Benjamin Swinburne

Benjamin Swinburne sought clarification on Ari Emanuel's statement that 2026 would be a 'year of execution,' interpreting it as a signal regarding TKO's focus on inorganic versus organic growth and M&A intentions. He also asked for confirmation on whether the provided financial incentive package (FIP) numbers represent revenues for forecasting or if there are specific accounting considerations.

Answer

Mark Shapiro (President and COO, TKO Group Holdings, Inc.) confirmed the 'year of execution' comment was purposeful, signaling that TKO is not actively pursuing M&A, but will remain opportunistic and prudent, focusing on operational execution to achieve near 40% Adjusted EBITDA margins. Andrew Schleimer (CFO, TKO Group Holdings, Inc.) clarified that the 'lion's share' of FIP growth is recognized as revenue, with almost entire flow-through to EBITDA, although some packages may include cost savings or tax incentives.

Benjamin Swinburne questioned the strategic message behind Ari Emanuel's emphasis on 2026 as a 'year of execution' regarding M&A, and sought clarification on the revenue recognition and accounting treatment of financial incentive packages (FIPs) in TKO's forecasts.

Answer

Mark Shapiro, President and COO, confirmed the 'year of execution' message was purposeful, signaling to investors that TKO is not actively 'hunting' for M&A, but rather focusing on operational performance to achieve near 40% Adjusted EBITDA margins. Andrew Schleimer, CFO, clarified that the 'lion's share' of FIPs growth is recognized as revenue, with some packages including cost savings or tax incentives, and that the revenue impact almost entirely flows through to EBITDA.

Ben Swinburne inquired about TKO's boxing strategy following the success of the Canelo vs. Crawford fight, asking if there are opportunities to expand into more wholly-owned boxing promotion beyond the Zuffa Boxing joint venture. He also questioned TKO's broader M&A strategy, asking why the company isn't pursuing more 'elephant hunting' for new assets given the strong performance of UFC and WWE and TKO's financial muscle.

Answer

CFO Andrew Schleimer highlighted super fights as a huge catalyst, expecting two to four per year, generating services fees and providing marketing for Zuffa Boxing. President and COO Mark Shapiro emphasized that TKO is focused on execution but is actively 'on the hunt' for scalable assets. In the absence of such opportunities, TKO will go 'full on' with boxing, including Zuffa Boxing events, super fights, and leveraging commissions from media and partnership deals, while acknowledging the team is 'stretched' but ready to capitalize on opportunities.

Ben Swinburne inquired about TKO's boxing strategy, specifically if there are opportunities to expand beyond the Zuffa Boxing joint venture into wholly-owned promotion, given the success of the Canelo vs. Crawford fight. He also asked if TKO is considering further large-scale acquisitions ('elephant hunting') given the strong performance of UFC and WWE and TKO's financial strength.

Answer

Mark Shapiro, President and COO of TKO Group Holdings Inc, stated that super fights are a significant catalyst, with TKO expecting a $10 million service fee for each of the anticipated two to four fights per year. These events allow for populating undercards with Zuffa fighters and generate incremental high-margin revenue from media deals, partnership deals, ticket sales, and marketing services. He emphasized that while Dana White can do a few super fights annually, the focus remains on WWE and UFC. Regarding acquisitions, Mr. Shapiro confirmed TKO is 'on the hunt' but prioritizes execution and avoids distractions, noting the scarcity of assets that meet their criteria. In the absence of such opportunities, TKO will go 'full on with boxing,' including 12-16 Zuffa fights, 2-4 super fights, and leveraging global partnerships, consumer licensing, ticket sales, and site fees for the Zuffa Boxing League.

Benjamin Swinburne asked about the new WWE Premium Live Events (PLE) deal with ESPN, the potential 'halo effect,' the rationale for choosing ESPN over a single partner like Netflix, and the strategy of having multiple media partners.

Answer

Mark Shapiro, COO, President & Director, explained the decision balanced monetization with the reach and platform strength of ESPN, including its linear capabilities. Andrew Schleimer, CFO, clarified the new deal's AAV is a significant step-up from the previous Peacock agreement and detailed the valuable content rights TKO retained for future monetization. Nick Khan, President of WWE, affirmed his confidence in the WWE audience's proven history of following content across different platforms.

Benjamin Swinburne asked for an update on the UFC media rights renewal process, including the pros and cons of splitting rights, and sought more clarity on the 2025 free cash flow outlook now that the Endeavor acquisitions are closed.

Answer

Mark Shapiro, President and COO, described the UFC rights discussions as "thoughtful and strategic" with multiple parties, noting that partner ESPN is "heavily included in the mix." CFO Andrew Schleimer confirmed that the free cash flow conversion target of over 60%, excluding non-recurring items, remains unchanged even with the inclusion of the acquired businesses, though this excludes the benefit of restricted cash from FIFA presales.

Benjamin Swinburne of Morgan Stanley inquired about the outlook for TKO's live event revenue in 2025 following strong growth in 2024. He also asked if the new international distribution of WWE content on Netflix has produced a noticeable benefit to engagement and ancillary monetization yet.

Answer

CFO Andrew Schleimer stated that excluding the timing shift of a Saudi PLE, TKO expects meaningful year-over-year growth in live event revenue for 2025, driven by both ticket sales and site fees. President and COO Mark Shapiro added that demand remains strong with no signs of a slowdown, citing strong ticket yields and viewership for WWE Raw on Netflix. Regarding the international Netflix impact, Shapiro noted it was too early for definitive data but emphasized the strategic focus on growing the international fan base.

Benjamin Swinburne asked about the upcoming UFC domestic rights renewal, questioning the strategy of licensing pay-per-views versus self-distribution, and inquired about the drivers behind WWE's impressive Q3 margin performance.

Answer

Chief Financial Officer Andrew Schleimer attributed WWE's strong margins to cost-saving initiatives, an additional 'Raw' episode, and high-margin sponsorship growth. President and COO Mark Shapiro added that the primary goal for the UFC rights renewal is to 'maximize value' and that TKO is signaling flexibility on distribution models to attract the highest bidder.

Benjamin Swinburne asked about T-Mobile's T-Life digitization strategy, specifically how the company ensures this migration is customer-led, given the significant projected savings of $2.7 billion by 2027 and the importance of retail distribution and frontline staff to NPS.

Answer

CEO Michael Sievert stated the strategy is not cost-cutting driven but a three-year journey focused on building capabilities, customer adoption, and scaling. Jon Freier, President of Consumer Group, explained that T-Mobile aims to meet customers where they are, offering digital self-service while enhancing in-store experience centers and insourcing more selling and service. He emphasized empowering frontline staff with technology and maintaining a high NPS by providing consistent, expert help across all channels.

Benjamin Swinburne from Morgan Stanley asked about T-Mobile's T-Life digitization strategy, specifically how the company ensures this migration is customer-led, given the significant projected savings of $2.7 billion by 2027. He raised concerns about potential impacts on NPS and the role of retail distribution and frontline staff.

Answer

Michael Sievert, CEO, explained that the digitization is a three-year journey focused on building capabilities, customer adoption through assisted digital, and then scaling, not primarily cost-cutting. John Freier, President of Consumer Group, emphasized meeting customers where they are, empowering them with self-service options via T-Life, and enhancing experience stores while insourcing more selling and service. He highlighted ambitions to push NPS beyond 50 by integrating digital experiences with empowered staff.

Benjamin Swinburne from Morgan Stanley asked for an analysis of the strong ARPA growth, which is tracking well ahead of guidance, and the strategic rationale behind the new MVNO deal with cable operators for the SMB market.

Answer

CFO Peter Osvaldik attributed the robust ARPA growth to successful rate plan optimizations and customers choosing higher-tier plans, though he was not ready to update long-term guidance. CEO Mike Sievert added that the popularity of the highest-end plans was a positive surprise. Regarding the cable deal, Sievert framed it as a highly incremental, win-win partnership focused on the SMB segment where T-Mobile has low exposure, clarifying it is not a precursor to a broader consumer MVNO strategy.

Benjamin Swinburne from Morgan Stanley asked for an analysis of the strong ARPA growth, which is tracking well ahead of long-term guidance, and questioned the strategy behind the new MVNO partnership with cable operators for the SMB segment.

Answer

EVP & CFO Peter Osvaldik attributed the robust ARPA growth to successful rate plan optimizations and customers choosing premium tiers, while noting the second half will show more organic growth as they lap prior year changes. President & CEO Mike Sievert added that the uptake of the highest-tier plan was a positive surprise. Regarding the cable deal, Sievert explained it is a highly incremental, win-win partnership focused specifically on the SMB market where T-Mobile has low exposure, and it is not a precursor to a broader consumer MVNO agreement.

