# How Comcast makes money

CXProWealth Business Lens · Comcast (CMCSA) · Q3 FY2026

Read from the 10-Q for the period 2026-07-01 to 2026-09-30, filed 2026-10-22 with the SEC (accession 0001628280-26-066863): https://www.sec.gov/Archives/edgar/data/1166691/000162828026066863/

Business Lens explains how a company earns, spends and keeps its money, from its own filings. It is insight and context, never a view on the shares, a target, or advice. Figures are raw units as filed; percentages are percentage points.

## Headline figures

- Revenue: $29.3B (-6.1% on the year)
- Operating income: $5.3B (operating margin 18.2%)
- Net income: $3.4B (net margin 11.8%)
- Gross margin: not reported (the company reports expenses by nature: no cost of revenue or gross profit line exists)
- Free cash flow: $4.8B (16.5% of revenue)
- Cash conversion (operating cash flow / net income): 2.29x
- Capital expenditure: 10.4% of revenue

## Where the money goes (Q3 FY2026)

- Revenue → Total costs and expenses: $24.0B
- Total costs and expenses → Programming and production: $7.5B
- Total costs and expenses → Depreciation: $2.4B
- Total costs and expenses → Amortization: $1.3B
- Total costs and expenses → Other operating and administrative: $10.6B
- Total costs and expenses → Marketing and promotion: $2.1B
- Revenue → Operating income: $5.3B
- Operating income → Interest expense: $962.0M
- Operating income → Income before income taxes: $4.4B
- Investment and other income (loss), net → Income before income taxes: $88.0M
- Income before income taxes → Income tax expense: $1.1B
- Income before income taxes → Net income: $3.4B
- Net income → Net income attributable to Comcast Corporation: $3.4B
- Less: Net income (loss) attributable to noncontrolling interests → Net income attributable to Comcast Corporation: $87.0M

## Where the revenue comes from

### Segments (Segment Information - Schedule of Segment Information (Details))

| Member | Value | Share |
|---|---:|---:|
| Total Residential Connectivity & Platforms Segment | $17.0B | 58.1% |
| Total Media Segment | $5.4B | 18.3% |
| Total Studios Segment | $3.0B | 10.1% |
| Total Business Services Connectivity Segment | $2.6B | 9.0% |
| Total Theme Parks Segment | $2.6B | 8.9% |

The members do not sum to total revenue.

### ConsolidationItems (Revenue - Schedule of Disaggregation of Revenue (Details))

| Member | Value | Share |
|---|---:|---:|
| Operating Segments | $30.6B | 104.4% |
| Headquarters/Corporate and Other | $355.0M | 1.2% |
| Eliminations | -$1.6B | -5.6% |

The members sum to total revenue.

## Income statement, as filed

| Line | Q3 FY2026 | Of revenue |
|---|---:|---:|
| Revenue | $29.3B | 100% |
| Programming and production | $7.5B | 25.7% |
| Marketing and promotion | $2.1B | 7.2% |
| Other operating and administrative | $10.6B | 36.3% |
| Depreciation | $2.4B | 8.1% |
| Amortization | $1.3B | 4.5% |
| **Total costs and expenses** | $24.0B | 81.8% |
| **Operating income** | $5.3B | 18.2% |
| Interest expense | ($962.0M) | 3.3% |
| Investment and other income (loss), net | $88.0M | 0.3% |
| **Income before income taxes** | $4.4B | 15.2% |
| Income tax expense | ($1.1B) | 3.7% |
| **Net income** | $3.4B | 11.5% |
| Less: Net income (loss) attributable to noncontrolling interests | -$87.0M | 0.3% |
| **Net income attributable to Comcast Corporation** | $3.4B | 11.8% |
| Basic earnings per common share attributable to Comcast Corporation shareholders (in dollars per share) | $1 | 0.0% |
| Diluted earnings per common share attributable to Comcast Corporation shareholders (in dollars per share) | $1 | 0.0% |

