Comcast added another 354,000 total broadband subscribers (334,000 residential and 20,000 business) in the second quarter of 2021, beating the 323,000 it added in the year-ago period. The U.S.’s largest broadband wireline provider ended the quarter with 31.38 million residential and business broadband customers, by far the most in the U.S.
Comcast’s broadband subscriber growth rate is very impressive, at 6.7% YoY, which was unchanged versus last quarter. Comcast Business was also a bright spot, with a strong acceleration in growth. Business services revenues were up 9.9% YoY, a huge acceleration from the 6.1% YoY rise last quarter and a beat versus consensus growth of 8.8%.
The strong results are way better than Comcast’s two largest competitors – AT&T and Verizon – which both reported poor Business Wireline results.
New Street Research analysts noted Comcast’s broadband net additions were “well above estimates,” noting it had previously forecast gains of 253,000 and the market consensus estimate was 270,000. Cavanaugh said the operator is now expecting total broadband net additions for 2021 to be up in the “mid-teens” compared to the 1.4 million net adds it posted in 2019.
- Cable Segment revenue growth of 10.9% was fully 200 bps ahead of Wall Street consensus for 8.9% YoY growth – but indeed for every sub-segment.
- Broadband revenues were up 14.3% YoY on a reported basis (versus 13.6% consensus); adjusted for RSN credits in Q2 2020, broadband revenues were up 12.6% YoY.
- Business Services revenues were up 9.9% YoY (versus 8.8% consensus).
- Wireless revenues were up 70.6% YoY (versus 63.4%).
- Comcast’s Xfinity Mobile service added 280,000 mobile lines, a quarterly record for the company, up from adds of 126,000 in the year-ago period. Comcast, which launched mobile (via its MVNO with Verizon) in 2017, ended Q2 2021 with 3.38 million mobile lines. Mobile revenues rose 70.4%, to $556 million.
Dave Watson, CEO of Comcast Cable, said mobile is now tied into every sales channel. And the launch of a new unlimited plans focused on multi-line customers has also led to a “nice shift in mix,” he said.
Cable Communications CAPEX of $1.7 billion was up 16.8% year-on-year in Q2, accounting for 10.6% of the division’s revenue compared to 10.1% of revenue in the year-ago period.
In addition to investments in scalable infrastructure to increase network capacity, Comcast CFO Michael Cavanaugh said on an earnings call the money was spent on broadband CPE and line extensions.
“We have decided to move a bit faster to the next phase of DOCSIS using very cost-effective technology,” he said.
CEO Brian Roberts noted the company has been trialing gigabit and multi-gigabit symmetrical speeds since October 2020 “to great success.” While upstream traffic comprises only 10% of broadband usage on its network and “we don’t really have a consumer use case” for symmetrical speeds yet, “the strategy for our network is to plan ahead,” he said.
“We’re investing in architecture that allows us to go beyond where consumers are, and we can do all of this in a way that won’t affect the capital intensity ratios we currently enjoy,” he added.
Video sub losses continue but less than expected:
Comcast lost another 399,000 total video subs (364,000 residential and 34,000 business) in the period, improved from a year-ago loss of 477,000 customers. Comcast ended Q2 2021 with 18.95 million total video subs.
Nevertheless, video revenues were up 2.6% YoY (versus 0.8% consensus). Adjusted for Regional Sports Networks (RSN) credits in Q2 2020, video revenues were up 0.5% YoY.
Comcast remains excited about Flex, a video streaming/smart home product it offers for no added cost to broadband-only subscribers. Watson said Comcast has deployed more than 3.8 million Flex boxes, up from the 3.5 million the company reported in May.
Consolidated revenue of $28.5 billion grew 20.4% year-on-year, with net income attributable to Comcast up 25.1% to $3.7 billion. Sales for the Cable Communications business increased 10.9% year-on-year to $16 billion.
Broadband revenue was up 14.3% to $5.7 billion, video revenue increased 2.6% to nearly $5.6 billion, business services revenue increased 9.9% to $2.2 billion and wireless revenue jumped 70.4% to $556 million.