Comcast Reports 3rd Quarter 2022 Results

Comcast Corporation (NASDAQ: CMCSA) today reported results for the quarter ended September 30, 2022.

“I’m proud of the company and our strong financial results this quarter. We delivered solid growth in adjusted EBITDA and adjusted EPS, generated significant free cash flow, invested in our businesses’ future and returned a record amount of capital to our shareholders. This performance is a testament to our consistent strategic focus on innovation and our team’s ability to execute at the highest level in any environment. In Cable, we grew adjusted EBITDA by more than 5% and achieved our highest adjusted EBITDA margin on record despite a challenging competitive environment. At NBCUniversal, robust demand from guests at our Theme Parks and from viewers of our iconic content fueled nearly 25% growth in adjusted EBITDA. And, at Sky, our team continues to prudently manage through a difficult and rapidly changing macroeconomic and geopolitical period in the U.K. and Europe. Together, our company is a leader in very large and profitable markets. Despite the challenges that may lie ahead, we are in an enviable strategic and financial position, and our future remains bright," commented Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation.

For additional detail on segment revenue and expenses, customer metrics, capital expenditures, and free cash flow, please refer to the trending schedule on Comcast’s Investor Relations website at www.cmcsa.com.

3rd Quarter 2022 Highlights:

• Consolidated Adjusted EBITDA Increased 5.9% to $9.5 Billion; Generated Free Cash Flow of $3.4 Billion
• Returned $4.7 Billion to Shareholders Through a Combination of $1.2 Billion in Dividend Payments and $3.5 Billion in Share Repurchases
• Cable Communications Adjusted EBITDA Increased 5.4% and Adjusted EBITDA per Customer Relationship Increased 4.0%; Adjusted EBITDA Margin Increased 120 Basis Points to 45.1%, Its Highest on Record
• Cable Communications Total Customer Relationships of 34.4 Million and Total Broadband Customers of 32.2 Million Were Consistent with the Prior Quarter and Increased 0.9% and 1.5%, Respectively, Compared to the Prior Year Period
• Cable Communications Wireless Customer Line Net Additions Were 333,000, the Best Quarterly Result on Record
• Cable Communications Started Rolling Out Multi-Gig Broadband Speeds in Markets Across the U.S. and Announced the Launch of Even Faster, Multi-Gig Symmetrical Speeds Beginning in 2023
• NBCUniversal Adjusted EBITDA Increased 24.6% to $1.7 Billion, Including Peacock Losses
• Peacock Paid Subscribers in the U.S. Surpassed 15 Million; Increased Nearly 70% Year to Date
• Studios Adjusted EBITDA Increased $358 Million to $537 Million, Driven by the Successful Theatrical Performance of Jurassic World: Dominion and Minions: The Rise of Gru
• Theme Parks Adjusted EBITDA Increased 88.6% to $819 Million, Its Highest Adjusted EBITDA on Record, Reflecting Growth at Each Park Compared to the Prior Year Period
• Sky Revenue Decreased 14.7% to $4.3 Billion; On a Constant Currency Basis, Revenue Was Consistent with the Prior Year Period. Adjusted EBITDA in the Third Quarter Reflected the Timing of Sporting Events and the Corresponding Programming Amortization
• SkyShowtime, the Previously Announced Joint Venture with Paramount Global, Launched in September, Bringing its Premium Offering of Exclusive and Iconic Entertainment to Millions of Homes in Europe Outside of Sky's Territories

Consolidated Financial Results

Revenue for the third quarter of 2022 decreased 1.5% to $29.8 billion. Net Income (loss) Attributable to Comcast was $(4.6) billion, compared to $4.0 billion in the prior year period. Adjusted Net Income increased 4.5% to $4.2 billion. Adjusted EBITDA increased 5.9% to $9.5 billion.

In the third quarter of 2022 we recorded noncash impairment charges related to goodwill and intangible assets in our Sky segment totaling $8.6 billion. The impairments primarily reflected an increased discount rate and reduced estimated future cash flows as a result of macroeconomic conditions in Sky's territories, are recorded in "Goodwill and long-lived asset impairments" in the Condensed Consolidated Statement of Income and are excluded from Adjusted Net Income and Adjusted Earnings per Share.

