Comcast Corporation (NASDAQ: CMCSA) beat the adjusted EPS estimate by $0.09 in Q3. The headline number looks tidy. Beneath it, two businesses are moving in opposite directions.
Streaming has found its footing. Connectivity keeps slipping.
Consolidated revenue of $29.3B fell 6.1% as reported. Almost entirely structural. Strip out the Versant separation and the Sky Germany sale, and revenue was flat on a pro forma basis. Adjusted EBITDA of $9.1B dropped 5.8% reported but rose 0.8% pro forma. Free cash flow came in at $4.2B, down 14.8% year-over-year, with capex holding at $3.1B.
The beat itself: adjusted EPS of $1.07 versus the $0.98 consensus. Still down 4% from a year ago. GAAP EPS rose 7.2% to $0.97, flattered by a lower share count from buybacks earlier in the year.
Those buybacks are now suspended. Comcast halted repurchases in Q3 and expects the pause to continue through the planned separation of NBCUniversal and Sky. The company paid $1.2B in dividends during the quarter.
Peacock delivered the quarter's clearest result: $261M in Adjusted EBITDA on $1.8B in revenue, its second consecutive profitable quarter. Paid subscribers rose 17% year-over-year to 48 million. The $478 million year-over-year EBITDA improvement is dramatic. It comes with context. FIFA World Cup revenue added $224 million to Media revenue in the quarter. Exclude that, and Media revenue still grew 8.3%, lifted by higher Peacock distribution rates and subscriber growth. The open question is whether Peacock can replicate this in quarters without a global tournament.
Studios EBITDA rose 18.6% to $402 million. The driver was *The Odyssey*, which has grossed nearly $1.8B globally and become Universal's highest-grossing film ever. Theatrical revenue surged 76.6% to $1.1B, more than offsetting a 23.7% decline in content licensing. The film slate is a volatile swing factor. This quarter, it swung decisively.
Connectivity tells a different story. Domestic broadband lost 144,000 residential customers, worse than the 91,000 lost a year ago. Residential Connectivity & Platforms revenue fell 3.5% to $17.0B. Adjusted EBITDA margin contracted 90 basis points to 35.9%. Management cited investments in the go-to-market strategy. Translation: they are spending to slow the bleeding. Fixed wireless access and fibre overbuilders continue to pressure the business. The 144K loss suggests competition has not abated.
Wireless provided a partial offset. Domestic wireless net adds of 368,000 brought total lines to 10.6 million. Wireless service revenue rose 14.7% to $1.05B, driven by customer growth and the conversion of promotional free lines to paid service. Wireless equipment revenue jumped 43.6% to $475 million. Customer acquisition carries upfront costs. The business is growing. It is not yet a profit centre.
Theme Parks dragged. Revenue fell 4.4% to $2.6B. Adjusted EBITDA dropped 17.1% to $780 million. Management pointed to increased promotional activity and higher operating costs at domestic parks. The long-term thesis holds. Near-term cyclical pressure is real.
The NBCUniversal-Sky separation frames everything. Suspending buybacks signals management's desire to preserve balance-sheet flexibility for the spin-off. The company spent $2.5B on repurchases in the first nine months. That capital is now being conserved. Comcast is effectively in a holding pattern until the transaction closes.
What matters next: whether Peacock stays profitable without World Cup revenue, whether broadband losses find a floor or accelerate, and how the spin-off timeline reshapes capital allocation. The Q3 print confirms that Comcast's content engine functions. Its connectivity business is still searching for one.