Comcast Corporation (NASDAQ: CMCSA)

Comcast reported consolidated revenue of $29.9 billion for the first quarter of 2025, representing a slight decrease of 0.6% compared to the same period in 2024. Despite this modest revenue decline, the company demonstrated improved operational efficiency with Adjusted EBITDA growing 1.9% to $9.5 billion.

Net income attributable to Comcast decreased 12.5% to $3.4 billion, primarily impacted by equity in net losses of investees, compared to income in the prior year. However, Adjusted EPS, which excludes certain items affecting comparability, increased 4.5% to $1.09, reflecting the company's operational strength and the positive impact of share repurchases, which reduced shares outstanding by 5% year-over-year.

Capital expenditures decreased 14.4% to $2.3 billion, with Connectivity & Platforms' capital expenditures down 13.8% to $1.6 billion, primarily reflecting lower spending on customer premise equipment and scalable infrastructure. Content & Experiences' capital expenditures decreased 10.8% to $602 million as the company nears completion of the Epic Universe theme park in Orlando, scheduled to open on May 22, 2025.

Free cash flow increased significantly by 19.4% to $5.4 billion, demonstrating Comcast's strong ability to generate cash while maintaining strategic investments. During the quarter, the company returned $3.2 billion to shareholders, comprised of $1.2 billion in dividend payments and $2.0 billion in share repurchases.

Connectivity & Platforms: While revenue decreased slightly by 0.7% to $20.1 billion, the segment's Adjusted EBITDA increased 1.5% to $8.3 billion, with margins expanding by 90 basis points to 41.4%. This improvement reflects operational efficiencies and a strategic focus on higher-margin connectivity services. Connectivity revenue, which includes domestic broadband, domestic wireless, international connectivity, and business services connectivity, grew 4.1% to $11.3 billion.

Media: Media revenue increased 1.1% to $6.4 billion, with Adjusted EBITDA growing impressively by 21.5% to $1.0 billion. This strong performance was primarily driven by Peacock, which saw a 16% revenue increase to $1.2 billion and significant improvement in Adjusted EBITDA losses, which decreased by $424 million compared to the prior year period.

Studios: Studios revenue increased 3.0% to $2.8 billion, with Adjusted EBITDA growing 22.3% to $298 million. This growth was driven by higher content licensing revenue and strong performance from recent theatrical releases, including carryover benefits from "Wicked" and "Nosferatu."

Theme Parks: Theme Parks revenue decreased 5.2% to $1.9 billion, with Adjusted EBITDA declining 32.1% to $429 million. The performance was impacted by lower attendance at domestic parks, including the effect of Hollywood wildfires, and approximately $100 million in pre-opening costs for Epic Universe ahead of its May 2025 opening.

Overall, the segment performance demonstrates Comcast's ability to drive growth in its core connectivity businesses and improve profitability in media and content operations, while continuing to invest in future growth initiatives like Epic Universe.

Comcast's Connectivity & Platforms segment demonstrates a strategic shift toward higher-margin connectivity services while managing the anticipated decline in traditional video services. The company added 323,000 domestic wireless lines in the first quarter, achieving its highest wireless line additions in two years. However, total domestic broadband customers decreased by 199,000 and total video customers declined by 427,000.

Residential Connectivity & Platforms revenue decreased 1.3% to $17.6 billion, reflecting the impact of declining video, advertising, and other revenue streams. However, the core connectivity services showed strong growth, with domestic broadband revenue increasing 1.7% to $6.6 billion, domestic wireless revenue growing 15.6% to $1.1 billion, and international connectivity revenue rising 9.5% to $1.1 billion.

Business Services Connectivity continued to be a bright spot, with revenue growing 3.7% to $2.5 billion and Adjusted EBITDA increasing 4.1% to $1.4 billion. The segment maintained impressive margins of 57.0%, expanding by 30 basis points year-over-year. This growth was driven by increased adoption of enterprise solutions offerings and higher average rates from small business customers adopting advanced services.

Comcast continued to execute its domestic network upgrade and expansion strategy, increasing its converged broadband and wireless footprint with 275,000 new passings of homes and businesses in the first quarter. This expansion positions the company for future growth in its connectivity services.