For the nine months ended September 30, 2022, revenue increased 5.6% to $90.9 billion. Net income attributable to Comcast decreased 78.9% to $2.3 billion. Adjusted Net Income increased 9.7% to $12.6 billion. Adjusted EBITDA increased 8.2% to $28.5 billion.

Earnings (loss) per Share (EPS) for the third quarter of 2022 was ($1.05), compared to $0.86 in the prior year period. Adjusted EPS increased 10.3% to $0.96.

For the nine months ended September 30, 2022, EPS decreased 78.2% to $0.52. Adjusted EPS increased 14.2% to $2.82.

Capital Expenditures increased 30.3% to $2.8 billion in the third quarter of 2022. Cable Communications’ capital expenditures increased 20.8% to $2.0 billion. NBCUniversal’s capital expenditures increased $385 million to $614 million. Sky's capital expenditures decreased 39.8% to $96 million.

For the nine months ended September 30, 2022, capital expenditures increased 14.9% to $7.1 billion. Cable Communications' capital expenditures increased 9.0% to $5.2 billion. NBCUniversal's capital expenditures increased $799 million to $1.4 billion. Sky's capital expenditures decreased 39.3% to $373 million.

Net Cash Provided by Operating Activities was $6.9 billion in the third quarter of 2022. Free Cash Flow was $3.4 billion.

For the nine months ended September 30, 2022, net cash provided by operating activities was $20.5 billion. Free cash flow was $11.3 billion.

Dividends and Share Repurchases. In September 2022, Comcast announced that its Board of Directors increased its share repurchase program authorization to a total of $20.0 billion, effective as of September 13, 2022, and that the authorization does not have an expiration date. As of September 30, 2022, Comcast had $19.5 billion available under its share repurchase authorization.

During the third quarter of 2022, Comcast paid dividends totaling $1.2 billion and repurchased 92.3 million of its common shares for $3.5 billion, resulting in a total return of capital to shareholders of $4.7 billion, compared to $2.7 billion in the prior year period.

For the nine months ended September 30, 2022, Comcast paid dividends totaling $3.6 billion and repurchased 225.7 million of its common shares for $9.5 billion, resulting in a total return of capital to shareholders of $13.1 billion, compared to $5.4 billion in 2021.

Cable Communications

Revenue for Cable Communications increased 2.6% to $16.5 billion in the third quarter of 2022, driven by increases in broadband, business services, wireless and advertising revenue, partially offset by decreases in video and voice revenue. Broadband revenue increased 5.7% due to an increase in average rates and an increase in the number of residential broadband customers compared to the prior year period. Business services revenue increased 9.4% due to an increase in average rates, an increase in the number of customers receiving our services and from a recent acquisition. Wireless revenue increased 30.8% due to an increase in the number of customer lines and an increase in device sales. Advertising revenue increased 7.2%, primarily driven by an increase in political advertising. Excluding political revenue, advertising revenue decreased by 5.8%, reflecting the previously announced transition of our Xumo streaming service from Cable Communications to a joint venture reported in Corporate and Other and lower local and national advertising revenue, partially offset by higher revenue from our advanced advertising businesses. Video revenue decreased 4.4%, reflecting a decrease in the number of residential video customers, partially offset by an increase in average rates. Voice revenue decreased 12.5%, primarily reflecting a decrease in the number of residential voice customers. Other revenue was consistent with the prior year period.

For the nine months ended September 30, 2022, Cable revenue increased 3.7% to $49.7 billion, driven by growth in broadband, business services, wireless and advertising revenue, partially offset by a decrease in video and voice revenue. Other revenue was consistent with 2021.

Total Customer Relationships decreased by 21,000 to 34.4 million in the third quarter of 2022. Residential customer relationships decreased by 26,000 and business customer relationships increased by 5,000. Total broadband customer net additions were 14,000, total video customer net losses were 561,000 and total voice customer net losses were 316,000. In addition, Cable Communications added 333,000 wireless lines in the quarter.

For the nine months ended September 30, 2022, total customer relationships increased by 145,000. Residential customer relationships increased by 121,000 and business customer relationships increased by 25,000. Total broadband customer net additions were 277,000, total video customer net losses were 1.6 million and total voice customer net losses were 884,000. In addition, Cable Communications added 968,000 wireless lines in the current period.