Benjamin Swinburne asked about the biggest opportunities ahead for T-Mobile from the perspective of its new leadership and sought more details on the go-to-market strategy for T-Fiber following the Lumos acquisition.

Answer

President and COO Srini Gopalan identified the key opportunity as combining T-Mobile's customer-focused culture with its leading network and digital capabilities. Michael Katz, President of Marketing, Strategy and Products, detailed the T-Fiber strategy, which will leverage the T-Mobile brand, its national retail distribution, and its existing waitlist of over one million fixed wireless internet prospects.

Benjamin Swinburne asked about the mix between ARPU and account growth, particularly how the increase in bundled fixed wireless customers is impacting ARPU. He also sought details on the Vistar acquisition, questioning its strategic rationale and what it signals about T-Mobile's ambitions in digital out-of-home advertising.

Answer

CFO Peter Osvaldik explained that while Q4 saw strong fixed wireless demand from existing customers, the mix varies quarterly, and the company achieved its highest-ever fixed wireless ARPU growth. President of Marketing, Innovation & Experience Michael Katz and CEO G. Sievert detailed the Vistar strategy, stating the goal is to transform the out-of-home ad industry by combining Vistar's platform with T-Mobile's customer intelligence to make place-based media addressable and measurable for the first time.

Ben Swinburne (Morgan Stanley) asked for an assessment of Spectrum Mobile's market position with consumers, inquiring about brand awareness, reputation, and the effectiveness of the sales force in executing the converged strategy for both existing and new customers.

Answer

Chris Winfrey, President and CEO of Charter Communications, stated that the converged strategy is working, noting continued mobile growth despite heavy device subsidies from competitors. He acknowledged that Spectrum Mobile is a relatively new brand, with brand awareness and product reputation steadily improving, but highlighted the need for more work to demonstrate the superior speed and savings of their Wi-Fi offload capabilities to customers.

Ben Swinburne inquired about Spectrum Mobile's market position, consumer perception of the brand, and the sales force's execution of the converged strategy.

Answer

President and CEO Chris Winfrey stated that the converged strategy is working, with Spectrum Mobile continuing to grow despite heavy device subsidies from competitors. He acknowledged Spectrum Mobile is a relatively new brand, but brand awareness and reputation are improving. Winfrey highlighted the under-communicated advantage of faster speeds through Wi-Fi offload and expressed confidence in the product's value proposition.

Benjamin Swinburne asked about the effectiveness of Charter's promotional roll-off strategy in the current market and the company's confidence in its 'Life Unlimited' approach. He also requested an update on the full-year operating expense outlook.

Answer

CEO Chris Winfrey explained the strategy's success is based on offering the best product and value, with new bundled packages featuring price locks to ensure competitive retail rates long-term. CFO Jessica Fischer provided an OpEx outlook, expecting low-to-mid single-digit growth for marketing and other expenses, with cost to service customers remaining flat to slightly down for the year.

Benjamin Swinburne asked if Charter expects to improve its broadband results in 2025 versus 2024, given the absence of ACP-related losses and an expanding rural footprint. He also questioned the drivers behind video subscribers outperforming broadband, suggesting a potential strategy of bundling and subsidizing video with internet service.

Answer

President and CEO Chris Winfrey expressed confidence in mid-term internet growth, citing the end of ACP losses, stabilizing competition, and investments in network evolution and convergence. While not giving a short-term outlook, he stated results 'better be better' in 2025. He explained the improved video performance was due to actively rebundling video with connectivity sales, a strategy resumed in late September after gaining flexibility to create more valuable packages, including direct-to-consumer apps.

Benjamin Swinburne inquired about the expansion of the fiber overbuild footprint, how Charter's market share performs in those areas, and the rationale behind the Liberty Broadband opportunity.

Answer

President and CEO Christopher Winfrey declined to comment on the Liberty Broadband matter, citing regulatory restrictions. Regarding fiber competition, he estimated that gig-speed overlap is currently around 55% of the footprint. He argued that wireline overbuilds offer poor financial returns, especially with multiple competitors, and expects some to scale back. Winfrey emphasized Charter's competitive advantages, including its symmetrical multi-gig network, converged offerings, and superior value proposition, stating that markets typically stabilize after an initial 18-24 month period of new competition.

Ben Swinburne from Morgan Stanley asked about Verizon's strategy to maintain or improve customer lifetime values (CLVs) in 2026 and 2027, given concerns about potential declines with a more aggressive market posture. He also questioned CFO Tony Skiadas about the $2 billion CapEx efficiencies, seeking clarification on where these savings were found without negatively impacting business growth.

Answer

CEO Dan Schulman stated that CLVs are expected to rise due to improved business quality, reduced churn (by avoiding 'empty' price increases, enhancing customer experience, and leveraging convergence), and fiscally responsible promotional activity. CFO Tony Skiadas detailed that the $16 billion-$16.5 billion CapEx guidance is sufficient for growth initiatives, with efficiencies found by narrowing focus to mobility and broadband, completing C-band build-out, rationalizing non-core areas (e.g., business wireline, legacy copper), and improving unit cost efficiency in builds.

Ben Swinburne inquired about Verizon's strategy for customer lifetime values (CLVs) moving forward, addressing concerns that CLVs might be lower in 2026 and 2027. He asked what Verizon is doing to attract and retain high-value customers. Additionally, he asked CFO Tony Skiadas about the $2 billion reduction in CapEx from the previous run rate, seeking clarification on where these efficiencies were found without impacting revenue or business growth.

Answer

CEO Dan Schulman stated satisfaction with the quality of Q4 net adds, particularly new-to-Verizon customers who have the highest CLV. He identified churn as a major opportunity, attributing it to price increases without value (which Verizon has stopped), friction in customer processes, and competitive intensity. Schulman emphasized a fiscally responsible approach to promotions and leveraging convergence (broadband and mobility bundles) to improve LTVs through lower churn and higher ARPU. CFO Tony Skiadas affirmed that the $16-16.5 billion CapEx guidance is sufficient for all growth initiatives, including continued investment in the wireless RAN (C-band build 90% complete, substantially done in 2026 with remaining on lower-CapEx small cells) and fiber build (at least 2 million premises passed annually). Skiadas noted that CapEx efficiencies were found by narrowing focus to mobility and broadband, applying rigor to capital deployment, and significantly reducing or eliminating non-core areas like business wireline, legacy copper, and projects with long paybacks. Schulman added that network excellence remains foundational and that the CapEx envelope is comfortable, as many heavy investments are complete, and Verizon will cease investing in loss-making areas.

Ben Swinburne of Morgan Stanley asked about Verizon's strategy for customer lifetime values (CLVs) moving forward, expressing concern that CLVs might be lower in 2026-2027. He sought clarification on how Verizon plans to attract high-value customers with its more aggressive posture. He also questioned CFO Tony Skiadas about the $2 billion CapEx efficiencies, asking where these savings were found without negatively impacting the business or growth.

Answer

CEO Dan Schulman stated satisfaction with Q4's high-LTV new-to-Verizon adds and identified churn reduction as a major opportunity to increase LTVs. He outlined plans to avoid price increases without value, reduce customer friction, maintain rational promotional activity, and leverage convergence for higher LTVs. CFO Tony Skiadas confirmed the CapEx guidance of $16-$16.5 billion is sufficient for growth initiatives, citing near completion of C-Band build (remaining on small cells), continued fiber build pace (2M+ passings), and narrowed focus to mobility and broadband. He noted significant reductions in non-core areas like business wireline, legacy copper, and projects with long paybacks. CEO Dan Schulman added that the $16-$16.5 billion is a substantial amount, and the company is aggressively rationalizing investments in unprofitable areas.

Ben Swinburne of Morgan Stanley questioned Verizon's past reliance on price increases, asking how the company plans to drive consumer share higher without a painful back book repricing, given financial commentary on accelerating earnings. He also inquired about Verizon's openness to temporarily increasing leverage for strategic opportunities like spectrum acquisition.

Answer

CEO Dan Schulman stated that Verizon would address customer pain points (price increases, experience friction, value perception, competitive intensity) through best-in-class experience, convergence, and segmented offers, rather than solely relying on pricing. CFO Tony Skiadas affirmed comfort with the long-term leverage target of 2.0x-2.25x, noting strong cash flows and balance sheet flexibility for opportunistic investments, while acknowledging a temporary increase post-Frontier acquisition.

Ben Swinburne questioned Verizon's past reliance on price increases, asking how the company plans to drive consumer share higher without a painful back book repricing, given the goal of accelerating earnings and free cash flow. He also inquired about the willingness to temporarily increase leverage for strategic opportunities like spectrum acquisitions.

