Comcast Corp - Class A (CMCSA) — Q2 2021 Earnings Call Transcript

Thank you, operator, and welcome, everyone. Joining me on this morning’s call are Brian Roberts, Mike Cavanagh, Dave Watson, Jeff Shell, and Dana Strong. Brian and Mike will make formal remarks, while Dave, Jeff, and Dana will also be available for Q&A. Let me now refer you to Slide 2, which contains our Safe Harbor disclaimer and remind you that this conference call may include forward-looking statements, subject to certain risks and uncertainties. In addition, during this call, we will refer to certain non-GAAP financial measures. Please see our 8-K and trending schedules for the reconciliations of these non-GAAP financial measures to GAAP. With that, let me turn the call over to Brian Roberts for his comments. Brian?

Thanks, Marci, and good morning, everyone. I’m really excited to report the strong second-quarter results, which were highlighted by exceptional performance at cable, delivering 11% revenue growth and a nearly 15% increase in adjusted EBITDA. This was fueled by our fantastic success in broadband. We added 354,000 broadband customers, an increase compared to both the same period last year and to 2019. And that drove 294,000 total customer relationship additions. These were the best broadband and customer relationship results we’ve had for any second quarter on record. Our broadband connect activity is healthy, and churn improved for the 14th quarter in a row. In fact, we hit the lowest second-quarter churn rate in our company’s history. Based on our first-half results, combined with the strength we’re seeing in current trends, we now expect total broadband net additions for 2021 to increase mid-teens relative to 2019. We also added 280,000 wireless subscriber lines, the highest of any quarter since launch. And Xfinity Mobile is now a standalone profitable business. We got here on time, if not a bit earlier than expected, and we are experiencing the fastest sales momentum we’ve ever had, a testament to the changes we implemented in the back half of last year when we reprioritized wireless across our sales channels and integrated this business more fully into our core operations. And this past April, we introduced a fabulous unlimited family plan, which we just started offering to our small business customers as well. So I couldn’t be more pleased with Dave Watson and the team he has assembled as they have a relentless focus on connectivity, which has never been more important. They truly put the customer first, offering innovative and differentiated products and services, unique to the market. We now offer 1.2 gigs of downstream to essentially all 60 million homes and businesses in our footprint. The foundation of our success is our network, which we constantly evolve, so that we can easily handle capacity growth, increases in subscribers, and the changing usage patterns of our customers who continue to choose faster speeds. Currently, there are typically 25 connected devices in the home, with eight active at any one time. This increases every year and drives in-home Wi-Fi usage to 15 times that of wireless, delivering a huge amount of data at consistent speeds and reducing latency, which is powering our growth. And we’re doing this in a cost-efficient way. Virtualizing our network, combined with our suite of digital tools, also allows us to continue to improve the customer experience while identifying additional cost savings. The progress we’ve made is evident in our results. During the second quarter, total agent calls decreased by 10%, and total interactions were down by 7%. We also saw a 22% reduction in truck rolls despite an over 5% increase in our customer base. So as I look ahead, I think about our philosophy since the early days of broadband, which has been to bet on a never-ending cycle of new technologies, devices, and applications that come from Silicon Valley and new startups everywhere that need to take advantage of greater speeds and capacity over time. We see this transformation happening every day and continue to believe that this is ongoing for the foreseeable future. So what does that mean for our network? Well, since October of 2020, we’ve been trialing gig and multi-gig symmetrical speeds over our DOCSIS infrastructure to great success. With upstream comprising today less than 10% of total broadband usage, even during a peak, we don’t really have a consumer use case for this technology capability yet, but the strategy for our network is to plan ahead. We’re investing in architecture that lets us 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. Dave can provide more detail about the technological decisions we’re making during the Q&A. With Cable comprising roughly 70% of our consolidated EBITDA, broadband is a top strategic priority. I could not be more pleased with the strength of this quarter and the first half of 2021. Looking at other parts of our business, for the first time since the pandemic, our Theme Parks returned nicely to profitability. This was led by Orlando, where we’ve seen strong domestic demand in both per capita spending and in attendance, which returned to 2019 levels somewhat faster than I thought might