- Peacock saw its losses more than double to $432 million thanks to higher programming costs
- The Super Bowl, Milan Cortina Winter Olympics and the NBA deal brought loads of revenue, but came with heavy programming costs
- Shares of the media giant jumped over 7% in pre-market trading on Thursday based on Comcast’s overall results
Peacock’s sports offering continued to be a double-edged sword, as the streamer surpassed $2 billion in revenue for the first time, but posted a widened loss of $432 million in the first quarter driven by higher programming costs associated with the Super Bowl, Milan Cortina Winter Olympics and NBA.
However, Comcast co-CEO Mike Cavanagh declared on Thursday that the streamer would reach a “meaningful inflection point” in the second quarter as it is expected to hit profitability for the first time ever.
“This quarter represents our peak EBITDA dilution from NBA costs,” Cavanagh told analysts on Thursday. “We feel good about the direction from here at studios.”
Peacock’s profitability milestone would come after Netflix and NBCUniversal’s other legacy media competitor’s streaming offerings have already turned the corner on profitability. However, its subscriber gap relative to its competitors still remains large and could be further exacerbated by Paramount’s pending $110 billion acquisition of Warner Bros. Discovery. The service added 2 million paid subscribers for a total of 46 million.
Overall, Comcast’s media unit swung to a loss of $436 million from a profit of $107 million a year ago. However, the Super Bowl, Olympics and an NBA All-Star game helped boost the segment’s revenue 60.8% to $7.3 billion. When excluding the Super Bowl and the Olympics, media revenue climbed 12.7% to $5.1 billion. The special programming, dubbed “Legendary February,” was enough for NBC to beat CBS in ratings for the first time since 2019.
Despite the mixed results in the media unit, Comcast shares jumped over 6% on Thursday as it beat Wall Street expectations and saw meaningful improvements in broadband and pay TV customer losses. The company’s total revenue increased 5.3% to $31.5 billion as net profit tumbled 35.6% to $2.2 billion, or 60 cents per share. On an adjusted basis, net income fell 30.7% to $2.9 billion, or 79 cents per share.
Those results were enough to top the $30.4 billion in revenue and 73 cents a share in earnings that Wall Street had projected, according to Yahoo Finance.
The latest quarterly results mark Comcast’s first excluding its portfolio of cable networks that were spun off into Versant in January. Those include USA Network, CNBC, MS Now, Oxygen, E!, SYFY and Golf Channel, as well as digital assets Fandango, Rotten Tomatoes, GolfNow and SportsEngine.
Peacock surpasses $2 billion in revenue for first time despite bigger losses
Peacock’s revenue climbed 12% year over year to $2.1 billion, which included $901 million in ad revenue, $1.2 billion in distribution revenue and $189 million in “other” revenue.
But higher programming and production costs of $1.95 billion caused the streamer’s loss to widen to $432 million, compared to $215 million in the prior year period. When including an additional $586 million in marketing, promotion and other costs, the streamer’s expenses totaled $2.5 billion.
Executives said that the first quarter was “peak volume” for its NBA contract with about 50% of the games played and represents “peak EBITDA dilution” with Peacock expected to hit profitability in the second quarter.
“The prospect for ongoing and durable profitability for Peacock is what we have our sight set on. And that, combined with really putting it together with linear media business in NBC, is how we’re going to manage the media business going forward,” Cavanagh said. “We have a very elegantly designed media business where we’ve gotten its focus to three three parts — parks, studios and media that are going to work together for years to come. We’re going to be focused on driving value and and putting capital to work against the opportunities that we have there.”
Comcast narrows broadband, cable TV customer losses
Comcast saw a meaningful improvement in broadband losses, which totaled 65,000 compared to 183,000 in the year ago period. It also narrowed its cable TV customer losses to 322,000, compared to 427,000 a year ago, and added 435,000 new mobile lines during the quarter for a total of 9.7 million mobile customers amid a period of heightened competition in the wireless business.
“Together, these are early signs that the strategic pivot we’ve made in our connectivity business is underway,” Cavanagh said. “Customers are responding to our go-to market strategy, with roughly 40% of our residential broadband base already on our simple, transparent packaging and the majority still expected to migrate by year end.”
Content licensing drives studios unit as theatrical revenue sinks
Comcast’s studios unit saw a 102.4% increase in profit to $555 million as revenue climbed 21.2% to $3.43 billion. The segment’s results were driven by a 36.8% increase in content licensing revenue, which included a renewed agreement for “The Office” on Peacock, offset by a higher programming and production costs.
Meanwhile, theatrical revenue fell 59.2% to $117 million as revenue from “Reminders of Him” was lower compared to “Dog Man” and “Nosferatu” in the prior year period.
However, the studios unit is off to a strong start in the second quarter, with “The Super Mario Galaxy” movie crossing $750 million globally and a virtual lock to pass $1 billion. Cavanagh also touted the company’s 2026 lineup, including Steven Spielberg’s “Disclosure Day,” Illumination’s “Minions & Monsters” and Universal’s “Focker-in-Law.”
Epic Universe boosts theme parks revenue, profit
Another bright spot was the theme parks division, with profits climbing 33% to $551 million and revenue increasing 24% to $2.3 billion, driven by higher results at its Orlando theme parks, including the opening of Epic Universe in May. That’s expected to continue with the company’s plans to invest further in parks this year.
“We’re continuing to invest behind a pipeline of growth. This year, we opened Fast and Furious: Hollywood Drift in Universal Hollywood and our first ever kids park in Frisco, Texas this summer,” Cavanagh said. “Internationally, our UK Park is progressing through final planning approvals as site stabilization begins and we’re building on our strength in Japan with immersive Pokemon experiences.”
Cavanagh added that there’s been no significant impact to the parks business caused by higher oil prices tied to the Iran war.
“That does not mean that it may not happen depending on the duration of the effect on price of gas and the like and plane airline tickets and so forth, so more to come,” he cautioned. But thus far, we’re not seeing a pullback of any level that’s concerning in the current results.”
