Comcast's broadband business — the engine that funds everything else — is now losing revenue roughly three times faster than it is losing customers. Domestic broadband revenue fell 5.5% to $6.28 billion in the second quarter while the domestic broadband customer base shrank only 1.7% year over year to 28.49 million, implying a derived monthly revenue per customer of about $73.5 versus $76.5 a year earlier. That gap is not an accident: management states it simplified broadband pricing and began offering a free wireless line for one year to new and existing customers, a deliberate decision to defend volume with price. Quarterly subscriber losses did narrow to 167,000 from 201,000, so the retention strategy is producing something — but the reported 68.3% collapse in net income is almost entirely optical, driven by a $9.4 billion Hulu sale gain booked in the prior-year quarter.
1. Condensed Consolidated Balance Sheet
1-1. Major asset movements
| Item | Dec 31, 2025 ($M) | Jun 30, 2026 ($M) | Change % |
|---|---|---|---|
| Cash and cash equivalents | 9,481 | 7,661 | -19.2% |
| Receivables, net | 13,869 | 13,955 | +0.6% |
| Film and television costs | 12,214 | 10,467 | -14.3% |
| Property and equipment, net | 65,680 | 66,127 | +0.7% |
| Goodwill | 61,502 | 53,070 | -13.7% |
| Franchise rights | 59,365 | 59,365 | 0.0% |
| Other intangible assets, net | 22,474 | 19,687 | -12.4% |
| Total assets | 272,631 | 257,548 | -5.5% |
The $15.1 billion contraction in total assets is a corporate event, not an operating one. Comcast completed the tax-free spin-off of Versant Media Group on January 2, 2026 — the cable networks including CNBC, USA Network, Golf Channel, E! and SYFY, plus digital properties such as Fandango and Rotten Tomatoes. That single transaction removed $7.7 billion of goodwill and $8.1 billion of retained earnings; the remaining $0.7 billion of the total goodwill decline came from foreign currency translation and other items. A second disposal followed: Sky's German operations were sold on May 31, 2026 for net pre-tax cash proceeds of just $59 million, derecognizing $770 million of assets against $644 million of liabilities and booking a $67 million pre-tax loss. Selling a business of that size for $59 million is a signal about the economics being shed rather than the value being harvested.
Franchise rights held at exactly $59,365 million on both dates. These are indefinite-lived intangibles carried at historical cost under US GAAP with no upward revaluation permitted, so the balance sheet carrying value of Comcast's cable footprint tells an investor nothing about its current market worth in either direction. Film and television costs fell 14.3%, with licensed content including sports advances dropping from $4,663 million to $3,255 million as prepaid sports rights were consumed.
1-2. Debt structure
Total debt fell to $90.4 billion from $98.9 billion at year-end — $6,117 million current and $84,264 million noncurrent — an $8.5 billion reduction in six months. Net of $7.66 billion cash, net debt stands at roughly $82.7 billion. The more revealing disclosure is in Note 5: this debt carries an estimated fair value of $79.7 billion against $90.4 billion of carrying value, meaning the market prices Comcast's obligations at about 88 cents on the dollar. That discount is a function of legacy coupons sitting below current market rates — economically favorable to Comcast, since refinancing this stock at today's rates would cost more.
On the operating liability side, accounts payable and accrued expenses related to trade creditors rose 7.3% to $11,864 million while deferred revenue fell 7.6% to $3,787 million. Falling deferred revenue alongside falling video and broadband subscriber counts is internally consistent — it is prepaid subscription billings shrinking with the base.
1-3. Equity structure
Total equity fell 7.6% to $89,770 million. The bridge is unambiguous. Retained earnings dropped from $66,675 million to $60,298 million despite $5,699 million of net income, because the Versant separation charged $8,107 million directly through retained earnings, dividends declared took $2,371 million, and buybacks absorbed $1,597 million of retained earnings plus $867 million of additional paid-in capital. Accumulated other comprehensive income swung from -$8 million to -$743 million, reflecting $763 million of currency translation losses partially offset by $28 million of other OCI items. Additional paid-in capital was essentially flat at $37,680 million as $769 million of share-based compensation partially offset repurchases — Comcast retires shares rather than warehousing them, with treasury stock unchanged at -$7,517 million.