Adjusted EBITDA for Cable Communications increased 5.4% to $7.5 billion in the third quarter of 2022, primarily reflecting higher revenue. Operating expenses were consistent with the prior year period. Programming expenses decreased 2.8%, primarily reflecting a decline in the number of video subscribers, partially offset by contractual rate increases. Non-programming expenses increased 2.5%, primarily reflecting higher other expenses and technical and product support expenses, partially offset by lower advertising, marketing and promotion expenses and franchise and regulatory fees. Adjusted EBITDA per customer relationship increased 4.0%, and Adjusted EBITDA margin was 45.1% compared to 43.9% in the prior year period.

For the nine months ended September 30, 2022, Adjusted EBITDA for Cable Communications increased 5.7% to $22.2 billion, reflecting higher revenue, partially offset by a 2.1% increase in operating expenses. Programming expenses decreased 1.8%, primarily reflecting a decline in the number of video subscribers, partially offset by contractual rate increases. Non-programming expenses increased 4.7%. For the nine months ended September 30, 2022, Adjusted EBITDA per customer relationship increased 3.5%, and Adjusted EBITDA margin was 44.6% compared to 43.8% in 2021.

Capital Expenditures for Cable Communications increased 20.8% to $2.0 billion in the third quarter of 2022, reflecting increased investment in line extensions, customer premise equipment, scalable infrastructure and support capital. Cable capital expenditures represented 12.2% of Cable revenue in the third quarter of 2022 compared to 10.4% in the prior year period.

For the nine months ended September 30, 2022, Cable capital expenditures increased 9.0% to $5.2 billion, reflecting increased investment in line extensions, scalable infrastructure, support capital and customer premise equipment. Cable capital expenditures represented 10.4% of Cable revenue compared to 9.9% in 2021.

NBCUniversal

Revenue for NBCUniversal decreased 4.3% to $9.6 billion in the third quarter of 2022. The prior year period included an incremental $1.8 billion from the Tokyo Olympics included in the Media segment. Adjusted EBITDA increased 24.6% to $1.7 billion.

For the nine months ended September 30, 2022, NBCUniversal revenue increased 17.3% to $29.3 billion. The current year period included $1.5 billion of incremental revenue from the Beijing Olympics and the NFL's Super Bowl in the Media segment, while 2021 included $1.8 billion of incremental revenue from the Tokyo Olympics in the Media segment. Adjusted EBITDA increased 17.0% to $5.1 billion.

Media

Media revenue decreased 22.7% to $5.2 billion in the third quarter of 2022, due to lower advertising revenue and distribution revenue, reflecting the comparison to the Tokyo Olympics in the prior year period. Excluding $1.8 billion of incremental revenue from the Tokyo Olympics in the prior year period, Media revenue increased 4.4%. Advertising revenue decreased 35.1%, primarily due to the Tokyo Olympics in the prior year period, partially offset by an increase in Peacock advertising revenue. Distribution revenue decreased 13.7%, reflecting the Tokyo Olympics in the prior year period and a decline in subscribers at our networks, partially offset by an increase in subscribers at Peacock and contractual rate increases. Adjusted EBITDA decreased 41.5% to $583 million in the third quarter of 2022, reflecting lower revenue, which more than offset lower operating expenses. The decrease in operating expenses was primarily due to lower programming and production costs, reflecting lower sports programming costs associated with the Tokyo Olympics in the prior year period, partially offset by higher costs at Peacock. Media results include $506 million of revenue and an Adjusted EBITDA⁶ loss of $614 million related to Peacock, compared to $230 million of revenue and an Adjusted EBITDA⁶ loss of $520 million in the prior year period.

For the nine months ended September 30, 2022, revenue from the Media segment increased 2.8% to $17.4 billion, primarily due to higher distribution revenue. Excluding $1.5 billion of incremental revenue from the Beijing Olympics and the NFL's Super Bowl in the current year period and $1.8 billion of incremental revenue from the Tokyo Olympics in 2021, Media revenue increased 4.9%. Adjusted EBITDA decreased 20.0% to $3.1 billion, reflecting higher operating expenses, which more than offset higher revenue. The increase in operating expenses was due to higher programming and production expenses, other operating and administrative expenses and advertising, marketing and promotion expenses. Media results include $1.4 billion of revenue and an Adjusted EBITDA⁶ loss of $1.5 billion related to Peacock, compared to $443 million of revenue and an Adjusted EBITDA⁶ loss of $1.2 billion in 2021.