## History

| Period | Revenue | Operating income | Net income | Operating cash flow | Capital expenditure | Free cash flow |
|---|---:|---:|---:|---:|---:|---:|
| FY2007 | $31.1B | $5.6B | $2.6B | $8.2B | $6.2B | $2.0B |
| FY2008 | $34.4B | $6.7B | $2.5B | $10.2B | $5.8B | $4.5B |
| FY2009 | $35.8B | $7.2B | $3.6B | $10.3B | $5.1B | $5.2B |
| FY2010 | $37.9B | $8.0B | $3.6B | $11.2B | $5.0B | $6.2B |
| FY2011 | $55.8B | $10.7B | $4.2B | $14.3B | $5.3B | $9.0B |
| FY2012 | $62.6B | $12.2B | $6.2B | $14.9B | $5.7B | $9.1B |
| FY2013 | $64.7B | $13.6B | $6.8B | $14.2B | $6.6B | $7.6B |
| FY2014 | $68.8B | $14.9B | $8.4B | $16.9B | $7.4B | $9.5B |
| FY2015 | $74.5B | $16.0B | $8.2B | $19.5B | $8.5B | $11.0B |
| FY2016 | $80.7B | $16.8B | $8.7B | $19.7B | $9.1B | $10.6B |
| FY2017 | $85.0B | $18.0B | $22.7B | $21.3B | $9.6B | $11.7B |
| FY2018 | $94.5B | $19.0B | $11.7B | $24.3B | $9.8B | $14.5B |
| FY2019 | $108.9B | $21.1B | $13.1B | $25.7B | $10.0B | $15.7B |
| FY2020 | $103.6B | $17.5B | $10.5B | $24.7B | $9.2B | $15.6B |
| FY2021 | $116.4B | $20.8B | $14.2B | $29.1B | $9.2B | $20.0B |
| FY2022 | $121.4B | $14.0B | $5.4B | $26.4B | $10.6B | $15.8B |
| FY2023 | $121.6B | $23.3B | $15.4B | $28.5B | $12.2B | $16.3B |
| FY2024 | $123.7B | $23.3B | $16.2B | $27.7B | $12.2B | $15.5B |
| FY2025 | $123.7B | $20.7B | $20.0B | $33.6B | $11.8B | $21.9B |

Latest trend (the newest full year against the year before; a reading, not a forecast):

- Revenue: -0.0% (year before +1.8%): steady
- Operating income: -11.3% (year before -0.1%): slowing
- Net income: +23.5% (year before +5.2%): accelerating
- Free cash flow: +41.3% (year before -4.7%): accelerating

## Operating figures stated in the filing

- Peacock paid subscribers: 48,000,000 subscribers (as of 2026-09-30). "We had 48 million and 41 million paid subscribers of Peacock as of September 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Peacock paid subscribers: 41,000,000 subscribers (as of 2025-09-30). "We had 48 million and 41 million paid subscribers of Peacock as of September 30, 2026 and 2025, respectively." (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Domestic broadband penetration of residential passings: 47.5% (as of 2026-09-30). "Domestic broadband residential penetration of residential passings (d) 47.5 % 49.3 %" (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)
- Domestic broadband penetration of residential passings: 49.3% (as of 2025-09-30). "Domestic broadband residential penetration of residential passings (d) 47.5 % 49.3 %" (Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS)

## Key insights

### Lower amortization, not leaner operations, lifted the margin

Operating margin rose 0.42 points to 18.2%, but amortization alone fell 0.86 points of revenue after Versant left, so other costs took a larger share.