Balance check: $33,093M current liabilities + $84,264M noncurrent debt + $28,940M deferred taxes + $21,296M other noncurrent + $185M redeemable NCI + $89,770M equity = $257,548M, tying exactly to total assets.
2. Condensed Consolidated Statement of Income
2-1. Core earnings metrics
| Item | Q2 2025 ($M) | Q2 2026 ($M) | Change % |
|---|---|---|---|
| Revenue | 30,313 | 29,940 | -1.2% |
| Programming and production | 7,576 | 8,389 | +10.7% |
| Operating income | 5,992 | 5,160 | -13.9% |
| Operating margin (%) | 19.77 | 17.23 | -253 bp |
| Investment and other income, net | 9,760 | 503 | -94.8% |
| Net income attributable to Comcast | 11,123 | 3,526 | -68.3% |
| Diluted EPS ($) | 2.98 | 0.99 | -66.8% |
| Adjusted EBITDA (non-GAAP) | 10,283 | 8,902 | -13.4% |
The headline earnings decline requires immediate deflation. Prior-year "other income, net" of $9,760 million included what the filing explicitly describes as a $9.4 billion gain from the sale of Comcast's interest in Hulu. Strip that from pre-tax income and the prior-year comparable is roughly $5,247 million against $4,612 million this quarter — a 12.1% decline, not 68%. The EPS optics are further flattered by a 4.2% reduction in diluted share count to 3,570 million.
The second correction is Versant. Prior-year results consolidate Versant; current results do not. Versant contributed $1,770 million of revenue and $789 million of Adjusted EBITDA in Q2 2025. On a rough like-for-like basis, stripping Versant's $1,770M of revenue and $789M of Adjusted EBITDA from the prior-year quarter implies revenue growth of roughly 5% and an Adjusted EBITDA decline of roughly 6%. (Comcast does not disclose an ex-Versant pro forma; eliminations between Versant and Comcast segments complicate a clean subtraction.) That is the honest shape of this quarter: Comcast is adding revenue that carries structurally lower margin while its highest-margin revenue erodes.
The mechanism sits in one line. Programming and production costs rose 10.7% in the quarter and 20.5% for the half ($19,273M versus $15,991M) as the NBA season that began in Q4 2025 layered onto the Milan Cortina Olympics, Super Bowl and FIFA World Cup. Amortization partially masked this, falling 28.1% to $1,297 million as Versant-related customer relationship intangibles left the books.
A note on the non-GAAP measure: Comcast's Adjusted EBITDA of $8,902 million sits only $54 million above operating income plus depreciation and amortization ($8,848M). Unlike many US filers, the adjustments beyond D&A are trivial — 0.6% this quarter versus $137 million a year ago. This is close to unadjusted EBITDA and can be relied on more than the label suggests.
Operating leverage is running sharply negative — H1 revenue rose 2.0% while operating income fell 20.2% — but this is a cost-mix effect from sports rights and the Versant deconsolidation, not classic fixed-cost deleveraging. Viewed across three second quarters, operating income has fallen from $6,635 million (Q2 2024) to $5,992 million (Q2 2025) to $5,160 million, a cumulative 22.2% decline, though the final step includes the Versant removal.