Media: The Media segment showed strong financial improvement despite challenges in traditional advertising. Revenue increased 1.1% to $6.4 billion, while Adjusted EBITDA grew impressively by 21.5% to $1.0 billion. The growth was primarily driven by Peacock, which achieved a 16% increase in revenue to $1.2 billion and significantly reduced its Adjusted EBITDA loss by $424 million compared to the prior year period. Domestic advertising revenue declined 6.8%, reflecting broader market trends, but international networks revenue increased 13.9%, primarily due to growth in sports network distribution.

Studios: The Studios segment delivered solid performance with a 3.0% revenue increase to $2.8 billion and a 22.3% growth in Adjusted EBITDA to $298 million. Content licensing revenue grew 3.5%, reflecting favorable timing of content availability from film and television studios. Other revenue increased 17.5%, primarily driven by digital sales of "Wicked," while theatrical revenue decreased 13.3% due to a softer theatrical slate compared to the prior year period.

Theme Parks: Theme Parks revenue decreased 5.2% to $1.9 billion, and Adjusted EBITDA decreased 32.1% to $429 million. The performance was primarily impacted by lower attendance at domestic theme parks, including the effects of the Hollywood wildfires. Additionally, the segment incurred approximately $100 million in pre-opening costs for Epic Universe ahead of its scheduled May 22, 2025 opening. Despite the short-term headwinds, the company remains optimistic about the future growth trajectory of its Theme Parks business, with the highly anticipated Epic Universe set to transform Universal Orlando into a premier weeklong destination with five immersive worlds and over 50 attractions. Comcast has also announced plans to build a new Universal theme park in the United Kingdom and the August 2025 opening of Universal Horror Unleashed in Las Vegas.

Comcast demonstrated strong cash generation in the first quarter of 2025, with net cash provided by operating activities increasing 5.7% to $8.3 billion. Free cash flow showed even more impressive growth, increasing 19.4% to $5.4 billion, primarily driven by higher operating cash flow and lower capital expenditures.

Capital expenditures decreased 14.4% to $2.3 billion, with Connectivity & Platforms' capital expenditures down 13.8% to $1.6 billion, reflecting lower spending on customer premise equipment and scalable infrastructure. Content & Experiences' capital expenditures decreased 10.8% to $602 million as the company approaches the completion of Epic Universe.

The company maintained its commitment to shareholder returns, distributing $3.2 billion to shareholders through a combination of $1.2 billion in dividend payments and $2.0 billion in share repurchases. These repurchases reduced shares outstanding by 5% year-over-year, contributing to the 4.5% growth in Adjusted EPS despite the slight decline in Adjusted Net Income.

Comcast ended the quarter with a strong balance sheet, including $8.6 billion in cash and cash equivalents, up from $7.3 billion at the end of 2024. Total debt was $99.1 billion, consisting of $6.8 billion in current portion and $92.3 billion in non-current portion. The company's disciplined approach to capital allocation continues to support both strategic investments in growth initiatives and significant returns to shareholders.

Comcast's outlook and strategic initiatives demonstrate a clear focus on balancing growth investments with shareholder returns. The company is concentrating on six growth businesses: residential broadband, wireless, business services, theme parks, studios, and streaming, while efficiently managing traditional businesses like video that are facing secular challenges.

The continued network upgrade and expansion strategy, with 275,000 new passings in Q1, positions Comcast to capitalize on future connectivity demand, particularly as it builds its converged broadband and wireless footprint. The wireless business, which achieved its highest line additions in two years, represents a significant growth opportunity as the company leverages its network and customer relationships.

The opening of Epic Universe next month marks a major milestone in Comcast's theme parks strategy, transforming Universal Orlando into a premier weeklong destination. The announced plans for a new Universal theme park in the UK and the August 2025 opening of Universal Horror Unleashed in Las Vegas further demonstrate the company's commitment to expanding its experiences business globally.

Peacock's improved financial performance, with a $424 million reduction in Adjusted EBITDA losses, indicates that Comcast's streaming strategy is gaining traction. The continued investments in content and technology for Peacock aim to build a sustainable, profitable streaming business.

Management's confidence in Comcast's ability to "navigate an evolving environment and capture future opportunities" is supported by the company's strong free cash flow generation and disciplined approach to capital allocation, which enables both strategic investments and significant shareholder returns.