 times the size of broadband with a capital-light strategy that does not require network trade-offs. Wireless is a meaningful differentiator as our converged offers provide great savings to the consumer. And so you will see us shift our strategy to package mobile with more of our higher-tier broadband products, both for new and many of our existing customers. In addition, we will be capitalizing on our broadband and WiFi network capabilities by automatically boosting the speeds of Xfinity Mobile customers by up to 1 gig whenever they connect to our 23 million WiFi hotspots, which is the largest and fastest WiFi network in North America...

Thanks, Mike, and thank you, everyone, for joining us. I want to start with a high-level overview of our consolidated results. Total revenue grew 2% for both the fourth quarter and the full-year with our six major growth drivers, including residential broadband, wireless, Business Services Connectivity, Theme Parks, streaming and premium content in our Studios increasing at a mid-single-digit rate and now comprising close to 60% of our total revenue. On a reported basis, we grew EBITDA 10% to $8.8 billion for the fourth quarter and 1% to $38.1 billion for the full-year. Excluding severance and other in both years, EBITDA grew 8% in the quarter and 1% for the full-year. Adjusted EPS increased 14% to $0.96 in the fourth quarter and 9% to $4.33 for the full-year. We generated $3.3 billion of free cash flow for the quarter and $12.5 billion for the full-year, returning over 100% of this to shareholders with $13.5 billion of capital returned for the full-year...

During all of that, I'm certainly proud that we had the best year in our 60-year history with record revenue, EBITDA and EPS along with significant free cash flow, all while returning so much capital to shareholders and never take any of that for granted. Our team is executing in industries that are going through rapid and exciting transformation. And it's our founding principle to lean into that change and constantly look for new growth as we have always done. I also like to step back and think about our assets from our 64 million homes passed with really fast gig-speed internet to our robust backbone with hundreds of thousands of miles of fiber, localized data centers complete with space, power, and connectivity. Together, this network gives us a competitive advantage in the markets we serve but also importantly positions us really well for new growth opportunities in a world hungry for connectivity that will be increasingly driven by AI and edge computing...

Thank you, Brian. Operator, let's open the call for Q&A, please.

Thank you. We will now begin the question-and-answer session. Our first question is from Ben Swinburne from Morgan Stanley. Please go ahead.

Thank you. Good morning. I want to revisit your comments on wireless. Clearly, you are enthusiastic about that opportunity and appear to be shifting strategies. Should we anticipate an acceleration in net additions? Is that what success looks like in this area? Additionally, can you provide more insights on the investments that Jason mentioned and how you're addressing friction, such as handset subsidies? Also, while you discussed it, I'm not sure if Brian wants to elaborate on the vision for NBC's Media business following the spin-off, particularly concerning sports and broadcast. Looking ahead, how do you perceive the growth opportunities for what was traditionally considered the television business at NBC? Thank you.

Hey Ben, I'll start and then maybe Dave can add on wireless, and Brian on Media. To begin with wireless, we are happy to have reached 12% penetration. We feel confident about our ability to provide consumers with a comprehensive offering that includes the best broadband service across 63 million homes, along with a competitive mobile phone option on a top-notch network with premier devices. We've been working on this for a few years and like our progress. Our goal is to intensify our efforts. We have observed Charter's initiatives and noted their approach, particularly regarding simplified bundles. As we continue to upgrade our network, it will enhance our product offerings, providing a more unified service across mobile and broadband. Additionally, we aim to streamline our offerings and sales strategies for both broadband and wireless. Furthermore, we will focus on increasing engagement with our existing customers, especially those in our high-value wireless segments, rather than only targeting new customers. All these efforts will have an impact as we invest in our success, and that's what Jason was alluding to. Dave, do you have anything to add?

Yes, Mike. Hi Ben, we certainly had some success with our previous approach, particularly with wireless and the buy one, get one offer. We were pleased with that outcome. However, I believe it was the right time to shift our strategy towards packaging mobile rates with our higher-tier broadband products. This represents a fundamental change that will influence acquisition, base management, and retention. The inclusion of mobile is part of our overall goal to drive converged revenue, as both Mike and Jason have discussed.