happen, despite virtually no international visitation. In Hollywood, since restrictions have been lifted, attendance is growing week after week. We continue to see firsthand pent-up demand for high-quality entertainment and family fun outside of the home. And we remain incredibly bullish on our Theme Parks. Our Studios business is also coming back. We’ve returned to pre-pandemic television production levels, and we’re really optimistic about our upcoming films, especially after the success of Fast 9, which debuted at number one in all territories at launch and with $600 million of worldwide box office to date remains the biggest U.S. film launch since the pandemic began. Following Fast, we successfully released Boss Baby 2 and the latest installment of Purge. And over the July 4th weekend, we had the top three films at the domestic box office, the first time that’s happened for any studio since 1995. We have a great slate ahead with Dear Evan Hansen in September, followed by a new Halloween in October; and we end the year with Sing 2. Next, let’s talk about our media and production strategy, which across the entire company, is aligned around one purpose: to create premium programming, which we can then scale and monetize for the very best global distribution outlets. Peacock adds to what we already offer. It’s a great complement to our linear brands, which are successful in their own right. And together, these platforms provide a continuous loop of content and promotion that seamlessly drives viewership across our ecosystem, offering a different access point to attract new audiences while giving existing viewers more of what they love. We are clearly capitalizing on the strength of our media brands, having just completed the strongest advertising upfront in our history, securing double-digit increases in both volume and price across our entire portfolio. And I’m pleased to report that as of this week, Peacock has 54 million signups and over 20 million monthly active accounts. This is 50% higher than our last report, driven by a number of factors: the day-and-date release of Boss Baby 2; the debut of Dr. Death, our most successful original to date; and the airing of the 2020 Tokyo Olympics. The third quarter thus far has been a particularly strong period. And we will work hard to manage retention and grow from here, recognizing we are unlikely to replicate such tremendous performance. But we remain optimistic with a lot of programming strength ahead of us, such as more premium originals, Sunday Night Football, the Beijing Olympics, and our reimagined dynamic pay-one window, which starting in 2022 shifts our film titles to Peacock exclusively for the first and last four months segments in the pay window with Amazon Prime and Netflix sharing rights for the 10 months in between. By showcasing content across multiple platforms, Universal films will constantly refresh across the streaming ecosystem, allowing audiences multiple access points with which to consume our content. This will generate more third-party revenue while retaining the most valuable window for Peacock. So, as you can see, we’ve successfully been able to pivot, coming up with creative ways to keep up with consumer demand, and in many cases, making even more money than we did before. At Sky, we are pleased revenue is back to pre-COVID levels despite the lingering impact that COVID continues to have on our pubs and clubs segment. Sky’s results were led by the UK, with revenue and EBITDA ahead of 2019. And we’re seeing momentum across a number of areas. Premium TV churn is at record low levels. And in streaming, we posted ARPU growth of over 20% for the fourth consecutive quarter. In broadband, where we just introduced our 500 Mbps offering, we experienced improved churn relative to both 2020 and 2019 despite a 6% price increase in the quarter. In addition, Sky mobile had the strongest second quarter activations on record, with churn averaging 40% better than the industry average. And today we’re announcing the debut of our international streaming strategy for Peacock. Later this year, we will leverage Sky’s significant scale and powerful brand to include Peacock at no additional cost for its 20 million customers across Europe. The benefits of this launch are tremendous. We will unlock incremental advertising revenue, introduce the Peacock brand and content catalog via Sky to established platforms in key European markets and directly monetize our programming investments. A decision to make Peacock the anchor tenant on Xfinity X1 and Flex platforms for its domestic launch has been a key driver of brand awareness, scale, consumption, and promotion. And we see a similar opportunity with Sky. We’re utilizing all the wonderful assets of our company to create value for audiences everywhere. And we look forward to finalizing agreements with other programming and distribution partners outside of our Sky markets. So summing up, this was a fabulous quarter and a great first half of the year. I’m so pleased we are now in a position to buy back stock, which we will report on in Mike’s section. This is a truly very special company. And I’m excited for the road ahead. Mike, over to you.