Answer

CEO Dan Schulman stated Verizon will address customer pain points (price, experience friction, value perception, competition) through best-in-class experience, convergence, segmented offers, and a thoughtful marketing mix, aiming for fair share of new postpaid adds and reduced churn without irrational aggression. CFO Tony Skiadas affirmed comfort with the long-term leverage target (2.0-2.25x), highlighting strong cash flows and balance sheet flexibility for opportunistic strategic investments, noting a temporary increase post-Frontier acquisition.

Benjamin Swinburne of Morgan Stanley asked about Verizon's capital allocation strategy for its increased free cash flow from tax benefits, and for an update on the consumer wireless outlook, specifically regarding net adds and churn normalization in the second half of 2025.

Answer

Chairman and CEO Hans Vestberg confirmed that capital allocation priorities are unchanged but a holistic update will be provided closer to the Frontier acquisition closing. He reiterated the ambition for year-over-year improvement in consumer net adds, contingent on financial discipline. EVP & CFO Tony Skiadas added that the tax benefits are permanent and detailed several initiatives aimed at reducing churn, including C-band deployment and AI-powered customer experience enhancements.

Benjamin Swinburne asked about the drivers behind the gross adds improvement in March and April, the competitive environment, and whether any Q1 EBITDA expenses should be considered non-recurring.

Answer

Consumer Group CEO Sowmyanarayan Sampath attributed the strong gross adds momentum—mid-single-digit growth in March and double-digit growth in April—to the positive reception of the new Verizon Value Guarantee. CFO Tony Skiadas confirmed the Q1 EBITDA strength was sustainable, driven by strong service revenue, ongoing cost transformation, and benefits from a voluntary separation program, and was not due to one-time items.

Benjamin Swinburne from Morgan Stanley asked about the drivers of consumer ARPA growth and the competitive landscape. He also questioned how much of the AI Connect opportunity relies on existing assets versus requiring new capital investment.

Answer

CEO Hans Vestberg stated that Verizon is competing better with its improved network, products, and brand. Consumer Group CEO Sowmyanarayan Sampath elaborated that the strong value proposition, a better balance of price and volume, and successful price-ups (over $1 billion baked in for 2025) are driving ARPA growth. He also highlighted new monetization avenues like network slicing. Regarding AI Connect, Business Group CEO Kyle Malady explained that the strategy primarily leverages existing assets and investments made over the last decade in One Fiber and Fios. He confirmed that any new capital needed for edge-outs or retrofitting is already included in the existing CapEx guidance.

Benjamin Swinburne asked about the drivers of consumer ARPA growth and the competitive landscape. He also inquired about the AI Connect opportunity, specifically how much of it leverages existing assets versus requiring new investment within the current CapEx guidance.

Answer

Consumer Group CEO Sowmyanarayan Sampath attributed ARPA strength to a strong value proposition, price-ups for added value, and customers selecting premium plans and perks. Business Group CEO Kyle Malady clarified that the AI opportunity primarily leverages existing fiber and network assets, with any new spending for retrofits or edge-outs already included in the CapEx envelope.

Benjamin Swinburne (Morgan Stanley) asked about AT&T's capital allocation for future spectrum investments, particularly given potential FCC auctions, and the company's view on any additional spectrum needs. He also questioned if the 2026 guidance incorporates expectations for a foldable iPhone's impact on consumer demand, upgrade rates, and the competitive environment.

Answer

CEO John Stankey confirmed reserved capacity for strategic options, viewing the EchoStar transaction as preemptive, allowing for more judicious future spectrum investments. He noted industry dynamics are shifting towards specific bands for specific players, reducing broad competition. Stankey also highlighted network densification and offloading capabilities as factors reducing the need for constant aggressive spectrum investment. COO Jeff McElfresh and Stankey indicated that foldable devices, including a potential iPhone, are not expected to be a broadly applicable form factor, and AT&T will maintain disciplined customer acquisition.

Benjamin Swinburne asked if AT&T has reserved capacity for future spectrum investments beyond the EchoStar transaction and the company's view on any additional spectrum needs. He also inquired if the 2026 guidance incorporates any expectations regarding a potential foldable iPhone and its impact on consumer demand and upgrade rates.

Answer

CEO John Stankey confirmed that AT&T has reserved capacity for other strategic options, viewing the EchoStar transaction as preemptive. He believes future spectrum investments will be more targeted due to network densification. Regarding foldable iPhones, Stankey sees them as a niche form factor with limited broad market appeal, not expecting a significant shift in demand. COO Jeff McElfresh added that AT&T will remain disciplined in its customer acquisition strategy.

Benjamin Swinburne inquired about AT&T Internet Air's momentum, asking how AT&T segments the market between fiber and fixed wireless for efficient marketing and its approach to the SMB segment. He also asked CFO Pascal Desroches about the path to mobility EBITDA margin expansion given the elevated competitive environment and higher subscriber acquisition costs.

Answer

Chairman and CEO John Stankey explained that AT&T's marketing now focuses on "internet from AT&T" nationwide, with digital marketing tailored to specific geographies to optimize lead offers. He stressed that AT&T Internet Air subscribers should not be in fiber footprints due to fiber's lower marginal cost. Stankey noted improving SMB momentum for AT&T Internet Air, particularly in owned channels, with future growth dependent on ramping third-party distribution. CFO Pascal Desroches affirmed expectations for overall company margin expansion, citing ongoing transformations like copper network reduction, wireless network modernization (substantially complete by end of 2027), and increased convergence leading to lower churn and improved acquisition spend efficiency.

Benjamin Swinburne asked about AT&T Internet Air's momentum, how the company segments the market between fiber and fixed wireless, and its marketing efficiency, including the approach to small and medium businesses (SMB). He also questioned CFO Pascal Desroches on how mobility EBITDA margins are expected to expand over the next couple of years, given current pressures from higher equipment and subscriber acquisition costs in a competitive environment.

Answer

Chairman and CEO John Stankey explained AT&T's shift to technology-agnostic 'internet from AT&T' messaging, leveraging digital marketing for targeted offers, and ensuring Internet Air does not overlap with fiber footprints. He noted SMB momentum but identified third-party distribution as an area for improvement. CFO Pascal Desroches stated that overall company margin expansion is expected, driven by ongoing network transformations (reducing copper, wireless modernization by 2027) and increased convergence, which should lead to lower churn and improved efficiency in acquisition spending.

Benjamin Swinburne of Morgan Stanley asked for a comparison of the expected returns on the next 30 million fiber locations versus the first 30 million. He also inquired about the quality and returns of incremental mobility customers, looking beyond the churn metric to understand the overall health of the business.

Answer

CEO John Stankey explained that while later fiber builds may not be as profitable as the first, all planned locations meet the company's return hurdles, with convergence benefits further improving economics. He emphasized that mobility growth is focused on high-value, paying customers, not free lines, which improves lifetime values. Stankey highlighted that the accelerating rate of converged fiber and wireless subscribers demonstrates the success of this investment strategy.

Benjamin Swinburne of Morgan Stanley inquired about a press report regarding a potential acquisition of Lumen's consumer fiber business and asked for more detail on how recent FCC orders could accelerate legacy network cost reductions.

Answer

CEO John Stankey declined to comment on market rumors but reiterated that AT&T's inorganic strategy focuses on accelerating its converged connectivity goals. Regarding the FCC, he stated the company is now experiencing 'regulatory tailwinds,' with about 25% of its wire centers having a clear path for sunsetting legacy copper. This shifts the primary challenge from regulatory approval to operational execution of the cost-saving plans.

Benjamin Swinburne asked if the pent-up fiber demand from the Q3 labor strike could be quantified and inquired about confidence in fiber ARPU growth amid cable's converged offers. He also questioned the outlook for mobile gross adds and whether they could inflect positively in 2025.

Answer

CEO John Stankey described the pent-up demand as 'not substantial' and not expected to carry into Q1. He expressed confidence in fiber ARPU growth, noting AT&T's pricing remains below cable's umbrella, and growth is driven by price adjustments and mix shift. Regarding mobile, he expects gross add performance to improve in certain segments but does not anticipate outsized numbers given the smaller overall growth pool.

Benjamin Swinburne asked about the initial performance of ESPN's direct-to-consumer service, including adoption, engagement, package appeal, and its long-term impact on the business. He also inquired about the underlying growth drivers for cash from operations in fiscal 2026, adjusting for the $1.7 billion cash tax swing.

Answer

CEO Bob Iger highlighted the success in attracting new users and encouraging engagement from existing linear subscribers, noting strong sign-ups for the 'ultra' product and the Trio bundle (ESPN, Disney+, Hulu). He emphasized the effectiveness of new features and algorithms, and the value for advertisers. CFO Hugh Johnston explained that the adjusted cash from operations growth of 28% is driven by strong operating income growth and leveled-off investment, providing flexibility for shareholder returns.