And just to add one last thought on wireless. As I think about the industry opportunity, when they went from four to three, that makes it a business where you tend to see prices go up. And that creates a better business opportunity for a new entrant like ourselves. And so all the dynamics would appear to make that a good growth for many, many years to come. I think for the Media business, the spin, I just want to echo that I think makes a lot of sense. 98% of the viewing on Peacock does not include the spun networks. So they need their own direct-to-consumer digital initiatives and focus and investment...

Thank you. I'd like to shift the topic a bit from the new strategy. Last quarter, you announced the restructuring and SpinCo, and there may be plans to consolidate in streaming. Can you provide any updates? Do you believe the streaming market will consolidate? Any comments on mergers and acquisitions in the cable sector? Will increasing scale enhance your competitive position in broadband and wireless? Regarding Media, do you think there are any components still lacking or that would benefit from scale? Lastly, about SpinCo, could you elaborate on the strategy? You mentioned streaming, but will the emphasis be on sports, news, acquisitions, or cost-cutting?

Sure, it's Mike. I'll start and Brian can finish. Just quickly on SpinCo, it's just like I mentioned earlier. The assets going into SpinCo are leaders in genre-based entertainment, sports, and news. Managing those businesses effectively, which the leadership team will do, is the primary focus. They are working together to appoint new leaders and develop a strategy. When they are ready to unveil their strategy at some point in the future, we will revisit it. However, it's clear that they represent a strong, independent collection of businesses with significant cash flow generation potential for many years ahead, solid market standings, and now a focused approach.

I believe that's a very complete answer. Regarding SpinCo, one of the two other points is that we have the first mover advantage. We've noticed others discussing similar ideas. Additionally, they'll have a strong balance sheet, likely the envy of many, which will enable them to choose the strategy Jessica wants to implement there.

Thanks, Brian. Operator, next question please.

The next question is from Craig Moffett from MoffettNathanson. Please go ahead.

Hi, thank you. Dave, can you share what you've learned in your Project Genesis markets now that you are beginning to promote the completed initiatives? What does that look like, and what differences do you anticipate in the markets where you now offer symmetrical broadband with speeds similar to fiber?

Got it. Hey, Craig. First off, we’re happy with the progress we’re making with Genesis. We have completed 50% of the first phase, and we're moving at a very good pace. By the end of this year, the vast majority of the plant will have upgrades on the mid-split side. Operationally, we are satisfied and pleased with the architecture and the potential for virtualizing elements, which will allow us to implement all the strategies Mike mentioned for managing the network efficiently on a daily basis. We've made significant progress. However, the most important point we're making today is that we have a comprehensive plan for widespread multi-gig symmetrical service. We're not waiting to implement this; we are already advancing on the first phase as we enhance the plant to introduce a simplified package that we believe will have a positive impact in the marketplace.

Got it. Thank you.

Thanks, Craig. Operator, next question please.

The next question is from Michael Ng from Goldman Sachs. Please go ahead.

Hey, good morning. Thank you for the question. I just have two. First, on domestic broadband, could you just talk a little bit about the ARPU outlook? Should we expect ARPU growth to accelerate from here, just given the absence of things like hurricane rebates and some of the price increases implemented at the beginning of this year? And then for Jason, I was just wondering if you could talk about free cash flow for next year. Obviously, a few moving parts between cash taxes, the cash tax refund and CapEx potentially coming down in C&E. So any thoughts there would be great? Thank you.

Michael, this is Dave. Let me start with your point on ARPU. So we expect continued healthy ARPU growth. Our overall focus is on broadband and convergence revenue growth though. That is the main point as Mike and Jason have called out. And the good news is there are different levers we have and we'll continue to pull, but in the context of how we really are focused on maximizing overall revenue growth. So in a dynamic environment, we've got those levers to pull, and we will make the right decisions to optimize the levers to build longer-term sustainable revenue growth...

