Comcast Corporation — 2024 Q1

Ben, Dave. So let me start with segmentation and a little bit more context on NOW. So stepping back, our segmentation strategy is really key. It starts with the beginning point always for us is premium and traditional broadband customers. We've focused there and invested in terms of better network, better products around providing a better service for the premium segment.

This is Brian. I just want to just underscore that last point that Dave was making. As you look with a longer lens, which I -- hopefully, the company tries to do, there's -- and we -- just even yesterday, we're looking at our technology road map internally and seeing some demonstrations of innovation. It's inspiring and exciting to think about what broadband will actually help you do in the next 5, 10 years as a consumer and as a business. And it's kind of in some levels, unimaginable. A lot of discussion about AI but so much happening in the entertainment sector, sports sector and also in the health care sector, and then things we're not even talking about.

Yes. Great. Thanks. So just to round that out, Ben, just you think your question specifically on ARPU and how do you go through the ACP cycle and have confidence in ARPU growth. I think all these points are relevant and valid. Number one, we continue to see usage grow at a rapid rate. So the value that the consumer is getting is higher. That's a tailwind in general for ARPU growth. I think number two is segmentation that Dave's talked about. We see a lot of competition in a certain segment of our base, the value-conscious segment of our base. The segmentation allows you to keep that from seeping into other segments of the base. And the team has done a nice job executing there.

And Ben, I'll just come in on the back of the question about any changes in how we think about capital allocation. I think Jason and team are carrying on a phenomenal tradition. I've been here now close to 10 years. And I think the idea of taking our well-generated capital across our businesses, and first and foremost, investing them back in the business with a very long-term view of what the future can be, where there's expected return. Whether that's the Parks business, whether that's the broadband network, whether that's streaming, whether it's just broad innovation.

Craig, Dave. Let me start with wireless and then hand it over to Jason and folks. But let me -- wireless is an absolute integral part of our overall strategy. And specifically to your question, we've always thought the main value for us, wireless is connected with broadband. And that it adds -- it surrounds broadband with value. I think we don't give specifics on exactly the churn benefits, but we do see it. And whether it's acquisition-oriented, connected to broadband; whether it's base management upgrading; whether it's retention, wireless plays a role in all of them.

Craig, so on margins, we said overall connectivity and platforms margins were up 50 basis points and said domestic was an even greater increase. The domestic was up 70 basis year-over-year, sort of continuing the formula of a mix shift in our business to higher-margin businesses. Our connectivity businesses are growing faster than our nongrowth video businesses. So that's a margin favorable trade-off for us as we said historically and then operating efficiencies in the business. I think we gave a stat last call that I'd reiterate, we've taken 50% of our truck rolls out of the system in the last 6 years. We've taken 40% of customer interactions out of the system in the last 6 years. So lot of good progress on expense efficiency. But Craig, the domestic margin's up 70 basis points.

I have a question on NBCU and also on Comcast Cable. On the Theme Parks, which is clearly one of your growth pillars, can you give us the investment levels you expect over the next 5 years? Obviously, Epic will be in there, so it will be a little elevated. But you have other new parks and you're also investing in the existing parks. And how different is the return on invested capital for Theme Parks versus your other businesses? And then one more on NBCU, are there other areas that NBCU should or you're thinking about investing in like video games?

Jessica, it's Mike. So on parks, as we've said, this is a year in 2024, where CapEx in parks and at NBCUniversal overall will sustain at the level it was in '23. So it remain elevated. In '25, when we open Epic, it will begin to step down. And then after that, it will return to a more normal level with adjustments for the Hollywood Hard Nights and the Kids park in Frisco, Texas that we've talked about. But those, as we've said, are not of the same size and scale as a large park like Epic but we do have a bigger footprint of parks than we did, say, 5 years ago.

Jessica, Dave. Just so on your question on renewals and our point of view. Yes, look, from our view, there's not a single approach towards -- we handle it on a case-by-case basis. When you step back for a second though, we evaluate each one in 3 primary areas. One, the overall cost relative to the content, flexibility that's required in a very fast-changing environment and the overall consumer value. And so -- and we're going to look at this significant transition that has been going on. We'll continue to go on between linear and streaming. And so that is something that we think we can play a unique role in, in terms of win-win opportunities between the content providers and distribution.

Yes, John, let me hit domestic or Cable EBITDA, C&P EBITDA over the course of the year. So I think as you mentioned, it's competitive market. We've got ACP coming our way. At the same time, the balance, I think about broadband specifically. The balance between rate and volume we've seen, obviously, a little bit of pressure on volume. But 4.2% ARPU growth in the quarter, an outlook for -- we continue to stay at 3% or 4% during the year. So we still think there's tailwinds for broadband revenue growth. We had 3.9% this quarter.

John, Dave. So just a follow-on to Jason's point in terms of ACP. Remember, I think a really important point. We've been segmenting the marketplace, and I think we've had the industry-leading platform in terms of Internet Essentials for a very long time so a decade-plus. So we are familiar with the segmentation in this area and we're very familiar in terms of promo roles and bigger moments like this. So I -- because of that, in particular, the ARPU point that's connected to it is we feel pretty good about the historical range of 3% to 4%. So -- but we've had a long-standing approach towards this.

And just -- Brian. One -- just again, just as we talked about in the residential market, the long-term opportunity where we're only just getting started is that large enterprise and medium-sized business. And as you think about cybersecurity and other data reliability and just consumption behavior of businesses and think of your own businesses and where that might lead to the use of new tools and video and everything else, you want to have the best network. And once again, we have a really exciting team and road map on that front. So again, we're battling the reality in one segment with great opportunity in others and long-term love our situation.

Steven, this is Dave. Let me start with footprint and then go to competition views. So let me -- in terms of overall footprint expansion, the vast majority of our new passings each quarter are fill-ins within our existing footprint. The balance of the growth is mostly from our organic edge-outs into adjacent areas. And so with some government subsidized builds representing a much smaller, albeit increasing portion. So it's really the kind of 3 different components of it that we're looking at.

And so on Peacock. I mean we're very pleased as we split -- both Jason and I said earlier, with a quarter where we ended at 33.5 million subs, 3.5 years in. We are at a place now where we really are seeing traction in our approach to providing a service for consumers that is a combination of both entertainment and sports and how those 2 go together.

Fall Guy, Twisters, Despicable Me 4, in addition to Kung Fu Panda 4.

Thanks, Steve. Operator, we have time for one last question.

Jonathan, Dave. Let me start with the broadband in its entirety, the whole market and a viewpoint. So let me begin with the broadband market as a whole is still growing, maybe at a slower pace than it was last year and the year before, but there's still going to be a pretty healthy amount of net adds in 2024 and likely beyond. The right way, though, in addition to that, I think you got it. Everything we've talked about before, the right way we think to look about it is it's holding our own, growing relationships responsibly, but it's also where the market is going and how broadband is being used.

Jonathan, let me start on segmentation and Dave probably wants to chime in as well. So on NOW, I think what's interesting and exciting about it is it's a dedicated sort of flanker brand strategy. We've had prepaid offers in the past sort of wedged into our existing portfolio. This is a more dedicated and branded strategy around it.

Yes. Just adding on to that, Jonathan. But again, we've been doing prepaid broadband for a while, years. And it's just we needed to refresh it, needed to update it and put it in a more competitive position. The prepaid mobile is new, and NOW TV is relatively new. But it's a segmented approach. And if you think about -- it's all in pricing, it's very simple. It's really easy.

Thanks, Jonathan, and we want to thank everyone on the call for joining us this morning.