CMCSA — Q2 2026 Financial Report Analysis

Headline: the reported numbers are distorted by two portfolio exits — underneath, Peacock turned profitable and broadband kept shrinking

Comcast reported second-quarter 2026 revenue of $29.94 billion, down 1.2% from $30.31 billion a year earlier, and diluted earnings per share of $0.99, down 66.9% from $2.98. Neither figure describes what actually happened in the quarter.

Two things break the comparison:

1. The prior-year quarter contained a one-off gain. Q2 2025 net income of $11.1 billion included a $9.4 billion pre-tax gain from selling Comcast's stake in Hulu — worth $7.07 billion after tax, or $1.90 of the $2.98 in year-ago EPS. Strip it out and the EPS comparison is $1.04 vs. $1.25 on Comcast's adjusted basis, a decline of 16.7% rather than 66.9%.
2. The company is smaller than it was. Comcast completed the Versant separation on 2 January 2026 (spinning off most of its cable television networks) and sold its Sky operations in Germany on 31 May 2026. Versant alone contributed $1.77 billion of revenue and $789 million of Adjusted EBITDA to the year-ago quarter — a business earning a roughly 45% EBITDA margin, far above the company average, so removing it drags the reported growth rate and the margin down at the same time.

On Comcast's own pro forma basis — which restates both periods as if Versant and Sky Germany had never been part of the company — revenue rose 4.7% to $29.57 billion and Adjusted EBITDA fell 5.3% (to $8.92 billion from $9.42 billion), against a reported Adjusted EBITDA decline of 13.4%. That 4.7%-up / 5.3%-down pairing is the honest summary of the quarter: the remaining business grew its top line and lost profitability doing it.

Operating margin — the share of revenue left after all operating costs including depreciation, but before interest and tax. Adjusted EBITDA is Comcast's own profit measure for its segments: operating profit before depreciation, amortization and certain one-off items.

Takeaway: Comcast's connectivity business — three-quarters of revenue and the source of nearly all its cash — is now paying for growth with margin. Residential Connectivity & Platforms revenue fell 4.0% and its EBITDA fell twice as fast (−8.0%), because the "new go-to-market strategy" trades broadband pricing for slower subscriber losses and sells low-margin wireless lines in place of high-margin broadband dollars. Broadband net losses improved by only 34,000 year over year; broadband revenue fell $369 million. That is an expensive 34,000 customers.

Connectivity & Platforms: the price of stabilising broadband

Connectivity & Platforms revenue fell 3.0% to $19.80 billion, with Adjusted EBITDA down 5.7% to $7.96 billion and margin down 120 basis points to 40.2%. The split inside the segment matters:

• Residential Connectivity & Platforms — revenue −4.0% to $17.12 billion, Adjusted EBITDA −8.0% to $6.45 billion, margin down 160bps to 37.7%.
• Business Services Connectivity — revenue +3.7% to $2.67 billion, Adjusted EBITDA +5.0% to $1.52 billion, margin up 60bps to 56.7%. This is the only part of connectivity where revenue and profit are both rising, and it is rising on enterprise solutions rather than price.

The residential revenue lines show exactly where the money went:

Management attributes the broadband decline to "lower average rates and a decline in the number of domestic broadband customers" — note the order: price first, volume second. Comcast lost 167,000 domestic broadband customers in the quarter, better than the 201,000 lost a year ago, but the customer base is still 503,000 smaller than it was. The 5.5% revenue decline against a 1.7% smaller base means revenue per customer is falling, not just the customer count.

Wireless is the offset, and it is genuinely working: 448,000 net line additions, which Comcast describes as its best quarterly result on record, taking total lines past 10.19 million (+19.5% YoY). But wireless is not a like-for-like substitute for broadband dollars. Of the $216 million of incremental domestic wireless revenue, $91 million is equipment — phone sales, which carry little or no margin. Meanwhile non-programming operating expenses rose 2.1%, which the company attributes to "an increase in direct product costs, mainly due to growth in our domestic wireless business, higher marketing and promotion costs." In plain terms: Comcast is spending more to sell a cheaper product to keep customers from leaving.

There is a genuine mix signal buried here too. Domestic convergence revenue — broadband plus wireless service together, the way Comcast wants the business measured — was $7.29 billion, down 3.2%, a smaller decline than broadband alone. Domestic wireless service revenue grew $125 million against a $369 million broadband revenue decline, so wireless subscriptions are currently backfilling about a third of what broadband is losing.

Content & Experiences: Peacock crosses into profit, on a schedule that won't repeat

Content & Experiences revenue rose 22.9% to $10.73 billion and Adjusted EBITDA rose 7.1% to $1.33 billion. The 22.9% is inflated: it compares against a prior year restated to exclude Versant, and it includes $440 million of incremental FIFA World Cup revenue.