Benjamin Swinburne asked about the strategic and financial value of the new NFL relationship for ESPN, questioning how it will drive growth, and also sought confirmation on the company's fiscal 2026 guidance.

Answer

CEO Bob Iger detailed that the NFL deal is accretive in its first year, increases game windows from 22 to 28, and enhances the ESPN app with features like betting and fantasy integration. CFO Hugh Johnston stated that while 2026 guidance will be updated in Q4, the new NFL and WWE deals do not materially change their previous outlook.

Benjamin Swinburne asked about the tangible benefits of integrating Hulu and sports content into Disney+, specifically regarding user engagement and churn, and sought confirmation on the company's long-term earnings growth guidance.

Answer

CEO Robert Iger confirmed that the content integration is positively impacting engagement and reducing churn. He outlined a three-part growth strategy for streaming: deeper product integration, technology enhancements like paid sharing, and increased investment in local international content. CFO Hugh Johnston affirmed that the long-term, double-digit earnings growth guidance for fiscal '26 and '27 remains intact, even off the higher fiscal '25 EPS base.

Benjamin Swinburne asked about the most impactful Disney+ platform enhancements, such as password sharing and ESPN bundling, and the timeline for seeing tangible results. He also requested an update on the Parks & Experiences outlook, particularly regarding the competitive impact of Universal's Epic Universe opening.

Answer

CEO Bob Iger explained that Disney+ technology enhancements are rolling out continuously over the next year, focusing on paid sharing, personalization, and a more dynamic home screen, with significant progress expected by year-end. CFO Hugh Johnston reaffirmed the 6-8% annual growth guidance for Experiences, stating that strong Q1 results increase confidence and that the financial plan already accounts for potential competitive impacts.

Benjamin Swinburne asked about the strategic launch of the ESPN flagship streaming service, its potential impact on the customer experience, and its role in driving growth beyond fiscal 2025. He also requested color on the expected acceleration in Experiences operating income.

Answer

CEO Robert Iger detailed that the ESPN flagship service will be a completely new, technology-driven experience with features like AI-driven personalization and integrated betting. CFO Hugh Johnston explained that Experiences OI will be negative in Q1 due to hurricane impacts and launch costs for the Disney Treasure, but will strengthen through the year driven by the new ship, lapping prior labor costs, and an expected strengthening of the consumer.

Ben Swinburne asked about opportunities to combine the remaining paired AWS-3 spectrum with the upcoming auction to monetize the asset and mitigate EchoStar's multi-billion dollar liability. He also sought insight into the strategic vision for the Boost business, its path to cash flow positive, and the impact of network decommissioning on its expense base.

Answer

Charlie Ergen, CEO and Chairman of EchoStar, indicated ongoing discussions with the FCC to ensure the most efficient AWS-3 auction, aligning with the FCC's vision for rapid spectrum deployment. For Boost, Ergen outlined a strategy focused on technology differentiation, citing the SpaceX agreement for worldwide connectivity as a key move. Hamid Akhavan, President and CEO of EchoStar Capital, added that the reduction of fixed network costs and the usage-based MVNO deal with AT&T would significantly shorten the path to profitability for Boost.

Ben Swinburne inquired about opportunities to combine the remaining AWS-3 spectrum with the upcoming auction to monetize assets and de-risk EchoStar's multi-billion dollar liability. He also asked about the strategic vision for the Boost business, its path to cash flow positive, and the impact of network decommissioning on expenses.

Answer

Charlie Ergen, CEO and Chairman of EchoStar, indicated ongoing discussions with the FCC to ensure the most efficient AWS-3 auction and spectrum utilization, aligning with the FCC's vision. For Boost, he outlined a strategy focused on technology differentiation, including a worldwide connectivity agreement with SpaceX, and doing things differently from competitors. Hamid Akhavan, President and CEO of EchoStar Capital, added that reduced fixed costs from decommissioning and the MVNO deal with AT&T should shorten the path to profitability for Boost.

Benjamin Swinburne questioned the logic of pausing 5G network spending while moving forward with the LEO project investment. He also asked for the rationale behind delaying details until a conference in Paris and what the FCC's ultimate goal might be.

Answer

Director, President & CEO Hamid Akhavan explained that the LEO project is time-critical to maintain a market advantage, whereas pausing the terrestrial build has less immediate impact due to existing coverage. He noted more details will come in Paris as other project components are finalized. Regarding the FCC, he stated EchoStar believes it has met all obligations and could not speculate on the agency's end game.

Benjamin Swinburne requested the specific dollar amount for 2024 operating free cash flow and asked if the total free cash flow burn is expected to decrease in 2025. He also questioned Paul Gaske on HughesNet's competitive positioning against Starlink.

Answer

Paul Orban, EVP and PFO, did not provide a specific number for operating free cash flow but confirmed it exceeded expectations, while noting that a $500 million increase in 2025 interest payments will be a drag on total free cash flow. Paul Gaske, COO for Hughes, positioned HughesNet as a differentiated, economical solution for rural customers focused on video streaming, contrasting with Starlink's broader market approach.

Ben Swinburne asked about the bridge to achieving the $3 billion EBITDA ambition for the studio, given its strong performance in 2025, and how this level of profitability compares historically. He also inquired about any potential tax implications should Warner Bros. Discovery pursue strategic alternatives, such as selling Warner Bros. and spinning Discovery Global, specifically if this puts the tax-free nature of the planned separation at risk.

Answer

Gunnar Wiedenfels, CFO, declined to provide further color on the tax implications of the strategic review process. David Zaslav, President and CEO, detailed the studio's strategy to reach $3 billion EBITDA, focusing on leveraging known IP (DC, Harry Potter, Lord of the Rings), mini-tentpoles (Gremlins), and originals, alongside disciplined content use and monetizing the extensive TV and motion picture library. He also highlighted the strength of Warner Bros. Television under Channing Dungey and new initiatives in experiences and merchandising. Wiedenfels added that the shift from external to internal library monetization and the transition to SVOD-focused production would support future profitability.

Ben Swinburne asked about the path to achieving the $3 billion EBITDA ambition for the studio, detailing the strategies to bridge current performance to this profitability target. He also inquired about potential tax implications of a structural change, such as selling Warner Bros. and spinning Discovery Global, specifically whether this could jeopardize the tax-free nature of the planned separation.

Answer

CFO Gunnar Wiedenfels stated that the strategic review process does not put the tax-free nature of the planned separation at risk. CEO David Zaslav outlined the studio's strategy to achieve $3 billion EBITDA, emphasizing leveraging known IP, disciplined content creation across various genres, mining underused franchises, judicious internal library monetization for HBO, and strengthening TV production under Channing Dungey. CFO Gunnar Wiedenfels further elaborated on the shift to internal library monetization and the long-term benefits of the transition to SVOD-focused production.

Benjamin Swinburne requested more detail on the path to achieving three long-term goals: stabilizing Networks segment revenue, reaching a 20% DTC margin, and generating over $3 billion in Studios EBITDA.

Answer

CFO Gunnar Wiedenfels clarified that 'stabilizing' Networks revenue refers to the company's position within industry trends, not guiding to flat revenue. He stated the 20% DTC margin is achievable but they will prioritize long-term asset value over hitting a specific margin timeline. For the Studios' $3B+ EBITDA goal, he cited improved content library availability, a recovery in the games business, and better franchise management as key drivers for a significant step-up in 2025.

Benjamin Swinburne asked for confirmation of a profit bounce-back at the Studios segment in the next year and questioned the strategic rationale for keeping the declining Networks business combined with growth assets like Studios and Streaming, probing the benefits of the 'One WBD' structure.

Answer

CFO Gunnar Wiedenfels confirmed the Studios segment is poised for a bounce-back across film, TV, games, and licensing, with a target of '$3 billion and then growth from there.' He defended the 'One WBD' strategy by highlighting the benefits of an integrated company, especially for content, using the cross-platform success of 'The Penguin' as a prime example of creating value that would be lost in a separation.

Ben Swinburne (Morgan Stanley) inquired about the potential structure and market viability of hybrid satellite-terrestrial networks, particularly concerning Starlink. He also sought an update on the international churn outlook, specifically addressing carrier consolidation and challenges in Brazil, and asked about the benefits Verizon accrues from its new MLA with SBA.

Answer

Brendan Cavanagh, President and CEO of SBA, stated that discussions on hybrid satellite-terrestrial networks are too preliminary for speculation. On international churn, he acknowledged ongoing challenges from carrier consolidation and Brazil's Oi situation, expecting a significant reduction in churn within a couple of years once these issues are resolved, noting Central America has largely stabilized. For the Verizon MLA, Mr. Cavanagh highlighted Verizon's need for efficient network expansion, cost certainty, and ease of doing business, including leveraging SBA's end-to-end services capabilities.