Thanks, Brian, and good morning, everyone. I’ll begin on slide 4 with our second quarter consolidated 2021 results: revenue increased to 20% to $28.5 billion. Adjusted EBITDA increased 13% to $8.9 billion. Adjusted EPS increased 22% to $0.84 per share. And finally, we generated $4.8 billion of free cash flow. Now let’s turn to our business segment results, starting with Cable Communications on slide 5. Cable revenue increased 11% to $16 billion; EBITDA increased nearly 15% to $7.1 billion; and net cash flow grew close to 15% to $5 billion. As a reminder, last year’s second quarter was significantly impacted by COVID-19, including adjustments accrued for customer RSN fees. Excluding the impact of these RSN adjustments, Cable Communications’ revenue increased 9.3% with no corresponding impact to EBITDA. We added 294,000 net new customer relationships, up 35% over last year’s second quarter and up 93% over the second quarter of 2019. This was the best second quarter on record and was driven by broadband, where we added 354,000 net new residential and business customers, up 10% over last year’s second quarter, and 69% above the second quarter of 2019. These strong results were driven by improved churn and healthy connects relative to both 2020 and 2019. And this was the lowest second quarter broadband churn on record. Looking ahead, as Brian mentioned earlier, based on our strong results through the first half of the year, as well as current trends, we now expect total broadband net additions for 2021 to be up mid-teens from the 1.4 million net additions in 2019. Broadband revenue increased 14% and grew 13% excluding the RSN fee adjustments in last year’s second quarter. These results were driven by strong growth in volume and rate. Wireless revenue grew 70% due to an increase in both customer lines and higher device sales. We added 280,000 net new lines in the quarter, the best result since launching this business in 2017, bringing us to 3.4 million total lines as of quarter end. We are encouraged by the initial results of our new unlimited plan, which is driving a notable increase in unlimited connects as well as a lift in overall volume. Turning to Video, revenue increased 2.6%, or 0.5% excluding RSN fee adjustments in last year’s second quarter, reflecting healthy growth in rates mostly offset by net video subscriber losses totaling 399,000. While our residential rate adjustment at the beginning of the year was the primary driver of the increase in rates, we believe it was also a contributor to the video subscriber loss in the quarter. Business Services revenue increased 10%, primarily driven by higher rates due to comparison to last year when Business Services were significantly impacted by COVID-19. Over the past year, we have bounced back; rates have recovered and customer growth is strong, as we added 17,000 net new customers in the quarter and 70,000 over the past year, primarily driven by continued improvement in small business. Last, advertising revenue increased 59%, reflecting an overall market recovery compared to last year, when we experienced reduced spending from advertisers due to COVID-19. As we move to the second half of the year, we will have difficult comparisons to last year when we benefited from strong political advertising. Turning to expenses, Cable Communications second quarter expenses increased 8.2%; programming expenses increased 12% and were up 5%, excluding the impact of RSN adjustments last year, primarily due to the number of contract renewals that started to cycle through in 2020 combined with annual escalators in existing agreements. Looking to the third quarter, we expect programming expense growth to increase to high single-digit levels due to the continued impact of contract renewals, as well as the comparison to last year’s third quarter, which was also favorably impacted by RSN fee adjustments. For the full year, we continue to expect programming expenses to increase at high single-digit levels. Non-programming expenses increased 5.7%, or 0.5% on a per relationship basis due to higher technical and product support, and advertising, marketing, and promotion spend to drive growth in our core broadband and wireless businesses. These higher expenses were partially offset by lower bad debt expense. These trends should continue in the third quarter. Cable Communications’ EBITDA grew nearly 15% to $7.1 billion, including a contribution of $68 million from our wireless business, the best results since launch. Cable EBITDA margins reached 44.2%, reflecting 140 basis points of year-over-year improvement. While the RSN fee adjustments had no impact on EBITDA, they did impact margins last year. Moving the RSN adjustment impact margins expanded 200 basis points year-over-year. Cable capital expenditures increased 17%, resulting in CapEx intensity of 10.6%, up 50 basis points compared to last year. These results were driven by an increase in scalable infrastructure as we continue to enhance the capacity of our network, as well as increases in broadband related CPE and line extensions. As Brian mentioned, we have decided to move a bit faster to the next phase of DOCSIS using very cost-effective technology, allowing us to maintain the CapEx intensity level we achieved in 2020, which was the lowest in our history, and we expect to be at this level for the next few years. Now let’s turn to slide 6 for NBCUniversal. Let’s start with total NBCUniversal results: revenue increased 39% to $8 billion, and EBITDA increased 13%, to $1.6 billion. Media revenue increased 26% driven by higher advertising, distribution, and other revenue. Advertising revenue increased 33% reflecting the timing of sports and overall market recovery compared to last year and the launch of Peacock. We had significantly more sporting events compared to last year when sports were paused, which benefited our advertising revenue. Excluding this benefit, advertising grew at mid-teens levels. Distribution revenue increased 19% or high single digits excluding the RSN fee adjustments that impacted last year’s results. This growth reflects higher rates post the successful completion of several carriage renewals at the end of 2020, partially offset by subscriber declines, which were sequentially flat. Media EBITDA declined 16%, to $1.4 billion, including Peacock, which generates revenue of $122 million and an EBITDA loss of $363 million. Excluding Peacock, Media EBITDA was essentially flat, driven by higher sports costs associated with the increase in sporting events this quarter compared to both last year and 2019. As a reminder, our third-quarter Media results will be impacted by our broadcast of the Summer Olympics. Studios revenue increased 8.4% driven by higher theatrical revenue, reflecting the success of Fast 9 in theaters. And compared to last year when theaters were mainly closed due to COVID-19, Studios EBITDA decreased 52% to $156 million as a result of higher expenses associated with our theatrical release compared to last year when releases were paused, the timing of content licensing sales, and the comparison to last year, which included transactions with Peacock related to the initial launch of the service. In the second half, EBITDA comparisons to last year will remain challenging as we continue to launch new theatrical releases and ramp our TV production. Theme Parks revenue increased by $958 million, generating $1.1 billion and EBITDA of $221 million, which included about $150 million of Universal Beijing preopening costs. This is the first profitable quarter we’ve had since the pandemic began in the first quarter of 2020 and was driven by strong results at our Universal Orlando Resort. Orlando has had exceptionally strong demand, with June attendance exceeding 2019 levels, as well as strong per capita growth. Despite virtually no international guests during the quarter due to COVID-related travel constraints, we opened our Jurassic World themed roller coaster, VelociCoaster, on June 10, to some of the highest guest satisfaction scores we’ve had. Hollywood has been operating without capacity restrictions since mid-June and has experienced strong demand, aided by the opening of our Secret Life of Pets attraction in April. We’re optimistic that our domestic parks are on a path to return to historic levels of profitability. But we need international visitation to resume, which remains dependent on COVID-related travel restrictions being lifted. At our Japan Park, results continue to be challenging after closing in late April; we reopened on June 1 with capacity restrictions that are likely to remain in place through the summer. Last, as we prepare to open our newest park, Universal Beijing, we expect overall results will be negatively impacted by up to $250 million in the third quarter.