Studios

Studios revenue increased 31.4% to $3.2 billion in the third quarter of 2022, primarily reflecting higher theatrical and content licensing revenue. Theatrical revenue increased $366 million to $673 million, primarily due to the successful performance of recent releases, Jurassic World: Dominion and Minions: The Rise of Gru. Content licensing revenue increased 16.8%, primarily due to the timing of when content was made available by our television and film studios under licensing agreements, including additional sales of content as production levels returned to normal. Adjusted EBITDA increased $358 million to $537 million in the third quarter of 2022, reflecting higher revenue, which more than offset higher operating expenses. The increase in operating expenses was driven by higher programming and production expenses, reflecting higher amortization of film and television production costs in the current year period.

For the nine months ended September 30, 2022, revenue from the Studios segment increased 26.4% to $8.9 billion, primarily reflecting higher content licensing revenue and theatrical revenue. Adjusted EBITDA decreased 6.0% to $783 million, reflecting higher operating expenses, which more than offset higher revenue. The increase in operating expenses was primarily driven by higher programming and production expenses.

Theme Parks

Theme Parks revenue increased 42.4% to $2.1 billion in the third quarter of 2022, reflecting increased attendance and guest spending at our parks in the U.S. and Japan compared to the prior year period, and an increase from the operations of Universal Beijing Resort, which opened in September 2021. Theme Parks Adjusted EBITDA increased 88.6% to $819 million in the third quarter of 2022, reflecting higher revenue, partially offset by higher operating expenses. The prior year period included pre-opening costs related to Universal Beijing Resort.

For the nine months ended September 30, 2022, revenue from the Theme Parks segment increased 71.6% to $5.4 billion, primarily reflecting improved operating conditions compared to 2021, when each of our theme parks in the U.S. and Japan was either operating at limited capacity or closed during certain periods as a result of COVID-19, as well as the operations of Universal Beijing Resort, which opened in September 2021. Adjusted EBITDA increased $1.3 billion to $1.9 billion, reflecting higher revenue, partially offset by higher operating expenses.

Headquarters and Other

NBCUniversal Headquarters and Other includes overhead, personnel costs and costs associated with corporate initiatives. Headquarters and Other Adjusted EBITDA loss in the third quarter of 2022 was $199 million, compared to a loss of $248 million in the prior year period.

For the nine months ended September 30, 2022, Headquarters and Other Adjusted EBITDA loss was $528 million, compared to a loss of $643 million in 2021.

Eliminations

Amounts represent eliminations of transactions between our NBCUniversal segments, which are affected by the timing of recognition of content licenses between our Studios and Media segments. Revenue eliminations in the third quarter of 2022 were $909 million, compared to $654 million in the prior year period, and Adjusted EBITDA eliminations were a loss of $59 million, compared to a loss of $12 million in the prior year period.

For the nine months ended September 30, 2022, revenue eliminations were $2.5 billion, compared to $2.2 billion in 2021. Adjusted EBITDA eliminations were $98 million, compared to $238 million in 2021. The year-over-year change was primarily driven by the licensing of content by the Studios segment to Peacock in the Media segment.

Sky

Revenue for Sky decreased 14.7% to $4.3 billion in the third quarter of 2022. Excluding the impact of currency, revenue was consistent with the prior year period. Direct-to-consumer revenue of $3.5 billion was consistent with the prior year period, reflecting increased revenue in the U.K., driven by higher broadband and mobile revenue, offset by decreased revenue in Italy and Germany. Advertising revenue decreased 1.6% to $471 million, reflecting lower revenue in Italy and consistent revenue in the U.K. and Germany. Content revenue increased 6.4% to $273 million, primarily due to the timing of licensing our content to other platforms.

For the nine months ended September 30, 2022, Sky revenue decreased 11.0% to $13.5 billion. Excluding the impact of currency, revenue decreased 1.4%, reflecting lower direct-to-consumer revenue and content revenue, partially offset by higher advertising revenue.

Total Customer Relationships increased by 320,000 to 23.0 million in the third quarter of 2022, driven by streaming customer net additions as a result of the timing of unique content and the early start of the football season. For the nine months ended September 30, 2022, total customer relationships decreased by 41,000.

