The speaker, Marci Ryvicker, welcomes everyone to the Comcast fourth quarter and full year 2023 earnings conference call. She introduces the executives present and refers to the Safe Harbor disclaimer on Slide 2 of the presentation. Mike Cavanagh then speaks about the company's recent success with the first exclusively streamed NFL Wildcard Game on Peacock, which attracted a record-breaking number of viewers and demonstrated Comcast's ability to excel in the era of high bandwidth consumption.

In 2023, Universal Pictures' Oppenheimer received five Golden Globe awards and the company had strong financial results. They have a diverse range of businesses that have shown growth, including residential broadband, mobile, business services, theme parks, studios, and Peacock. Their revenue in these areas grew by 8% and made up 55% of their total revenue. The company also had strong cash flow and a strong balance sheet, allowing for organic investments and significant share repurchases. This resulted in the highest revenue, adjusted EBITDA, and adjusted EPS in the company's history for the third consecutive year. The company's connectivity businesses, including Xfinity Mobile and business services, showed strong growth and exceeded their goals. Their domestic broadband business remained strong with flat subscriber numbers and a 3.9% growth in residential ARPU, leading to solid EBITDA growth and expanding margins.

Despite a competitive market, the company has had a successful year and is well-prepared for the future. The demand for faster and more reliable internet is increasing, and the company's network is ready to meet it. They have also participated in a government program for affordable connectivity and will continue to provide options for customers if the program is discontinued. The company has also built a strong portfolio of content and franchises in film, television, sports, news, and entertainment for long-term growth.

The company's studio group has had a successful year with hit films and strong partnerships. Their media segment is also performing well, reaching a large audience and experiencing growth in their streaming platform, Peacock. They have a strong lineup of films and original content planned for 2024, as well as exclusive events like the Summer Olympics.

The upcoming Olympic Games in Paris are expected to be spectacular with the return of fans and extensive coverage from NBC Universal. Xfinity and Xumo will play a large role in delivering the games. In addition, the company has achieved record-high revenue and EBITDA in 2023 and has exciting new attractions and experiences planned for the future. The company's highest priority is to continue strong operational performance and make investments in key growth areas. The company's balance sheet allows for both investments and substantial capital returns for shareholders, including a 150% increase in the annualized dividend since 2015.

The company's strategy is working well and is expected to continue delivering for shareholders in the future. During the fourth quarter, total revenue increased by 2% and EBITDA remained consistent at $8 billion. Adjusted EBITDA decreased by 1% when excluding certain items. Adjusted EPS was up 2% and free cash flow per share increased by 10%. The company returned over 100% of its free cash flow to shareholders and invested in six growth categories, which generated more than half of the total revenue and grew at a high single digit rate. The company's largest foreign exchange exposure is to the British pound, which increased by 6% year-over-year.

The connectivity and platforms business saw flat revenue of $20.4 billion, with a 7% increase in core connectivity and an 8% decline in video, advertising, and other revenue. The company's strategy is to invest in core connectivity while managing businesses with secular headwinds. EBITDA for total connectivity and platforms increased by 3%, with margins improving by 130 basis points. Excluding severance and other charges, EBITDA increased by 2% and margins improved by 110 basis points. Margins for the domestic legacy cable business improved by 70 basis points. Residential and business services EBITDA grew by 2% and 5% respectively, with margins improving in both categories. Overall, residential connectivity revenue grew by 7%, driven by domestic broadband, domestic wireless, and international connectivity, while business services connectivity revenue grew by 6%.

The company's domestic broadband saw strong ARPU growth of 3.9% for the quarter and the year, with stable subscriber numbers. The company remains focused on competing in a financially balanced way and expects ARPU growth to continue driving revenue growth in 2024. While subscriber trends may not improve in the coming quarters, the company expects them to improve over time due to increasing demand for faster speeds and higher reliability. The company is investing in their network to increase capacity and offer multi-gig symmetrical speeds, with plans to reach 50% mid-splits by the end of 2024 and continued rollout of DOCSIS 4.0.