Benjamin Swinburne of Morgan Stanley asked for commentary on EchoStar's LEO satellite project and its potential to compete with or complement the tower business. He also asked for an explanation for the increase in the domestic straight-line revenue guidance.

Answer

President and CEO Brendan Cavanagh positioned satellite as a complementary solution for areas that are economically challenging for traditional macro coverage. He viewed a potential EchoStar solution as favorable for the industry. He explained the straight-line revenue increase was due to lease term extensions under the AT&T MLA, which are triggered when AT&T performs upgrades on sites.

Benjamin Swinburne asked for an assessment of the visibility into full-year domestic site leasing growth, given the positive activity trends. He also requested an update on the expected financial contribution from the Millicom acquisition, assuming a September 1 close for the bulk of the assets.

Answer

President and CEO Brendan Cavanagh stated that while activity is strong, it is still early in the year, so the company is maintaining its full-year U.S. leasing guidance range for now, though trends point toward the higher end. Regarding the Millicom deal, he confirmed that the overall financial contribution outlook remains unchanged from the original announcement, aside from the minor timing benefit of the small early closing.

Ben Swinburne from Morgan Stanley asked about Comcast's strategy for converting free wireless lines to paid subscriptions next year, focusing on ensuring customer quality and setting guardrails for convergence revenue growth. He also sought clarification on Epic Universe's operating leverage and ride throughput expansion.

Answer

Dave Watson, CEO of Comcast, emphasized the focus on quality connects and proactive strategies for converting free lines to paid status, leveraging past promotional experience and targeting high-end segments with new premium wireless tiers. Jason Armstrong, CFO of Comcast, explained that free lines address awareness issues and the premium plans cater to high-end users, positioning wireless for strong growth beyond the current investment year. Mike Cavanagh, President of Comcast, highlighted Epic Universe's success in driving higher per-cap spending and attendance across Universal Orlando, with current efforts focused on increasing ride capacity and scaling the park to full operating leverage over the next year.

Ben Swinburne asked about Comcast's strategy for converting free wireless lines to paid subscriptions next year, focusing on ensuring customer quality and implementing guardrails for successful monetization. He also sought more details on Epic Universe's performance, specifically regarding expanding ride throughput and operating leverage.

Answer

Dave Watson (CEO, Comcast) highlighted the focus on quality connects and proactive strategies for migrating free lines to paid status, leveraging experience with promotional activities and targeting high-end segments with new premium wireless tiers. Jason Armstrong (CFO, Comcast) added that the free line offer addresses awareness issues and the premium plans cater to high-end users, setting up the company for competitiveness beyond the initial investment year. Mike Cavanagh (President, Comcast) noted Epic Universe's strong performance, driving higher per-cap spending and attendance across Universal Orlando, with a focus on increasing ride capacity and scaling up in the coming months for improved operating leverage.

Benjamin Swinburne asked about the outlook for convergence revenue growth, the expected cash tax benefit in 2025, and the financial trajectory for Peacock considering the NBA contract, price increases, and upfront results.

Answer

CFO Jason Armstrong estimated a cash tax benefit of roughly $1 billion in 2025 and noted convergence revenue may see near-term pressure before reaccelerating. President Michael Cavanagh detailed that while the NBA contract adds significant costs starting in Q4, this is offset by a recent price increase and record sports upfront sales, positioning the overall media business for future growth post-Versant spin.

Benjamin Swinburne asked about the outlook for convergence revenue growth, requested a cash tax forecast for 2025 following recent legislation, and inquired about the financial trajectory for Peacock for the remainder of the year.

Answer

CFO & Treasurer Jason Armstrong estimated the annual cash tax benefit at roughly $1 billion and noted convergence revenue may see near-term pressure before reaccelerating. President Michael Cavanagh detailed Peacock's positive momentum, explaining that while the business will absorb new NBA costs, this will be offset by a recent price increase and record upfront advertising sales, positioning the media business for future growth.

Benjamin Swinburne requested an updated outlook on Peacock's financial losses for the remainder of 2025 and sought clarity on the 'investment' required for the pivot in the Connectivity business, particularly the impact on near-term ARPU and profitability.

Answer

Michael Cavanagh, President, indicated that Peacock is on a path of improving monetization and declining losses over time, driven by scaling the business and leveraging key sports rights like the upcoming NBA contract. Jason Armstrong, CFO, reiterated the expectation for healthy broadband ARPU growth but noted the investment in new go-to-market strategies will make it difficult to grow EBITDA this year. He framed it as a long-term play to create more durable customer relationships with future pricing leverage.

Benjamin Swinburne asked about Comcast's shift in wireless strategy, inquiring if success means accelerating net adds and what investments in areas like handset subsidies should be expected. He also asked for the long-term vision for NBC's Media business after the planned spin-off.

Answer

President Michael Cavanagh confirmed a more aggressive wireless strategy, including simplified bundles and targeting the existing customer base. CEO of Comcast Cable David Watson added this is a fundamental shift to package mobile with higher-tier broadband. CEO Brian Roberts noted that industry consolidation from four to three major carriers creates a favorable environment for a new entrant. Regarding the media business, Roberts and Cavanagh explained the spin-off allows for focused management, as 98% of Peacock viewing is unrelated to the spun-off networks. The remaining NBCUniversal will focus on a broadcast-plus-streaming strategy centered on NBC, Bravo, and Peacock, leveraging key sports rights like the NBA and Olympics.

Benjamin Swinburne asked for clarity on the strategic review of media assets, questioning which assets are being considered and the complexity of separating Peacock from linear networks. He also inquired about the outlook for broadband subscriber growth in the fourth quarter.

Answer

President Michael Cavanagh clarified the strategic study is focused on potentially spinning off the cable network portfolio into a new company for shareholders, and does not include Peacock or Broadcast. Executive Vice President David Watson addressed the broadband outlook, noting that while Q3 benefited from unique factors like the Olympics and a competitor's work stoppage, Q4 faces a competitive environment without those tailwinds, plus some impact from recent hurricanes.

Benjamin Swinburne sought an update on the EchoStar situation, including any court dates, and questioned American Tower's perspective on CoreSite's valuation and potential ownership structure given the stock buybacks and widening multiple spread between data centers and towers.

Answer

President and CEO Steve Vondran stated that the EchoStar lawsuit was recently filed, with no court dates yet, and the company is confident in its valid contract. He affirmed CoreSite's strong fit and long-term synergies with American Tower, emphasizing a focus on maximizing its value and proving out the edge. He clarified that stock buybacks are opportunistic, based on the enterprise's overall value, not specifically CoreSite's valuation.

Benjamin Swinburne asked for an update on the EchoStar situation, specifically regarding court dates or next steps, and how American Tower views CoreSite's value and ownership structure given the stock buybacks and the widening multiple spread between data center stocks and towers.

Answer

President and CEO Steve Vondran stated that the EchoStar lawsuit was just filed, with no docket dates yet, and American Tower is confident in its valid, enforceable contract. Regarding CoreSite, Vondran affirmed its great fit with American Tower, believing in long-term synergies at the edge and its phenomenal performance. He clarified that stock buybacks are opportunistic, based on the overall enterprise value, and not related to CoreSite's specific valuation or ownership structure, as American Tower is committed to growing CoreSite within its business model. EVP, CFO, and Treasurer Rod Smith reminded that there is a $2 billion board authorization for buybacks, which they are just beginning to tap into.

Benjamin Swinburne questioned if CoreSite's strong performance alters the company's long-term strategic view of the asset. He also asked if increased carrier bullishness on fixed wireless is translating into tangible demand for tower capacity.

Answer

President & CEO Steven Vondran stated the strategic rationale for owning CoreSite—its role in the future of edge computing—remains intact and is even stronger today. The focus is on maximizing its value. Regarding fixed wireless, Vondran said carriers are still using fallow network capacity, and AMT is not yet seeing incremental demand directly tied to it, though it represents a potential future upside.

Benjamin Swinburne asked for updated thoughts on the impact of fixed wireless growth on carrier network investment. He also requested an update on the process and focus areas for the company's cost savings initiative.

Answer

CEO Steven Vondran stated that while fixed wireless is a positive monetization tool for carriers, they are still using existing fallow capacity, and there is no indication of investment in dedicated networks, which would be an upside. CFO Rod Smith reiterated that teams are analyzing cost components like O&M and development CapEx for the savings initiative, but it is too early to provide specific targets.

Ben Swinburne asked about the overall health of the business as Netflix approaches the end of 2025 and looks into 2026, and how management frames the opportunities ahead.