Revenue fell 6.1% to $29.3B and total costs fell 6.6% to $24.0B, so operating income fell 3.9% to $5.3B while the operating margin rose to 18.2% from 17.7%. Amortization fell 21.1% to $1.3B, its share of revenue down 0.86 points to 4.5%. The filing ties the drop to "lower amortization of customer relationships and other agreements and rights due to the Versant Separation." _(from the filing)_
The other cost lines moved the other way on balance. Programming and production fell 13.2% to $7.5B, 2.09 points less of revenue at 25.7%. But other operating and administrative expense fell only 1.4%, rising 1.73 points to 36.3% of revenue; depreciation rose 1.4% to $2.4B, up 0.6 points to 8.1%; and marketing and promotion rose 0.19 points to 7.2%. Together those offset the programming saving and a little more. _(from the filing)_
Analysis: amortization is an accounting charge for assets acquired or built in earlier years and uses no cash in the quarter, so a margin gain built on it says little about how the operations are running. Excluding it, costs took a slightly larger share of revenue than a year earlier. Programming fell with the businesses that left the group, while the cost of running the network, serving customers and operating the parks held up. _(analysis)_
The comparison is not like for like. The year-earlier quarter includes Versant and the Sky operations in Germany, both now gone, and the filing attributes the fall in costs primarily to those two changes and to a decrease in Connectivity & Platforms, "partially offset by an increase in the Content & Experiences business." _(from the filing)_

### Lower interest and tax turned falling profit into growth

Operating income fell 3.9%, yet net income attributable to Comcast rose 3.5% to $3.45B, because interest expense fell 14.7% and tax expense 11.0%.

Interest expense fell to $962M from $1,128M, which the filing attributes to "a decrease in average debt outstanding." Interest took 18.1% of operating income, against 20.4% a year earlier. Investment and other income added $88M, against $61M. _(from the filing)_
Income tax expense fell to $1,084M from $1,218M, an effective rate of 24.4% of pre-tax income against 27.3% a year earlier. The filing attributes the decrease "primarily" to "the timing and amount of third-party transferable tax credit purchases." Diluted earnings per share rose to $0.97 from $0.90, helped also by fewer shares outstanding. _(from the filing)_
Analysis: the two supports differ in durability. Lower interest follows from debt already repaid, and with the share buyback suspended for the spin-off, more cash is free for repayment. The tax saving rests, in the filing's own words, on the timing and amount of credit purchases, so it need not recur in the same pattern in later quarters. _(analysis)_

### A fixed network now serves a smaller share of homes

Broadband penetration fell to 47.5% of homes passed from 49.3%, while consolidated depreciation rose 1.4%: the network's costs stay as paying homes thin out.

Residential Connectivity & Platforms brought in $17.0B, 58.1% of revenue, and Business Services Connectivity $2.6B, 9.0%, both on a shared network. Domestic broadband penetration, broadband customers divided by residential passings, was 47.5%, against 49.3% a year earlier. The filing says broadband revenue fell "due to decreases in average rates and declines in the number of domestic broadband customers." _(from the filing)_
Consolidated depreciation rose 1.4% to $2.4B while revenue fell 6.1%, lifting it 0.6 points to 8.1% of revenue. Capital spending was $3.1B, 10.4% of revenue. The filing says the company continues "to invest in our network to support higher-speed broadband offerings and to expand the number of residential and business passings." _(from the filing)_
Analysis: penetration can fall from either side, fewer customers or more homes passed, and here both are happening, since the company is extending its reach while losing broadband customers. In a network business most cost does not move with the customer count, so a home lost takes revenue with little cost relief, and a home won inside the existing footprint adds revenue at little added cost. _(analysis)_
The filing describes the response: simpler broadband pricing and a free wireless line for new and existing broadband customers, which it expects "will improve customer retention" but "will negatively impact average domestic broadband revenue per customer." It adds that customer relationship net additions "continue to be negatively impacted by an increasingly competitive environment." _(from the filing)_

### Capital spending holds steady as operating cash flow shrinks

Capital spending stayed at $3.1B while operating cash flow fell to $7.9B from $8.7B, so free cash flow dropped to $4.8B from $5.6B.