• Media: revenue +25.3% to $5.69 billion, or +15.6% excluding the World Cup. Adjusted EBITDA rose only 3.7% to $708 million — revenue up a quarter, profit up a twenty-fifth, because programming costs for NBA rights and the World Cup rose alongside it (segment operating expenses +29.1%, faster than revenue).
• Peacock, inside Media, generated $1.9 billion of revenue (vs. $1.2 billion) and Adjusted EBITDA of +$189 million against a $101 million loss a year ago — a $290 million swing and the streaming service's first profitable quarter. Paid subscribers rose by 2 million net additions in the quarter to 48 million, which management attributes to the NBA playoffs, the FIFA World Cup and Love Island USA.
• Studios: revenue +25.0% to $3.04 billion, Adjusted EBITDA $202 million vs. $61 million, driven almost entirely by theatrical revenue tripling to $972 million from $284 million on The Super Mario Galaxy Movie, Obsession and international distribution of Michael. Content licensing was flat at $1.80 billion.
• Theme Parks: revenue +2.7% to $2.41 billion but Adjusted EBITDA −5.1% to $609 million, margin down to 25.2% from 27.3%. Revenue grew only because Epic Universe (opened May 2025) was open for the full quarter, offset by weaker international parks; operating expenses rose 5.7%, twice the revenue growth rate.

The Peacock and Studios results deserve a caveat the headline doesn't carry. Peacock's first profitable quarter arrived in the quarter that contained both the NBA playoffs and a World Cup — the densest sports calendar Comcast will see for years. Those events drive subscriber sign-ups and advertising simultaneously, and the programming costs are already in this quarter's numbers, so the profit is real. But it is a profit earned at a seasonal peak, and the same slate is not available in Q3 or Q4. Similarly, Studios' EBITDA nearly quadrupled on the timing of three theatrical releases — a release-slate effect, not a step-change in the cost base.

Theme Parks is the clearest unambiguous negative in the quarter. Management's own language is "near-term softness," and a 2.7% revenue gain that produces a 5.1% profit decline means the incremental Epic Universe revenue is not covering the cost of running it.

Below the operating line: amortization flatters, the comparison doesn't

Total costs and expenses rose 1.9% to $24.78 billion against revenue down 1.2% — which is how a 1.2% revenue decline becomes a 13.9% operating income decline. Programming and production costs rose 10.7% to $8.39 billion (NBA, World Cup), and marketing and promotion rose 4.2% to $2.26 billion.

Running the other way, amortization fell 28.1% to $1.30 billion from $1.81 billion — acquisition-related intangibles from older deals rolling off. That is a $508 million tailwind to operating income that has nothing to do with operating performance, and it makes the 13.9% operating income decline better than the underlying trend, not worse.

Interest expense edged down to $1.05 billion from $1.11 billion. The effective tax rate was 25.9% (vs. 24.6%), with the year-ago rate helped by a $177 million benefit from an internal corporate reorganization.

Cash and capital returns: capex up, buyback paused

Free cash flow was $4.60 billion, up 2.3%, on operating cash flow of $8.09 billion (+3.5%). Capital expenditure rose 8.3% to $2.9 billion, with the composition shifting sharply: Connectivity & Platforms capex +19.9% to $2.3 billion on scalable infrastructure and customer premise equipment, while Content & Experiences capex fell 20.4% to $584 million as the Epic Universe build finished.

Comcast returned $2.1 billion — $1.2 billion in dividends and $900 million repurchasing 33.8 million shares. Then, on 29 June 2026, it paused the buyback entirely pending the separation of its businesses. That matters for anyone modelling EPS: the share count will stop shrinking, so future EPS growth has to come from earnings rather than from the denominator.

Forward read

Comcast gives no formal quarterly guidance, so what follows is management's stated direction plus our own reading.

What management has committed to: the announced intention to separate into two public companies via a tax-free spin-off of NBCUniversal and Sky, following the Versant separation already completed in January. The co-CEOs frame the broadband strategy as a deliberate "pivot" they expect to keep gaining traction, and describe theme park weakness as "near-term." The buyback stays paused through the separation work.

Our read: the separation is the dominant fact for the next several quarters, and it cuts both ways. It removes the possibility of judging Comcast on a stable comparable base — every reported growth rate for the next four quarters will need a pro forma footnote, as this one did — and it has already cost the equity its buyback support. Against that, it clarifies what is actually being valued: a connectivity business whose revenue is declining low-single-digits with margin compressing faster, and a content business whose profitability depends on a sports calendar and a theatrical slate that vary enormously quarter to quarter.

The number to watch next quarter is not broadband subscriber net losses — it is domestic broadband revenue. Comcast has demonstrated it can slow customer losses; the 34,000-unit improvement is real. It has not yet demonstrated it can do so without giving back more in price than it gains in volume, and at −5.5% the revenue line says it currently cannot. Q3 2026 will also be the first quarter to test Peacock's profitability without a World Cup or an NBA playoff run in it, which is the cleanest read available on whether streaming profitability is structural or seasonal.