Answer

Co-CEO Greg Peters stated the business is very healthy, with Q3 revenue in line and operating income exceeding forecasts (absent a Brazilian tax matter). He highlighted healthy engagement, record TV time share in the U.S. and U.K., best ad sales quarter ever (on track to more than double ad revenue), and progress in live offerings and games. Co-CEO Ted Sarandos added that Netflix is only about 7% of the addressable market in consumer spending and 10% of TV time in its biggest market, indicating enormous room for profitable growth. He emphasized embracing change, thriving on competition, and the success of original content like 'K-pop, Demon Hunters,' which is their most popular film ever and led to a unique toy licensing partnership.

Ben Swinburne asked about the overall health of Netflix's business and the strategic opportunities for 2026, seeking a broad framing of the path ahead.

Answer

Co-CEO Greg Peters highlighted a healthy business with Q3 revenue in line and operating income exceeding forecasts (absent tax matter). He noted record engagement, best-ever ad sales, and progress in live offerings and games. Co-CEO Ted Sarandos emphasized the massive market opportunity, with Netflix only capturing 7% of consumer spending and 10% of TV time, and discussed the company's ability to thrive on competition and create global hits like 'K-pop, Demon Hunters'.

Asked for data on advertising upfront negotiations, clarification on engagement metrics, and key learnings from the success of the animated film 'K-Pop: Demon Hunters'.

Answer

Executives reported that ad upfronts are nearly complete and performing well, in line with the goal of doubling the ads business. They clarified that engagement is measured on a per-owner-household basis to normalize for paid sharing, and this metric is stable. The success of 'K-Pop: Demon Hunters' validates their strategy for original animation, highlighting the power of combining storytelling, music, and pop culture to create hits.

Ben Swinburne of Morgan Stanley inquired about upfront advertising negotiations, how to reconcile engagement growth with per-member metrics, and the key learnings from the animated film 'K-Pop: Demon Hunters'.

Answer

Co-CEO Greg Peters reported that the US ad upfronts were nearly complete and in line with the goal to double ad revenue. He also clarified that per-owner-household engagement remains steady. Co-CEO Ted Sarandos highlighted the success of 'K-Pop: Demon Hunters' as proof of their strength in creating hit original animated features that can drive culture.

Ben Swinburne of Morgan Stanley asked about the key learnings from the success of the animated film 'K-Pop: Demon Hunters'.

Answer

Co-CEO Ted Sarandos highlighted the success of original animation, a difficult category, as a key achievement. He noted that the film's ability to generate hit music that pierces the broader culture is a significant learning, demonstrating how content can create fandom that extends beyond the initial viewing experience.

Ben Swinburne from Morgan Stanley asked about the key learnings from the success of the animated film 'K-Pop: Demon Hunters'.

Answer

Co-CEO Ted Sarandos expressed pride in achieving a major hit with an original animated feature, a category he described as very tough. He highlighted the importance of getting the mix of music and pop culture right. A key learning was the ability to generate enormous, standalone music hits from a film exclusive to the platform, demonstrating Netflix's capacity to 'pierce the culture' with original animation and its associated intellectual property.

Benjamin Swinburne inquired about Cinemark's capital allocation strategy, specifically concerning the settlement of its convertible notes, the potential for accelerated warrant settlement, and the impact on shareholder returns. He also asked for quantification of cash flow benefits from recent tax legislation.

Answer

CFO Melissa Thomas explained that the current plan is to settle the convertible note warrants with shares, though the final decision is contingent on multiple factors. She noted that while addressing the notes is a near-term priority, future capital returns depend on the company's cash position, liquidity, and leverage. Regarding tax changes, she stated it was premature to quantify but expects "meaningful benefits" from bonus depreciation and loosened interest expense limitations.

Benjamin Swinburne of Morgan Stanley inquired about theatrical release expectations from Amazon and Apple following CinemaCon, and asked for an outlook on Q2 market share performance given the favorable film mix versus a strong prior-year comparable.

Answer

CEO Sean Gamble expressed high confidence in Amazon's plan to release 14-16 films theatrically by 2027, citing their significant investments. He noted Apple is in an earlier strategic phase. Regarding market share, Gamble acknowledged the favorable Q2 film mix but cautioned that a higher volume of blockbusters could create capacity constraints, potentially compressing share from record highs, which would signify healthy, high demand.

Benjamin Swinburne posed several cash flow-related questions regarding the 2025 cash tax rate, the long-term capital spending framework, the board's free cash flow payout philosophy, and the outlook for the 2026 film slate returning to pre-pandemic levels.

Answer

CFO Melissa Thomas projected a meaningful step-up in cash taxes for 2025, with a normalized effective rate returning closer to 30%. She affirmed a long-term CapEx range of $200M-$250M. The capital return philosophy prioritizes flexibility and risk mitigation within a 2-3x net leverage target. CEO Sean Gamble expressed optimism that the 2026 film slate volume will continue to close the gap with pre-pandemic levels, citing a strong tentpole lineup and contributions from new entrants.

Benjamin Swinburne of Morgan Stanley asked about the strategic balance between implementing significant cost savings while simultaneously aiming to accelerate growth through targeted investments, and also inquired about Warner Music's practical applications of generative AI.

Answer

CEO Robert Kyncl addressed the growth strategy, outlining a four-point plan: freeing up capital via reorganization, accelerating M&A with the Bain Capital JV, focusing resources on high-potential markets, and leveraging strong leadership. On AI, he cited the WMG Pulse app, which will use GenAI to provide artists with deeper, actionable insights from their streaming data.

Benjamin Swinburne of Morgan Stanley asked about the strategy to accelerate growth while simultaneously cutting costs, and inquired about Warner Music's practical applications of generative AI.

Answer

CEO Robert Kyncl explained that the strategy involves reinvesting capital from the reorganization, accelerating M&A through the Bain Capital JV, focusing on high-potential markets, and leveraging strong leadership. For AI, he cited its use in the WMG Pulse app to generate deeper performance insights for artists.

Benjamin Swinburne asked about the new Spotify deal, specifically if it moves Warner Music Group's model closer to a wholesale pricing structure, and questioned the drivers behind the significant foreign exchange impact on margins.

Answer

CEO Robert Kyncl confirmed the new Spotify agreement represents a positive step toward increasing the value of music, similar to their Amazon deal, but declined to share specific structural details. CFO Bryan Castellani clarified that the currency headwind is not related to artist royalty deals but is due to approximately 58% of revenue being in non-U.S. dollar currencies, creating in-period exposure that impacts OIBDA.

Benjamin Swinburne from Morgan Stanley inquired about the specific strategies from the acquired 10K label being applied to the larger Atlantic Records group and sought more detail on the company's optimism regarding wholesale pricing changes with partners like Spotify.

Answer

CEO Robert Kyncl credited the 10K label with bringing a digitally native approach, intensity, and strong talent development skills to Atlantic. Regarding wholesale pricing, Kyncl asserted that price increases are a standard business practice in most industries, and music should be no different. CFO Bryan Castellani added that while subscriber growth remains the primary driver, any gains on wholesale pricing would provide upside to their financial outlook.

Benjamin Swinburne of Morgan Stanley asked for more detail on the rise in internet churn and competitive intensity, and inquired about TELUS's appetite for new data center capital deployment.

Answer

EVP & President of TELUS Consumer Solutions, Zainul Mawji, acknowledged the churn uptick due to affordability pressures and outlined AI-driven retention efforts. President and CEO Darren Entwistle stated that TELUS is in a 'fortuitous' position, recycling previously built world-class data centers for its AI factory, making new capital deployment 'de minimis'.

Benjamin Swinburne sought more color on the drivers of higher year-over-year churn in the Internet business and asked if TELUS plans to deploy new capital for data center construction.

Answer

Zainul Mawji, EVP & President of Consumer Solutions, attributed the churn uptick to consumer affordability constraints and outlined measures to improve it using AI-driven pricing and bundling. President and CEO Darren Entwistle stated that new capital for data centers is not needed, as TELUS is 'bootstrapping' by recycling its existing world-class data centers for its sovereign AI factory, making the required investment 'de minimis'.

Benjamin Swinburne of Morgan Stanley asked about the potential to unlock value in TELUS Health via an IPO or other monetization, and whether the new segment disclosure was a step in that direction. He also inquired about the competitive wireless environment in early Q2.

Answer

EVP Navin Arora confirmed that TELUS is open to monetization opportunities for the Health segment at the right time to maximize value, focusing first on execution to improve its valuation. EVP & CFO Doug French added there has been significant strategic interest. Regarding the Q2 market, EVP Zainul Mawji noted that while she couldn't comment on peers, TELUS was seeing some signs of market discipline and remained focused on its own value-driven approach.

Benjamin Swinburne from Morgan Stanley inquired about the wireless marketplace, focusing on the pricing environment and ARPU trends for 2025. He noted the recent ARPU decline and a price increase on Public Mobile, asking what is underpinning the company's guidance and how the current environment compares to the past year.