Adjusted EBITDA for Sky decreased 27.9% to $701 million in the third quarter of 2022. Excluding the impact of currency, Adjusted EBITDA decreased 15.5% compared to the prior year period, driven by higher operating expenses. The increase in operating expenses primarily reflects higher sports programming costs due to the timing of sporting events, including a shift of certain football matches to the third quarter in advance of the 2022 FIFA World Cup, which will occur in the fourth quarter of 2022, as well as higher direct network costs driven by growth in our residential broadband and mobile businesses, partially offset by lower entertainment programming costs.

For the nine months ended September 30, 2022, Adjusted EBITDA for Sky increased 15.3% to $2.2 billion. Excluding the impact of currency, Adjusted EBITDA increased 28.7%.

Corporate, Other and Eliminations

Corporate and Other

Corporate and Other primarily relates to corporate operations, Comcast Spectacor and our new smart TV initiatives, including Sky Glass and a joint venture with Charter Communications to develop and nationally offer a next generation streaming platform. Revenue in the third quarter of 2022 was $147 million compared to $65 million in the prior year period. Corporate and Other Adjusted EBITDA loss was $378 million compared to a loss of $335 million in the prior year period.

For the nine months ended September 30, 2022, Corporate and Other revenue was $549 million compared to $246 million in 2021. Corporate and Other Adjusted EBITDA loss was $944 million compared to a loss of $876 million in 2021.

Eliminations

Amounts represent eliminations of transactions between Cable Communications, NBCUniversal, Sky and other businesses. Eliminations of transactions between NBCUniversal segments are presented separately. Revenue eliminations in the third quarter of 2022 were $660 million compared to $871 million in the prior year period, and Adjusted EBITDA eliminations were a benefit of $26 million compared to a loss of $98 million in the prior year period. Prior year amounts reflect eliminations associated with the Tokyo Olympics.

For the nine months ended September 30, 2022, revenue eliminations were $2.2 billion compared to $2.3 billion in 2021, and Adjusted EBITDA eliminations were a loss of $93 million compared to a loss of $87 million in 2021.

Conference Call and Other Information

Comcast Corporation will host a conference call with the financial community today, October 27, 2022 at 8:30 a.m. Eastern Time (ET). The conference call and related materials will be broadcast live and posted on our Investor Relations website at www.cmcsa.com. Those parties interested in participating via telephone should dial (929) 477-0338 with the passcode 876679. A replay of the call will be available starting at 11:30 a.m. ET on Thursday, October 27, 2022 on the Investor Relations website.

From time to time, we post information that may be of interest to investors on our website at www.cmcsa.com and on our corporate website, www.comcastcorporation.com. To automatically receive Comcast financial news by email, please visit www.cmcsa.com and subscribe to email alerts.

Caution Concerning Forward-Looking Statements

This press release includes statements that may constitute forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date they are made, and involve risks and uncertainties that could cause actual events or our actual results to differ materially from those expressed in any such forward-looking statements. In evaluating these statements, readers should consider various factors, including the risks and uncertainties we describe in the “Risk Factors” sections of our most recent Annual Report on Form 10-K, our most recent Quarterly Report on Form 10-Q and other reports filed with the Securities and Exchange Commission (SEC). We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise.

Non-GAAP Financial Measures

In this discussion, we sometimes refer to financial measures that are not presented according to generally accepted accounting principles in the U.S. (GAAP). Certain of these measures are considered “non-GAAP financial measures” under the SEC regulations; those rules require the supplemental explanations and reconciliations that are in Comcast’s Form 8-K (Quarterly Earnings Release) furnished to the SEC.

About Comcast Corporation

Comcast Corporation (Nasdaq: CMCSA) is a global media and technology company that connects people to moments that matter. We are principally focused on connectivity, aggregation, and streaming with 57 million customer relationships across the United States and Europe. We deliver broadband, wireless, and video through our Xfinity, Comcast Business, and Sky brands; create, distribute, and stream leading entertainment, sports, and news through Universal Filmed Entertainment Group, Universal Studio Group, Sky Studios, the NBC and Telemundo broadcast networks, multiple cable networks, Peacock, NBCUniversal News Group, NBC Sports, Sky News, and Sky Sports; and provide memorable experiences at Universal Parks and Resorts in the United States and Asia.

Visit www.comcastcorporation.com for more information.