The company is focused on controlling what they can, such as segmenting their customer base and offering competitive prices. They have exceeded their goal of passing 1 million new homes and plan to continue expanding. They have also reached a milestone of $1 billion in quarterly revenue in their wireless sector, with a 24% increase in customer lines. They are consistently testing new offers to accelerate line additions and have a big opportunity for growth in wireless. International connectivity revenue has also seen strong growth.

In the fourth quarter, business services connectivity revenue increased by 6%, driven by growth in small business and midmarket/enterprise categories. This growth was offset by declines in video, advertising, and other revenue. The increase in connectivity revenue was due to a mix shift towards high-margin businesses and ongoing cost discipline. Expenses have decreased in five out of six categories, with only direct product costs increasing due to the growth in connectivity. The company has also become more efficient with better tools and technology, resulting in a significant reduction in truck rolls and customer interactions while still increasing the number of relationships. These investments in the network and technology have made the company more competitive and cost-efficient.

The company expects to see continued growth and profitability in the future due to a mix shift, cost discipline, and technology advances. In the fourth quarter, revenue and EBITDA increased for content and experiences, with strong growth at Peacock and record results at parks. Media revenue increased due to strong growth at Peacock and domestic distribution, while domestic advertising declined due to a tough comparison to the previous year. International networks revenue also increased.

In the fourth quarter of 2023, Peacock's advertising increased by 50%, not including the World Cup. However, their media EBITDA decreased by 50% due to higher sports costs. Peacock's EBITDA losses improved compared to the previous year, and they expect to see even more improvement in 2024. The studio's revenue increased by 4%, with theatrical revenue growing by 59% thanks to successful releases like Five Nights at Freddy's. The theme parks also saw strong growth, with revenue and EBITDA increasing by 12% each, driven by strong demand at international parks.

In the entertainment industry, Super Nintendo World at Hollywood's theme park and strong attendance at Orlando's park drove record profits. The company also generated $1.7 billion in free cash flow and invested in expanding their footprint and strengthening their network, with plans to continue this growth in 2024. Capital spending increased, with a focus on transitioning to DOCSIS 4.0 and accelerating growth in homes passed. Content and experiences capex also increased, primarily due to investments in the new Epic Universe park.

In 2024, parks capex is expected to remain high and then decrease in 2025 with the opening of Epic. The company's working capital was better than expected, and they returned $15.8 billion to shareholders in the past year. They also announced a dividend increase and have a target leverage of 2.3 times. The company is focused on executing their long term growth strategy and investing in organic growth. The CEO and CFO are proud of the company's accomplishments and believe they are well positioned for the future.

In 2023, the company returned $16 billion to shareholders and raised its dividend for the 16th consecutive year. The company has a strong team and is making necessary adjustments to continue growing and returning capital to shareholders. The CEO stated that he loves the company and the bar is high for any changes to the plan. The call was then opened for questions, with the first one addressing broadband and Peacock. The executives discussed consumer trends and their plans for converged offers in 2024.

During a recent earnings call, a question was asked about the potential for accelerated broadband customer trends and the investment needed for the Peacock business. Comcast executives responded by stating that while they are not putting a timeline on it, they are continuously working to improve their products and services. As for broadband, the competitive environment remains intense, with lower customer connects but record low churn rates. Despite this, Comcast is focused on striking the right balance between customer growth and average revenue per user (ARPU), resulting in a relatively flat subscriber base and a 3.9% growth in ARPU. They also mentioned that during competitive cycles like this one, there may be unique discounting in certain areas. As for Peacock, they did not provide a specific timeline for reaching breakeven, but stated that they are currently investing heavily in programming and are seeing good revenue momentum.

The speaker discusses the impact of fiber on net adds and how the company has adapted to compete against it. They mention the current focus on fixed wireless and catering to lower income segments, but express confidence in their ability to adapt and compete in the long run. The company is investing in network upgrades and symmetrical service offerings to prepare for future shifts in the market. They also mention the potential for more win backs and their commitment to protecting their base of 32 million broadband customers. Another speaker then discusses the success of Peacock in 2023.