Answer

Zainul Mawji, EVP, acknowledged the competitive market and stated that guidance assumes similar challenging dynamics, though she is not satisfied with current ARPU or churn performance. Navin Arora, EVP, pointed to growth assets like IoT and digitization efforts to protect margins. CFO Doug French suggested some pricing rationality may emerge across the industry to support higher costs. CEO Darren Entwistle concluded that the guidance is not predicated on a 'miraculous ARPU recovery.'

Benjamin Swinburne of Morgan Stanley asked for insights on how Generative AI could drive incremental tower revenue and inquired about the drivers behind the improved service gross margins.

Answer

Interim President and CEO Daniel Schlanger responded that while specific AI use cases are still emerging, valuable technologies historically become mobile, which would drive data demand on networks. He confirmed that the recent improvements in service gross margin are structural and sustainable, stemming from a successful focus on optimizing processes and cost structures within the tower team.

Benjamin Swinburne questioned the phasing of expenses for the rest of the year given the strong Q1 margin performance and asked about any potential tax implications from the pending fiber and small cell sale.

Answer

Interim CEO Daniel Schlanger confirmed there are no tax implications from the sale to consider. On expenses, he explained that while Q1 margins were strong, some of the lower costs were due to timing and seasonality and are expected to be incurred later in the year. He also noted that the company's focus on cost control is yielding results but cautioned that annualizing Q1 EBITDA would be inappropriate, partly due to straight-line revenue turning negative later in the year.

Benjamin Swinburne questioned Fox's direct-to-consumer strategy, asking how the company plans to launch a D2C service without cannibalizing its valuable MVPD relationships, and also asked for thoughts on potential FCC regulation of reverse retransmission fees.

Answer

CEO Lachlan Murdoch emphasized that Fox remains highly supportive of the traditional pay-TV bundle. He explained the D2C service, FOX 1, is specifically targeted at 'cord-nevers,' leveraging learnings from Tubi, where 65% of users are outside the pay-TV ecosystem. Regarding the FCC, he stated that while they cannot speculate, they believe the current market-based affiliate negotiation process is healthy and effective.

Thomas, on behalf of Ben Swinburne, asked about Tubi's growth trajectory, specifically its future investment needs and the timeline to profitability. He also requested an update on the progress of securing sports betting licenses in various states.

Answer

Executive Chair and CEO Lachlan Murdoch stated that investment in Tubi is decreasing as it scales and that it remains on track to reach profitability according to the original business plan. On sports betting, he confirmed they are pursuing licenses in 26 states, a process that is moving forward without significant hurdles, and highlighted the current value of Fox's holdings in FanDuel and Flutter.

Benjamin Swinburne inquired about the dynamics of political advertising on connected TV, specifically Tubi's role, whether it cannibalizes local station revenue, and if the company could quantify the political ad dollars for the cycle.

Answer

Executive Chair and CEO Lachlan Murdoch explained that the political ad cycle has reverted to local and targeted spending, benefiting both stations and Tubi. He noted no evidence of cannibalization, stating Tubi captures new dollars by reaching a hard-to-reach demographic. CFO Steve Tomsic added that the station group's political revenue for the first half of the fiscal year has already surpassed the total from the same period in fiscal 2021, which included the Georgia runoff.

Benjamin Swinburne asked about the upcoming launch of the Venu sports streaming service, its target audience, long-term subscriber potential, and the expected financial impact on Fox in fiscal 2025.

Answer

Executive Chair and CEO Lachlan Murdoch stated that the Venu product looks excellent and revolutionary, reaffirming the business plan's target of 5 million subscribers over 5 years, with a focus on cord-cutters and cord-nevers. CFO Steve Tomsic added that while Fox will record its share of Venu's initial losses via equity earnings, it will also recognize affiliate fee revenue as a key content supplier, making the venture net accretive to Fox on a 'pretty quick basis'.

Benjamin Swinburne from Morgan Stanley asked for an update on the media outlook, focusing on the early performance of the local direct-to-consumer streaming service and the company's strategic view on contributing local rights to a national media package.

Answer

Derek Schiller, President and CEO of the Braves, noted positive early trends for the new DTC streaming option, stating the Braves represent a significant portion of new subscriptions. Chairman and CEO Terence McGuirk added that the Braves' local rights are strong and their expiration is timed with national MLB rights to create future optionality and growth opportunities.

Benjamin Swinburne asked about the strategic and financial impact of the new 2025 local media rights structure with FanDuel and Gray Media, and also inquired about the company's philosophy on its capital structure and leverage.

Answer

Executive Derek Schiller explained that the re-engineered media deals with Main Street Sports Group and Gray Media increase fan accessibility through new streaming and over-the-air options, which is a net positive for the business. Executive Jill Robinson addressed the capital structure, stating the company is comfortable with its current debt levels, differentiating between secured real estate debt and baseball operations debt, where the priority is maintaining liquidity for opportunistic investments.

Benjamin Swinburne inquired about Atlanta Braves Holdings' local media rights strategy for 2025, including the financial and strategic implications of the new FanDuel and Gray Media deals, and also asked about the company's capital structure, target leverage, and free cash flow goals.

Answer

Executive Derek Schiller explained that the new media deals with Main Street Sports Group (formerly Diamond) and Gray Media are a net positive, creating greater fan accessibility through new streaming and over-the-air broadcast options. Executive Jill Robinson addressed the capital structure, stating the company is comfortable with its current debt levels, differentiating between secured real estate debt and baseball operations debt, where the priority is maintaining liquidity for opportunistic investments.

Benjamin Swinburne asked about the primary long-term growth opportunities for Atlanta Braves Holdings and inquired about the conversion of EBITDA to free cash flow, noting the negative cash from operations despite EBITDA growth.

Answer

Derek Schiller, an executive, outlined that future growth will stem from ROI-focused investments in both Truist Park and the Battery Atlanta, such as master plan projects and upgrading tenant leases, all guided by enhancing the fan experience. Jill Robinson, an executive, clarified that the decline in year-over-year OIBDA was driven by higher player payroll, MLB revenue sharing, and minor league costs, while negative operating cash flow was primarily due to capital improvements.

Benjamin Swinburne inquired about Atlanta Braves Holdings' primary long-term growth opportunities and the key drivers for revenue and cash flow. He also asked for clarification on the conversion of EBITDA to free cash flow, noting the negative cash from operations despite EBITDA growth.

Answer

Derek Schiller, an executive, outlined growth strategies centered on ROI-positive investments in Truist Park and The Battery Atlanta, emphasizing fan experience and upgrading tenant leases. Jill Robinson, an executive, addressed the financials, explaining that year-over-year OIBDA declined due to rising player payroll, MLB revenue sharing, and minor league costs. She clarified that the negative operating cash flow was primarily due to capital expenditures for the master planning project.

Benjamin Swinburne of Morgan Stanley asked for a longer-term view on the dynamic between declining linear subscription revenue and growing D2C subscription revenue. He sought clarity on the expected drivers for both segments and whether recent linear trends are indicative of the future.

Answer

CFO Naveen Chopra explained that the primary driver of linear decline is the pay-TV ecosystem's subscriber losses, with recent deal renewals also having an impact, and stated the Q1 trend is indicative of the next few quarters. For streaming, he identified continued subscriber growth, improved churn, and ARPU increases as the clear drivers for revenue growth and scaling profitability.

Benjamin Swinburne asked for a longer-term perspective on the dynamic between linear subscription revenue declines and D2C subscription revenue growth, seeking clarity on the key drivers for both sides of the equation.

Answer

CFO Naveen Chopra explained that linear revenue trends are primarily driven by ecosystem-wide pay-TV subscriber declines and deal renewals, with Q1's trend being indicative of the near future. He identified the clear drivers for streaming growth as continued subscriber additions, improved churn, and ARPU expansion, which are key to scaling revenue and improving profitability.

Benjamin Swinburne sought clarification on whether the 2025 profitability guidance was for the entire D2C segment or just domestic Paramount+. He also asked for more detail on the 2025 free cash flow outlook, particularly regarding restructuring costs.

Answer

Co-CEO Chris McCarthy clarified that the guidance is for domestic Paramount+ profitability in 2025, not the entire D2C segment. CFO Naveen Chopra explained that 2025 free cash flow is expected to grow year-over-year, driven by stable cash content spending, despite headwinds from the Super Bowl and political ads. He noted that cash restructuring payments would impact the conversion rate by about 10 percentage points.

Benjamin Swinburne asked about the key variables Paramount is considering for a potential DTC partnership and for an updated timeline on achieving overall D2C profitability beyond the 2025 domestic target.