Now let’s turn to slide 7 for Sky, which I’ll speak to on a constant currency basis. For the second quarter, Sky revenue increased 15% to $5.2 billion, largely reflecting strong growth in our UK business. Direct-to-consumer revenue increased 7.7%, primarily reflecting higher average revenue per customer relationship. Results in the UK drove the bulk of the growth and benefited from the comparison to last year when sports subscriptions were paused, as well as a rate increase, and higher mobile device sales, improving hospitality revenue as pubs and clubs reopen. While customer relationships grew in the UK, overall customer relationships declined by 248,000, primarily driven by customer losses in Italy and Germany to the end of the football season. As we have previously said, we’ve reset our football rights in Germany and Italy. As a result, we anticipate lower programming and production expense, along with continued customer losses in the third and fourth quarters. We believe this disciplined approach to sports-related costs is the right long-term financial decision for the business. Advertising revenue increased 79%, with results in the UK driving the growth and reflecting the overall market recovery from COVID-19, as well as an increase in a number of sporting events compared to last year when sports were paused. Sky generated $560 million in EBITDA, a 32% decline compared to last year’s second quarter, primarily reflecting higher sports rights amortization related to more events in the current quarter. These higher expenses were partially offset by lower entertainment costs due to production delays. I’ll wrap up with free cash flow and capital allocation on slide 9. Free cash flow was $4.8 billion in the quarter, a decrease of 20% year-over-year, largely due to the timing of last year’s federal tax payments, which were deferred to the third quarter. While networking capital was a positive contribution to free cash flow in the quarter, we continue to expect it will be a negative drag on our full-year results and higher compared to 2019 levels due to an increase in content investments and our broadcast of the Olympics. Consolidated total capital, which includes capital expenditures, as well as software and intangibles, increased 5.2% in the second quarter to $2.8 billion, reflecting an increase in cable, which was partially offset by the decline at NBCU. For the full year, we now expect capital to be slightly above 2020 levels, reflecting our plan, as I previously mentioned, to accelerate enhancements to our network. In the second quarter, a return of capital to shareholders included dividend payments totaling $1.2 billion, up 9.5% year-over-year. We also resumed our share repurchase activity late in the second quarter, totaling $500 million as of June 30. As previously communicated, we intend to stay at historical buyback levels until we reach our intended target leverage levels, which we currently expect to reach sometime in 2022. With our return to share repurchase in the quarter, we’re happy to get back to our long-standing balanced approach to capital allocation, which consists of maintaining a strong balance sheet, investing organically for profitable growth, and returning capital to shareholders.