Capital spending took 38.7% of operating cash flow in the quarter, against 35.3% a year earlier, and equaled 10.4% of revenue. Free cash flow was still 16.5% of revenue and exceeded net income attributable to Comcast, because depreciation and amortization reduce profit without using cash. _(from the filing)_
For the nine months, the filing says capital expenditures rose "primarily due to increased spending by the Connectivity & Platforms businesses," mainly "on customer premise equipment and scalable infrastructure," partly offset by lower Content & Experiences spending after the opening of Epic Universe. _(from the filing)_
Analysis: the year-earlier quarter still contained Versant, so part of the fall in operating cash flow reflects a smaller company rather than weaker operations. The point to follow is whether capital spending eases as a share of operating cash flow once network upgrades and the separation work settle, or keeps rising while the kept businesses shrink. _(analysis)_

### Competitive edge

- **One network sells to homes and businesses alike** Residential and business connectivity bring in $17.0B and $2.6B, 58.1% and 9.0% of revenue, on infrastructure the two segments share.
- **Peacock grows on content the group already owns** Peacock reached 48 million paid subscribers from 41 million a year earlier, drawing on NBC networks, sports rights and Studios content licensed inside the group.
- **Operating cash flow runs at 2.3 times net profit** Operating cash flow of $7.9B was 2.3 times net income attributable to Comcast of $3.45B, funding capital spending and debt repayment from operations.

### What to watch

- **The NBCUniversal spin-off is not yet certain** The planned separation needs board approval, tax opinions, regulatory approvals and financing, and the filing says it could be delayed or not happen at all.
- **Competition is pushing down broadband rates and customer numbers** Broadband revenue fell on lower average rates and fewer customers, and penetration slid to 47.5% from 49.3% despite the free wireless line offer.
- **Linear TV keeps shrinking while Peacock still costs heavily** The filing expects linear network subscribers and ratings to keep declining, and significant Peacock content and marketing costs to continue.

## Investor view

**Broadband penetration slipped to 47.5% of homes passed as Comcast prepares to spin off NBCUniversal**

### How it makes money

Comcast earns most of its money from connections. In the third quarter, Residential Connectivity & Platforms, which sells broadband, wireless and video to homes in the US and, through Sky, in the UK and Italy, brought in $17.0B, 58.1% of total revenue of $29.3B. Business Services Connectivity, the same network sold to companies, added $2.6B, 9.0% of revenue. _(from the filing)_
The content side is smaller. Media, which runs the NBC and Telemundo networks, international networks such as Sky Sports, and Peacock, brought in $5.4B, 18.3% of revenue; Studios $3.0B, 10.1%; Theme Parks $2.6B, 8.9%. The segment shares add up to more than the whole because the segments sell to each other. Consolidation removed $1.6B, 5.6% of revenue, "the most significant being distribution of television network programming between the Media and Residential Connectivity & Platforms segments." _(from the filing)_
Comcast reports costs by what they are, not by product, so there is no gross margin line. The largest cost is other operating and administrative expense, $10.6B or 36.3% of revenue, which gathers the cost of running the network, serving customers, operating the parks and overhead. Programming and production, the fees for networks and the cost of shows and sports, came to $7.5B, 25.7% of revenue. After $2.4B of depreciation and $1.3B of amortization, operating income was $5.3B, an 18.2% margin. _(from the filing)_
The business turns profit into more cash than profit. Operating cash flow of $7.9B in the quarter was 2.3 times net income attributable to Comcast of $3.45B, because depreciation and amortization reduce profit without using cash. After $3.1B of capital expenditure, 10.4% of revenue, free cash flow was $4.8B, 16.5% of revenue. _(from the filing)_

### What shifted

Revenue fell 6.1% to $29.3B from $31.2B a year earlier, mostly because Comcast is smaller. The filing attributes the fall "primarily" to the Versant Separation, the cable networks spun off at the start of the year, and the sale of the Sky operations in Germany, plus a decrease in Connectivity & Platforms, "partially offset by an increase in the Content & Experiences business." _(from the filing)_
Costs fell faster than revenue, 6.6% to $24.0B, so operating income fell only 3.9%, to $5.3B, and the operating margin rose to 18.2%. Programming and production fell 13.2%, down 2.1 points to 25.7% of revenue. Amortization fell 21.1% to $1.3B, which the filing ties to "lower amortization of customer relationships and other agreements and rights due to the Versant Separation." _(from the filing)_
Below operating income, the gains came from financing and tax. Interest expense fell 14.7%, to $962M from $1,128M, on "a decrease in average debt outstanding." Income tax expense fell 11.0% to $1,084M, "primarily driven by the timing and amount of third-party transferable tax credit purchases." Net income attributable to Comcast rose 3.5% to $3.45B, and diluted earnings per share rose to $0.97 from $0.90 on fewer shares outstanding. _(from the filing)_
The core shows strain. Domestic broadband penetration, the share of homes on the network that buy broadband, fell to 47.5% from 49.3% a year earlier. The filing says broadband revenue fell "due to decreases in average rates and declines in the number of domestic broadband customers." Peacock moved the other way, to 48 million paid subscribers from 41 million. _(from the filing)_