Answer

Co-CEO Chris McCarthy stated that while Paramount+ has the momentum to remain a standalone service, the company will be opportunistic about partnerships that drive value. CFO Naveen Chopra reaffirmed the 2025 domestic profitability goal, noting that the international D2C business is tracking about 12 to 18 months behind the domestic business on its path to profitability.

Benjamin Swinburne asked about the U.S. media rights renewal process, specifically the strategic role of the F1 TV product, and whether to expect team payment leverage in the 2026-2030 Concorde Agreement.

Answer

Formula One CEO Stefano Domenicali confirmed they are in discussions with multiple partners and are open to how F1 TV is structured to maximize market penetration. Liberty Media CEO Derek Chang noted the sport's growth provides flexibility. Regarding the Concorde Agreement, Stefano Domenicali affirmed that they expect leverage on team payments in 2026 compared to 2025, with a simpler structure moving forward.

Benjamin Swinburne from Morgan Stanley asked about the U.S. media rights strategy, specifically how the F1 TV direct-to-consumer product fits into negotiations, and whether the 2026-2030 Concorde Agreement is expected to provide leverage on team payments.

Answer

Formula One CEO Stefano Domenicali confirmed active engagement with multiple partners for U.S. media rights and noted they are open to all possibilities for the valuable F1 TV asset. Liberty Media CEO Derek Chang emphasized the sport's strong growth in the U.S. provides strategic flexibility. Regarding the Concorde Agreement, Stefano Domenicali confirmed they expect leverage on team payments starting in 2026, followed by a more simplified structure beneficial to the entire F1 ecosystem.

Benjamin Swinburne inquired about Liberty Media's strategic priorities and M&A philosophy, and separately asked about the demand for Formula 1's U.S. broadcast rights and the role of F1 TV in negotiations.

Answer

CEO Derek Chang stated near-term priorities are closing the Dorna acquisition, structural simplification, and supporting F1's growth, while remaining opportunistic for future M&A. On media rights, both Chang and Formula One CEO Stefano Domenicali emphasized the strong interest from multiple parties, the productive relationship with ESPN, and the importance of balancing monetization with broad reach. They noted discussions are complex, involving more than just race broadcasts, and expect a resolution by mid-year.

Benjamin Swinburne of Morgan Stanley inquired about Liberty Media's strategic priorities and M&A philosophy, and separately asked about the demand for Formula One's U.S. broadcast rights and the role of F1 TV in negotiations.

Answer

CEO Derek Chang outlined near-term priorities including closing the Dorna acquisition, structural simplification, and supporting F1's growth, stating that future M&A would be opportunistic, focusing on premium IP. On media rights, both Chang and Formula One CEO Stefano Domenicali described the process as early but robust, emphasizing a constructive relationship with ESPN and strong interest from multiple parties. They highlighted that negotiations are complex, involving more than just race broadcasts, and that F1 TV is a key part of the value proposition.

Benjamin Swinburne asked about the long-term revenue growth drivers for the Sphere business, the potential mix of revenue in Abu Dhabi versus Las Vegas, and followed up with a question on the company's liquidity position to fund Sphere operations, particularly if MSG Networks is excluded.

Answer

Executive Chairman and CEO James Dolan projected that the Abu Dhabi content mix will be customized for its market and differ from Las Vegas. He identified operational efficiencies as a short-term growth driver and global expansion via a 'franchise model' as the largest long-term opportunity. EVP and CFO Robert Langer addressed liquidity, stating the company is comfortable with its position, holding approximately $400 million in cash at the Sphere segment and expecting to drive meaningful AOI to fund future investments.

Asked about the long-term revenue growth drivers for the Sphere business, potential differences in content mix between Las Vegas and future locations, and the company's liquidity and cash flow position for the Sphere segment.

Answer

The primary long-term growth driver is the expansion into a global network of Spheres, creating a franchise model where content costs are spread out. The content mix will be tailored to each market. The company is comfortable with its liquidity, with sufficient cash at the Sphere segment and optimism for generating operating income to fund future investments.

Benjamin Swinburne inquired about two topics: how potential NBA franchise expansion fees would impact the P&L, and the company's current appetite for selling a minority stake in its teams.

Answer

Victoria Mink, EVP, CFO and Treasurer, clarified that any potential NBA expansion fee would be divided among existing teams and would drop directly to the bottom line. Jamaal Lesane, Chief Operating Officer, added that while they see their teams as scarce assets and would not rule out a minority stake sale to unlock value, there is nothing concrete to report at this time.

Benjamin Swinburne asked about the P&L impact of a potential NBA expansion, specifically if fees would go to the bottom line, and also inquired about the company's appetite for selling a minority stake in its teams.

Answer

EVP, CFO and Treasurer Victoria Mink explained that any potential NBA expansion fee would be divided among existing teams and, based on precedent, would likely drop to the bottom line. Chief Operating Officer Jamaal Lesane added that while they would never rule out a minority stake sale given the teams' value, there is nothing concrete to report at this time.

Ben Swinburne from Morgan Stanley sought clarification on the drivers behind the Q4 gross margin outperformance and requested more detail on the expected gross margin cadence for the full year 2025.

Answer

CFO Christian Luiga attributed the Q4 beat primarily to content cost favorability. For 2025, he guided for full-year gross margin improvement, but at a more moderate pace than 2024. He noted that targeted investments in core offerings could create quarterly variability, but expects Q4 2025 margin to be higher than Q1 2025.

Benjamin Swinburne of Morgan Stanley inquired about the key factors driving the record 31.1% gross margin in Q3 and the outlook for future margin expansion.

Answer

CFO Christian Luiga attributed the Q3 gross margin beat to the strong performance of the marketplace program, efficiencies in streaming, delivery, and payment costs, and favorability from U.S. publishing rates. He noted this was a continuation of Q2's trend but declined to detail future drivers specifically.

Asked about the potential impact of a Republican DOJ on the Live Nation lawsuit, and for clarification on the full-year outlook for team payment leverage and the significance of the Las Vegas GP as a variable.

Answer

The executive declined to comment on the Live Nation lawsuit, stating the company's view won't change regardless of the administration. For team payments, they are sticking with the 'slight leverage' guidance from the previous quarter. The Las Vegas GP is a significant swing factor because its ticket sales are one of the few uncontracted, high-volatility revenue streams left in the year, but they remain optimistic.

Asked for perspective on recent competitive moves in telecom, like T-Mobile's fiber JVs, and their implications for Charter's valuation and competitive landscape. Also asked for an opinion on the potential magnitude of the upcoming AI-driven phone upgrade cycle.

Answer

Management views T-Mobile's fiber activity as a validation of Charter's fixed-line strategy, suggesting these moves are 'around the edges' and that Charter's combined offering is strong. Regarding the AI phone cycle, they expect a larger-than-usual upgrade cycle due to pent-up demand and buzz, even if market optimism is somewhat inflated.

Questioned the rationale for maintaining Charter's 4.5x leverage target despite market sentiment and asked whether the benefits of the Disney dispute outcome outweighed the negative business disruption.

Answer

Executives defended the 4.5x leverage target as appropriate after reviewing various scenarios and believe the stock's performance is related to broadband growth concerns, not leverage. They reiterated that the Disney deal was a necessary long-term strategic move to align with content partners for future over-the-top offerings.

Benjamin Swinburne of Morgan Stanley asked for perspective on the competitive telecom landscape, particularly T-Mobile's fiber JVs, and its impact on Charter's strategy and valuation. He also sought views on the magnitude of the anticipated AI-driven phone upgrade cycle.

Answer

Gregory Maffei, Liberty's President and CEO, viewed competitors' fiber moves as a validation of Charter's fixed-line strategy, seeing them as 'around the edges' rather than a major threat. Ronald Duncan, CEO of GCI, opined that while there is buzz around the AI phone cycle that will likely drive more upgrades than recent cycles, the level of optimism may be higher than merited.

Benjamin Swinburne asked about the possibility of a last-minute legislative extension for the ACP program and questioned whether Charter should prioritize deleveraging over share buybacks given the current interest rate environment.

Answer

Gregory Maffei, President and CEO, expressed limited optimism for an ACP extension, citing procedural hurdles despite bipartisan support. He confirmed that both Liberty Broadband and Charter are shifting focus towards debt reduction, with Charter aiming to move its leverage from the high end towards the midpoint of its 4.0x to 4.5x target range.

Ben Swinburne asked about the capital allocation trade-off between upgrading existing theaters and building new ones, and whether the company would consider accelerating its upgrade pace.

Answer

CFO David Ownby stated that Regal generates enough cash to pursue both strategies without having to choose between them. He confirmed the current pace of upgrading approximately 600 screens per year is optimal, as it balances capital deployment and operational disruption. He also described landlord contributions for these upgrades as an inexpensive source of financing with consistent economics.