Thanks, Mike. Operator, let’s open the call for questions.

Oh, thanks so much. A couple of operating questions for me this quarter. Jeff, any discussion of the shape of parks profitability going forward? You’ve got Beijing shifting from pre-operating losses to opening, the U.S. is more fully opening, Japan at some point will more fully open. How do we think? I know you gave the 3Q sort of one-time item for Beijing. As we get to 4Q, are the Beijing losses done? Is it an easy comp next year? How should we think about profitability overall? Dave, can you unpack the margin expansion for us? In the quarter, it looks like advertising and wireless probably drove all the margin expansion. I think about the last few years, you’ve got a lot of margin expansion from leveraging non-programming costs. Was there just unusual year-over-year comps within the Cable business relative to 2Q of last year that expires over the next couple of quarters, and you get back to sort of normal margin expansion on a non-programming line? Or are there other investments you’re making that we should consider? Thanks so much.

So I take the first one. Yes. So hey, Doug, how are you? So on the parks, we are very pleased with not just the quarter, but the trajectory of our opening. As Mike went through, Orlando is on an attendance standpoint, pretty close to back where we were in 2019, even though we don’t have any international visitors, and you would expect those international visitors to pick up over time in Hollywood. We’ve only been open a couple of months and we’re already approaching our capacity, and we’re excited about the next couple of months and Halloween Horror Nights. So the domestic parks, obviously, with COVID, you just don’t know. It’s – things could be lumpy, things could be non-linear. But so far, the trajectory is really good, and we expect that to continue. And I would say the thing we’re most pleased with is the protocols of work. And we’ve been able to keep people safe and keep our workers safe and keep our guests safe. And that I think is driving the confidence in coming to our parks. Internationally, Brian actually – and I actually were in Japan. And even though that country is a little bit behind as far as COVID, we’ve been able to get our park back open; we’re open again, with some capacity constraints. We have a great attraction there that we were able to see Nintendo, which is one of our best attractions that we’ve ever built anywhere in the world to rival Harry Potter. I’m very excited for that not only in Japan, but for Epic Universe down the road and our other parks eventually. So Japan is behind, but feels like it’s heading in the right direction. And so that’s going to be great. And then lastly, with Beijing, we’re ready to go in Beijing. The park is ready. It’s awesome. It’s our most technologically advanced park. And we expect – right now, what we’re doing is going through the final approvals of rides and the process you have to go through, and that is somewhat indeterminate. But we expect that park to open in the next couple of months. And when it does open, as you mentioned, those pre-operating costs go away and we start getting attendance. And so Beijing should be a good contributor to us for the remainder of the year when it opens and then on to next year. So overall, our parks are on a good trajectory, and it’s hard to see what happens with COVID, but we’re pretty pleased. Dave?