### Risks in the filing

The only new risk factor this quarter is the separation itself. The NBCUniversal Spin-off depends on final board approval, tax opinions, regulatory approvals and financing, and the filing says unmet conditions, or conditions in the equity and debt markets, "could delay completion" or "prevent it from occurring at all." _(from the filing)_
If the split happens, it creates "two companies that are smaller," each carrying costs "that may be shared today" and possibly more exposed to changing market conditions. The company says it cannot predict whether the two stocks together will be worth more or less than one, and if the spin-off were found taxable, Comcast and its shareholders could face substantial taxes. _(from the filing)_
In the operations, the filing names competition and changing viewing habits. Customer relationship net additions "continue to be negatively impacted by an increasingly competitive environment"; video revenue and linear network audiences are expected to keep declining as consumption shifts; and theme park revenue fell on lower admissions, including "the impact of increased promotional activity." _(from the filing)_
Large intangible assets carry their own risk. The filing says changes in market conditions or key assumptions, "including the proposed NBCUniversal Spin-off, could negatively impact the results of future impairment testing" of goodwill and cable franchise rights, although its latest tests found fair values substantially above carrying values. _(from the filing)_
Of these, competition is already in the numbers: broadband penetration and broadband revenue both fell, and the company answered by cutting prices and giving away wireless lines. The spin-off risks are not yet visible beyond transaction costs. They would surface in standalone overhead and in the financing terms each company gets once they stand apart. _(analysis)_

## Founder view: mechanisms

### A fixed network earns on the share of homes it serves

Comcast's network is built ahead of demand: it passes homes whether or not they buy. Most of its cost sits in depreciation, maintenance and support that barely move with the customer count, while revenue moves with penetration, the share of passed homes that pay. A customer added inside the existing footprint carries a high incremental margin; a customer lost takes revenue with little cost relief. That is why the filing tracks penetration closely, and why the company will give away a wireless line to keep a broadband customer. _(analysis)_

### A second product given away to protect the first

Comcast now offers broadband customers a wireless line free for a period, accepting lower broadband revenue per customer in return for retention. A household with phone and internet on one bill has more to undo before it leaves. The wireless service runs partly on networks Comcast does not own, so it adds direct costs; the payoff has to come from broadband customers who stay and from free lines that later convert to paid. _(analysis)_

### Content and distribution under one roof sell to each other

Comcast's segments trade with each other as if they were separate companies: the residential business pays Media to carry its networks, and Studios licenses shows to Media for Peacock. The group keeps both sides of each sale; the internal price decides which segment shows the profit, and consolidation removes the double count. The planned NBCUniversal spin-off would turn many of these internal sales back into contracts between two companies that negotiate. _(analysis)_

### Building the replacement while the old product declines

Comcast's linear networks lose subscribers but still raise contract rates, while Peacock adds paid subscribers and advertising. Both draw on the same content: sports rights and shows bought once and shown on both. The declining product funds the new one while it scales, and the shared content keeps the new product's added cost lower than a standalone rival would face. The filing expects Peacock's content and marketing costs to stay significant. _(analysis)_

## Member research

Signed-in members read, on the page: what Comcast's numbers depend on from here, and the playbook behind each mechanism (what needs scale, what transfers, how to test it, the metric that would show it).

## Sources

- Comcast 10-Q for the period to 2026-09-30: https://www.sec.gov/Archives/edgar/data/1166691/000162828026066863/ (2026-10-22)

Methodology business-lens-1.0 · schema 1.2.0 · run business-lens-2026-11-02 · as of 2026-11-02