Comcast Q3 2026 Earnings: Peacock Profitability Contrasts with Connectivity Pressure

Comcast (NASDAQ: CMCSA) reported Q3 2026 revenue of $29.30 billion, down 6.1% year over year, while diluted EPS increased 7.2% to $0.97. Portfolio-adjusted results were roughly stable, but adjusted EPS and free cash flow declined as stronger Media and Studios performance contrasted with pressure in residential connectivity and theme parks.

Core Earnings Data

The reported revenue decline largely reflected portfolio changes, including the Versant separation completed on January 2, 2026, and the sale of Sky’s German operations completed on May 31. On a pro forma basis reflecting both transactions, revenue increased 0.5% and adjusted EBITDA rose 0.8%.

GAAP net income and EPS increased, while adjusted net income fell 7.3% and adjusted EPS declined 4.0%. Cash generation also weakened, with operating cash flow and free cash flow both below the prior-year quarter.

Pro forma figures are non-GAAP measures that treat the Versant separation and Sky Germany sale as if both had occurred on January 1, 2024.

Business and Segment Performance

Comcast’s two major operating groups moved in opposite directions. Connectivity & Platforms recorded lower revenue and adjusted EBITDA, while Content & Experiences benefited from substantial Media profit growth and improved Studios earnings.

Residential Connectivity & Platforms remained the main source of pressure. Domestic broadband revenue declined 4.7% because of lower average rates and fewer customers. Comcast lost 144,000 domestic residential broadband customers, compared with a loss of 91,000 a year earlier. Video revenue fell 8.7%, accompanied by 274,000 customer losses.

Wireless partially offset those declines. Domestic wireless service revenue increased 14.7%, reflecting customer growth and the conversion of promotional free lines to paid service. Equipment revenue rose 43.6% on higher device sales, while Comcast added 368,000 wireless lines to reach 10.6 million in total.

Business Services Connectivity revenue grew 2.7%, led by enterprise solutions, and adjusted EBITDA rose 1.7%. Expenses increased faster than revenue because of higher direct product, marketing, and promotion costs, reducing the segment’s adjusted EBITDA margin by 50 basis points to 55.9%.

Studios revenue slipped 1.1% as a 23.7% decline in content licensing, caused by the timing of television content availability, outweighed a 76.6% increase in theatrical revenue. Lower operating costs helped Studios adjusted EBITDA rise 18.6% to $402 million. Theme Parks moved in the opposite direction: increased promotional activity pressured admissions revenue, while higher domestic park operating costs contributed to a 17.1% EBITDA decline.

Peacock Profitability and Event Revenue Lifted Media

Peacock delivered its second consecutive profitable quarter, generating $261 million of adjusted EBITDA compared with a $217 million loss a year earlier—an improvement of $478 million. Revenue rose from $1.4 billion to $1.8 billion, while paid subscribers increased 17% to 48 million. Higher average rates and subscriber growth also helped domestic Media distribution revenue increase 22.4%.

The FIFA World Cup provided an additional boost, contributing $224 million of incremental Media revenue. Media revenue increased 13.0% as reported and 8.3% excluding the event. Domestic advertising revenue rose 14.6%, but was approximately flat after excluding the World Cup contribution, showing that much of the advertising increase was event-driven.

Profitability, Cash Flow, and Capital Allocation

Connectivity & Platforms’ adjusted EBITDA margin declined 70 basis points to 38.6%. Residential margin fell 90 basis points to 35.9%, as lower revenue and higher direct product costs associated with wireless growth outweighed lower programming, technical, and support expenses.

Operating cash flow decreased by $791 million to $7.90 billion, while free cash flow fell by $734 million to $4.21 billion. Total capital expenditures remained approximately flat at $3.1 billion. Connectivity & Platforms capital spending increased 3.6% to $2.4 billion, mainly because of higher customer-premises equipment spending, while Content & Experiences capital expenditures declined 10.6% to $639 million.

Comcast paid $1.2 billion in dividends during the quarter. The company suspended share repurchases beginning in Q3 and expects the pause to continue through its proposed separation into two independently traded companies.

Management’s View

Co-CEOs Brian Roberts and Mike Cavanagh said near-term Connectivity & Platforms results reflect investments intended to address a more dynamic competitive environment. Management highlighted improving customer satisfaction, the conversion of free wireless lines to paid plans, wider adoption of premium wireless offerings, and continued enterprise growth within Business Services.

Management characterized the pressure at Theme Parks as cyclical while maintaining confidence in the business’s long-term potential. It also said work on the proposed corporate separation remains on track, although no new quantitative outlook was provided.

Risks Investors Should Monitor

• Broadband customer and pricing pressure: Domestic broadband revenue fell 4.7% as lower average rates combined with a larger customer loss than in the prior-year quarter.
• Residential margin compression: Investments in go-to-market initiatives and higher wireless-related product costs contributed to a 90-basis-point decline in Residential Connectivity & Platforms’ margin.
• Theme park promotions and costs: Lower admissions revenue and higher domestic operating expenses caused Theme Parks EBITDA to fall much faster than revenue.
• Event and content timing effects: The World Cup materially supported advertising revenue, while Studios licensing results depended on when content became available.
• Lower cash generation: Free cash flow declined 14.8%, and share repurchases are paused during the proposed separation process.

Summary

Comcast’s portfolio-adjusted Q3 results were broadly stable, but the operating mix changed meaningfully. Peacock’s move into profitability and improved Studios earnings strengthened Content & Experiences, while broadband customer losses, lower residential rates, and weaker theme park economics pressured other parts of the company. The main indicators to follow are broadband customer trends, connectivity margins, the sustainability of Peacock’s profitability, theme park demand, and free cash flow.