2-2. Segment results — where margin actually lives
| Segment (Q2) | Revenue 2025 ($M) | Revenue 2026 ($M) | Adj. EBITDA 2025 ($M) | Adj. EBITDA 2026 ($M) | EBITDA Chg |
|---|---|---|---|---|---|
| Residential Connectivity & Platforms | 17,839 | 17,124 | 7,006 | 6,448 | -8.0% |
| Business Services Connectivity | 2,575 | 2,671 | 1,444 | 1,516 | +5.0% |
| Media | 4,543 | 5,691 | 683 | 708 | +3.7% |
| Studios | 2,432 | 3,040 | 61 | 202 | +231% |
| Theme Parks | 2,349 | 2,413 | 641 | 609 | -5.0% |
| Total segment | — | — | 9,835 | 9,483 | -3.6% |
Media grew revenue $1,148 million and generated $25 million of incremental EBITDA. That ratio is the NBA and World Cup economics in a single line — Media programming and production costs rose 34.1% to $3,699 million in the quarter and 65.6% to $10,003 million for the half, driving H1 Media EBITDA down 64.3% to $282 million from $790 million. Encouragingly, the underlying business is not stagnant: excluding Olympics, Super Bowl and World Cup revenue of $440 million in the first half, Media revenue still rose 15.6%, with domestic advertising up 23.5% ex-events and domestic distribution up 22.1%.
Business Services Connectivity is the quiet standout — expanding revenue while lifting its EBITDA margin to 56.8% from 56.1%, the only connectivity segment to do both (Studios also expanded margin, from 2.5% to 6.6%, but off a near-zero base), helped by growth in enterprise solutions offerings; the April 2025 Nitel acquisition is cited by management as a driver of the six-month increase, not the quarterly one. Studios swung on theatrical, which jumped from $284 million to $972 million. Theme Parks decelerated to 2.7% revenue growth with EBITDA down 5.0%, as the Epic Universe opening comparison from May 2025 lapped.
3. Condensed Consolidated Statement of Cash Flows
| Item (Six months) | H1 2025 ($M) | H1 2026 ($M) | Change |
|---|---|---|---|
| Net cash from operating activities | 16,109 | 14,983 | -7.0% |
| Capital expenditures | (4,930) | (5,253) | +6.6% |
| Cash paid for intangible assets | (1,257) | (1,226) | -2.5% |
| Net cash used in investing | (7,903) | (6,491) | — |
| Net cash used in financing | (5,881) | (10,313) | — |
| Ending cash and restricted cash | 9,748 | 7,735 | -20.7% |
Free cash flow, defined as operating cash flow less capital expenditures, was $9,730 million versus $11,179 million, down 13.0%. Deducting the $1,226 million paid for intangible assets — a genuine recurring outlay for a business that capitalizes software and rights — leaves $8,504 million versus $9,922 million.
Earnings quality needs the same Hulu correction applied above. Operating cash flow to net income attributable reads 2.63x this year against 1.11x last year, an apparent improvement that is meaningless because the prior year's denominator carried a $9.4 billion non-cash gain (removed in the reconciliation as $9,390 million of "net gain on investment activity"). Normalizing the prior-year denominator to roughly $5.1 billion gives approximately 3.16x, against 2.63x now. Cash conversion softened rather than improved. The working capital detail supports this: receivables consumed $1,338 million of cash this year versus releasing $1,023 million last year — a $2.4 billion adverse swing worth monitoring.
Capital intensity is rising modestly, with capex at 8.6% of revenue versus 8.2%, or 10.6% including intangibles. This remains growth-oriented spending: domestic residential passings expanded 1.9% to 59.4 million, meaning Comcast continues extending its network even as penetration of those passings falls from 49.7% to 47.9%.
Financing tells the clearest strategic story. Comcast repaid $7,344 million of debt against $1,990 million of new borrowings, a net $5,354 million reduction, while cutting buybacks 38% to $2,507 million from $4,066 million. Dividends held essentially flat at $2,432 million ($0.33 per share quarterly, unchanged year over year). Total shareholder returns of $4,939 million represent 50.8% of free cash flow, down from $6,528 million. Management is prioritizing the balance sheet over share count ahead of the next separation.
4. Additional Analysis
The convergence trade is not yet paying. Domestic wireless lines grew 19.5% year over year to 10.19 million with 448,000 net additions in the quarter versus 378,000, and wireless service revenue rose 14.2% to $1,007 million. But "domestic convergence revenue" — Comcast's own combined broadband-plus-wireless metric — still fell 3.2% to $7,287 million. Wireless growth of $125 million did not offset broadband's $369 million decline. The free-wireless-line offer is buying line counts