Yes, Mike, thanks for the question. So let me round out free cash flow, maybe step back a little bit. We gave an outlook on the call for a number of different parts of the business. As you get down to free cash flow, I'll step you through brief views on working capital, maybe complete the picture on CapEx, and then you mentioned cash tax as well. So it starts with what's the underlying base. The underlying base is very healthy free cash flow generation. As you saw in 2024, we generated $12.5 billion. That's in the context of we did have a $2 billion one-time headwind that we called out in the second quarter. So really, really free cash flow was probably $2 billion ahead of that. That's how we look at the baseline for 2024. And then entering into 2025, you're right. In the release today, we did talk about a tailwind to cash taxes in 2025. That will be roughly a couple billion dollars. So that's going to be a tailwind to us. We'll be clear about that at the time, and I would view that as a one-time thing. But nonetheless, helpful relative to 2024 where cash taxes went the other way...

Great, Thank you, Jason. Thank you, Dave.

Thanks, Mike. Operator, next question please.

The next question is from Jonathan Chaplin from New Street Research. Please go ahead.

Thank you. Following up on the wireless commentary, I'm curious about the strong revenue growth this quarter, especially in light of significant subscriber growth. Could you help clarify how much of that growth was driven by ARPU growth in wireless compared to equipment revenue? Additionally, we've heard that the MVNO contract might be up for renewal this year. Can you provide some context on what you anticipate for pricing during that renewal and how it could affect margins in the wireless business? Thank you.

So Jon, let me start with wireless growth and sort of I think your question really was sort of service versus equipment. I would tell you, very healthy growth in wireless. We added 1.2 million subs year-over-year. That translated into mid-teens revenue growth. And if you were to break it down in terms of service versus equipment, service revenue growth was sort of right in that range as well.

Yes, Jonathan and Dave. There is no new information regarding our MVNO strategy. We are satisfied with our current status. As Brian mentioned, in a consolidated marketplace, we believe cable is uniquely positioned to create significant value, not just for us but also for our partners. However, there is no new information to share at this time.

I think Mike's adding that we are a significant partner at this stage, which is important to consider, and we are not the only one in the partnership regarding wireless. I think this situation is different from the discussions we had in the past.

Thanks, Jonathan. Operator, next question please.

The next question is from Jessica Reif Ehrlich from Bank of America Securities. Please go ahead.

Thank you. Shifting focus from the new strategy, last quarter you announced the restructuring and SpinCo, along with potential plans to consolidate in streaming. Can you provide any updates? Do you anticipate consolidation in the streaming market? Any comments on mergers and acquisitions in relation to cable? Will increased scale enhance your competitive position in broadband and wireless? Additionally, regarding Media, are there any components you believe are still lacking or that would benefit from greater scale? Lastly, about SpinCo, could you elaborate on the strategy? You mentioned streaming, but will the emphasis be on sports, news, acquisitions, or cost reduction?

Sure, it's Mike. I'll start and Brian can finish. Regarding SpinCo, it's exactly as I mentioned earlier. The assets included in SpinCo are leaders in genre-based entertainment, sports, and news. The focus is on effectively managing those businesses, which the leadership team is committed to doing. They are currently collaborating to appoint new leaders and develop a strategy. When they are prepared to share their strategy, we will provide updates. The goal is to establish a strong, independent collection of businesses that have significant cash flow potential for many years, solid market positions, and a clear focus. I am optimistic that this will present good opportunities for our shareholders, regardless of how Mark and Anand choose to advance that strategy. Concerning the remaining Media business within NBCU, as I mentioned earlier, we are focused solely on our own assets and priorities. The aim is to align Donna and Matt with their respective teams and integrate the assets I previously mentioned into a new media group, which I believe will greatly support our streaming strategy for Peacock related to those NBC assets.

I believe that's a very comprehensive answer. Regarding SpinCo, I would highlight two additional points: first, we have a first mover advantage, as we’ve noticed others discussing similar concepts. Second, they will have an excellent balance sheet, likely the envy of many, which will enable them to choose the best strategy to implement. We want to give them the time and space to determine that. As Mike mentioned, they will return eager to share their strategy, but that’s probably not going to happen until later in the year.

Thanks, Brian. Operator, next question please.