Yes. Hi Doug. Let me briefly discuss margin performance for the quarter and our outlook. We are optimistic about our ongoing progress in margin improvement, focusing on the fundamentals. While some factors may fluctuate within a quarter, our emphasis remains on the core elements. This includes broadband, both residential and commercial, which are driving increased revenue, enhancing margins, and enabling us to accelerate digital solutions, particularly in residential. These fundamentals are key to our current position. As we expand our mobile services, we've seen improvements there as well, and advanced advertising is providing support. Our main focus is on connectivity and strengthening customer relationships in that area, alongside enhancements in the digital customer experience, benefiting both customers and us. To illustrate, in the quarter, our total agent calls declined by 10%, total interactions decreased by 7%, and we achieved a 22% drop in truck rolls, even with a 5% rise in customer base. Looking back, this reflects a consistent trend; over the past five years, we’ve significantly reduced call volumes and truck rolls. So, Doug, this remains a priority for us. While margins in the second half of the year may not grow as rapidly as in the first half, we are in a strong position, doing so in a healthy and sustainable manner. I am confident in our roadmap for digital tools and the connectivity run rate. Although we will invest in areas like business services, mobile, sales, and marketing to drive growth, we will maintain a sharp focus on margin.

Thanks.

This is Mike, and I’d just echo that point that in this great first half margin expansion, which, as Dave said, will ease a little bit in the second half of the year. There’s tremendous investment behind wireless, behind advancing growth in broadband and business services. So it’s really healthy margin expansion because we’re putting the money back into driving future growth.

Thanks, Doug. Operator, next question, please.

Thanks. Good morning. I wanted to ask, actually, also about cable. And then I have a question for Brian sort of on M&A and strategic stuff. Mike and Dave, we’re all trying to figure out what normal looks like as we hopefully emerge from the pandemic. And, Mike, you’ve talked about bad debt being down, and I think like it continues to be a tailwind year-on-year. Do you have a sense of what sort of normal looks like as you think about OpEx? I mean, you guys just sounded quite bullish on margins going forward. But there is some concern that as activity normalizes, some costs come back in the business, and I wonder if you could just tackle that. And the same thing for you, Dave. I mean, churn, it sounds like it keeps coming down. Do we go back to normal churn from pre-COVID or not? I don’t know if you have any sense of that when you look at different geographies and your footprint, if you can glean anything there? And then, Brian, I’m sure you know there has been lots of press articles on Comcast buying lots of different businesses. And I’m wondering, now that you’ve laid out at least some of your Peacock international strategy, all these articles seem to assume that you don’t have enough scale in NBC to achieve your strategic goals around streaming. And I know you can’t talk about M&A. But I wonder if you could just talk about whether you believe NBC has what it needs to do what the company wants to do on the streaming front, globally. Thanks, everybody.

I’ll start by addressing the question. We still anticipate low single-digit increases in non-program operating expenses compared to 2019 for the full year of 2021. This reflects all the factors Dave mentioned. It's true that bad debt remains low. In terms of what the second half of the year looks like, we're focused on moving our business towards more digital operations and higher-margin products in broadband and Business Services, which will continue to provide benefits regardless of the operating environment. That's my best assessment for the second half of the year. I'll let David discuss churn, but we expect a similar trend. We’re investing in products and network enhancements, including Flex and wireless, which should lead to sustained benefits in churn compared to historical levels, at least in my view. But we'll see how it plays out. Dave, over to you.