The company has seen significant growth in paying subscribers for Peacock, reaching 31 million in just three years. They plan to continue executing their strategy to drive improvements in Peacock's bottom line and leverage their relevant content properties. This may result in a leveling off of the growth rate of programming spend, but the focus is on the long-term success of the entire media business, including both linear and streaming.

During a conference call, the executives of Comcast discussed the success of the Chiefs-Dolphins playoff game on Peacock and its impact on subscription growth. They were pleased with the performance of the live stream, which was the largest in U.S. history, and credited their technology platforms for its seamless execution. While they did not disclose the exact number of new subscribers, they expect to see an increase and are now focused on retaining those subscribers. They also mentioned the positive impact on broadband usage.

The focus for Peacock is on engagement and retention, with upcoming events such as the Summer Olympics and new content from Universal. The Wild Card Game had record levels of hours viewed, with the launch of a new comedy series and a reality show. The NFL's decision to choose the company was a proud moment for the industry and a proof of their investments.

During a conference call, Marci Ryvicker and Jessica Reif Ehrlich asked questions about Comcast's video strategy and plans for Peacock and Epic. Mike Cavanagh, CEO of Comcast, explained that their focus is on domestic scale for streaming and they have partnerships with companies like Sky and MultiChoice for international expansion. He also mentioned their goal of maintaining strong economics while scaling up Peacock domestically.

The company is focused on winning and reaching their goals, and they are a major player in the video distribution space. They have made progress and collaborations with partners to reach their large customer base through broadband. They are well positioned to play a part in the video industry with their platforms. The experience and ease of use for customers is important to them. The Epic theme park project is original and exciting, and the board of directors will be visiting the construction site soon.

Dave Watson from Comcast discusses the impact of the ACP program and the company's ability to support the 1.4 million customers it serves through the program. He also mentions the strength of the company's advertising market and their ability to serve customers through various price points and packages.

Mike Cavanagh and Jason discuss the risks and performance of the advertising market in the fourth quarter. They mention stabilization in most categories and encouraging signs, but it is still uncertain if there will be a sustainable rebound. They feel well positioned with their must-see tent poles and the progress of Peacock. Jason also mentions their willingness to expand their footprint if it is economically beneficial.

The speaker discusses the potential impact of BEAD in the future and the reauthorization of $15 billion for share repurchases. They also mention that the company has been able to accelerate their homes passed in the past and expects to continue to do so in the future.

The speaker discusses the company's plans for 2024, including self-funding most of their projects and pursuing opportunities in the ARPA program. They also mention their participation in the BEAD program and expect to see benefits in 2025. The speaker also talks about Xfinity Mobile plans for 2024 and how they are balancing promotional offers with driving broadband ARPU.

Dave Watson discusses the strong performance of wireless as a key long-term growth driver for the company. They have added 310,000 lines in the quarter and are only at 11% penetration to the broadband base, leaving a lot of room for growth. The team is constantly trying new offers and innovations to improve results and accelerate line additions. They are also focused on improving their product and service offerings.

The company is pleased with its capital-light approach and believes it gives them an advantage in the market. They will continue to evaluate their progress and look for opportunities to accelerate growth. The company's wireless and broadband ARPU growth are not connected, and they will do what is best for the business. The company is focused on investing in key growth areas and managing businesses with secular headwinds. They took severance actions to position themselves for continued transitions in these businesses in 2024 and beyond, with a focus on connectivity and platforms. Five out of six categories of expense were down year-over-year in 2023.

The speaker discusses the company's actions in transitioning their business and managing expenses, which has led to margin expansion. They have reduced truck rolls by 50% and transactional volumes by 40%, resulting in significant expense opportunities. In the future, capital intensity in the content and experiences segment is expected to decrease after the completion of the Epic build. They also expect continued growth in Peacock subscribers, with the benefit of converting Comcast bundle subscribers from free to paid.

The speaker discusses plans for parks, stating that they will remain at an elevated level in 2024 and ease off in 2025 as Epic is completed. They also mention the possibility of adding additional projects in the future. The speaker then moves on to discussing Peacock and mentions the success of converting free subscribers to paid subscribers. The call ends and a replay will be available on Comcast's Investor Relations website.

This summary was generated with AI and may contain some inaccuracies.