The next question is from John Hodulik from UBS. Please go ahead.

Great. Maybe for Dave regarding the broadband question. The change you observed in December, do you think that was primarily due to competition? If so, could you provide a breakdown? Or were you experiencing more pressure from fiber-to-the-home or fixed wireless? You also mentioned satellite for the first time. Are you actually seeing that present now, or is it just an expectation for the future? And for Jason, one area where you have been very successful over the last few years is improving margins in cable and connectivity. Does that still hold as we look ahead, considering the new strategy to more aggressively combine broadband and wireless?

John, this is Dave. Let me start by saying that, as Mike mentioned, we might have been a bit too optimistic about what we observed in the price-sensitive segment earlier in the quarter in December. The key takeaway is that the competition remains fierce across all segments. There has been a slight shift, but fixed wireless, while stable, continues to be marketed aggressively, and fiber is still expanding its reach.

John, let me address your questions about margins, particularly in the C&P segment. We have a strong track record of improving margins. Several factors contribute to this, including a significant shift in our business towards connectivity, which offers higher margins. Additionally, we have seen a reduction in customer service interactions, such as truck rolls and incoming calls to our call centers, with these metrics declining by 40% to 50% over the past five or six years. The foundation for this ongoing improvement remains solid. As you can see, we achieved a healthy margin expansion in 2024.

And John, one more follow-up to your point on satellite, just to clarify. The two main ones are the ones I mentioned between fixed wireless and fiber. Satellite, we see it's just been de minimis, has not been a material thing for us, not being dismissive of it, though. We're going to watch it very closely, but we see it being more active in rural areas and not so much in suburban, urban areas at this point at all.

Great. Thank you.

Thanks, John. Operator, we have time for one final question.

Next question is from Steven Cahall from Wells Fargo. Please go ahead.

Thank you. I just wanted to go back to the broadband ARPU dynamics. I think you said very healthy ARPU growth, but you do lean into mobile. What we've seen with some of your peers is there is some dilution to ARPU. You've historically managed this really strong 3% to 4% growth. So just wondering if you're shifting that strategy a little bit around that 3% to 4% growth as you move into more of the converged bundle? And then on Peacock, thank you for the guidance for losses to improve. I'm just wondering if that's true in the second half of the year as well when the NBA costs come online and push OpEx higher. I know revenue is going to step up, too, but just trying to figure out if you think the NBA will be positive to Peacock EBITDA in 2025? Or if it's a bit of a headwind and then kind of ex NBA, there's a lot of improvements going on beneath the surface? Thank you.

Steven, this is Dave. Let me start with ARPU and a few points on that. You mentioned that mobile is a key component of our future. It has been a significant contributor for a long time, and we are eager to enhance our focus. There are several strategies we can employ regarding ARPU, and we will manage all of them. As we implement this new packaging approach, we are concentrating on all segments, following upgrades to our plant with a particular focus on the high end, as we always have and will continue to do.

And I think along those lines, we've been very clear as it relates to North Star for us is how you continue to grow broadband revenue at a healthy clip. And ultimately, how do you grow convergence revenue at an even better clip, right? So in the past year, we grew broadband revenue at 3%. We grew convergence revenue at 5%...

One other thing that in terms of revenue, Jason hit it perfectly. But I would offer Business Services revenue is a tremendous opportunity, has been, will be, where overall, we're a leader when you compare Business Services growth in terms of our peers and our competitors. It's a $10 billion revenues, great margins, and we have consistently contributed revenue and EBITDA growth...

And Steven, regarding Peacock, I appreciate your question. We’re excited about the NBA as it represents a significant addition that is expected to drive subscriber growth for us in 2025. This year, I anticipate improvements in Peacock revenues and losses. As we integrate the NBA in the second half of the year, we will work through various strategies to manage costs, which will include price increases, shifting ad sales to leverage the higher value content that the NBA provides, and repositioning programming that will be affected by the NBA's presence.

Thanks.

Thank you.

That concludes today's call. A replay of the call will be available starting at 11:30 a.m. Eastern Time today on Comcast Investor Relations website. Thank you for participating. You may all disconnect.