Thanks, Mike. Hello, Ben. Yes, we anticipate that over time there will be a bit more normalization as we enter quarters like Q2 and Q3, with factors like student activity, moving trends, and seasonality potentially influencing churn. However, we are achieving the levels we expected regarding overall broadband churn performance. The redefinition of great broadband, I believe, is contributing to this improvement. We have an excellent network, which we've discussed, and Brian may touch on it too, as we continue to invest in it. We aim to stay ahead of the curve concerning capacity and usage, with significant focus on the network. Additionally, it's not just about speed; our devices, like the pods, and ensuring substantial Wi-Fi coverage in homes are critical. Staying ahead in this area and introducing value-added services to broadband, such as mobile and Flex, also affects churn. These categories are still in their early stages for us, but they excite us and are positively influencing broadband. While I can't provide specific guidance on future churn, our commitment to attracting and maintaining healthy customer relationships is essential. We are very enthusiastic about the potential impact of mobile and Flex over time.

And Ben, this is Brian. Let me start by saying I really love the company we’ve got; I can’t imagine really a better quarter; it’s an exceptional quarter. And I believe we have lots of more organic growth ahead. We have a very special unique company across distribution and content working so well together. You start with Peacock and Sky, and Peacock, and Xfinity, and even in our Olympics advertising. We’d like and we are investing behind these businesses. So I don’t think, and I think Mike Cavanagh has been very blunt that we don’t need M&A. We have a majority broadband-centric company, and we like the mix. So what might that drive us to consider, at least any kind of partnership, is where we have unique special capabilities that could lead in globally or internationally to enhancing our streaming position. That’s something you might talk to others and consider; but as to your scale question. I really think we have all the parts. And Jeff, why don’t you comment on that in just a second, and maybe with some more specifics. But if you look at the results of Peacock this quarter, again, we probably were the fastest growing streaming service – 50% in 90 days. We have a brand that’s only a year old, and it’s either number one or number two new brands in America. It’s been created. So I really think our corporate focus is, as we’ve said many times, to get back in balance on capital returns. Probably most pleased this quarter that we were able to get to that place to buy back stock, as Mike just talked about. So I do think we have the scale. I think we have an amazing company. And I feel fortunate with our position. Jeff, why don’t you talk a little more about the scale?

Yes. Thanks, Brian. Hi, Ben, when you talk about scale with respect to streaming and Peacock, just to get more granular for a second, there really are three elements of the scale. One is the scale of the platform technologically. And as Brian just mentioned, we launched on the back of the Sky platform, and we’ve leveraged our Xfinity and Dave’s team significantly. So I think we have proved that we would have never launched the success technologically with a platform that looks great and works without the scale that we have already at the company. There’s scale concerning the brand. And that’s why I’m thrilled with today’s announcement that Peacock is going to be in 20 million Sky homes and eventually we’ll roll it out across the globe. And the most important, by far, element of scale for streaming is content. And we are really at the beginning of our content rollout on Peacock, that’s why this quarter’s growth is really extraordinary. Because this quarter, as Brian went through, we had a pretty good movie with Boss Baby 2; we had our first real good drama with Doctor Death; and we had, obviously, the airing of the Olympics here. Looking forward, we, as part of our plan, we have another Olympics; we have lots of original programming, which Mike mentioned, we’re ramping up production right now on and we’ll be rolling out over the next year. Brian mentioned our movies; we have what I think is one of the top studios in Hollywood, and we have lots of movies coming directly to Peacock, and eventually we’re going to have the Hulu content coming back. So we have plenty of content coming, and this quarter showed that when you put that content on a service that’s good, you can actually get pretty good growth in the streaming world. And so personally, I don’t think we’ve ever lacked for the capital to do what we need to do to grow our business. And what I’ll end with is the perfect example that happened last week was we at Universal acquired the rights to the next three Exorcist movies in a pretty unique deal that was done in tandem with Peacock. We wouldn’t have been able to do it if we didn’t have a streaming service; that’s where we basically got the rights on the backs of the strength of our studio, where we have Jason Blum and pedigree that’s unmatched and Donna Langley and her team’s ability to market movies. But because we did it with Peacock, we have full optionality going forward; we can put the second and third movies directly on Peacock, do we do something hybrid, we can adapt and be flexible based on how the market works. So we have this scale across our company to do things like that, and I don’t think we’re lacking for scale. Personally, I think we can achieve our success in Peacock without anything additional, and I think this quarter proved it.

Thanks, Brian. And thank you all for joining us this morning. We hope you have a great rest of the summer and stay safe.