John Hodulik

John Hodulik from UBS asked if wireless and convergence are lowering broadband churn and if the free line promotion is aiding new broadband connects. He also inquired about the competitive landscape in the business market and the sustainability of current business trends.

Answer

Dave Watson, CEO of Comcast, confirmed that adding wireless positively impacts broadband churn, and the free line plan is a longer-term bet for churn reduction and building relationships, noting the record 400,000 wireless net additions. He acknowledged increased competition in the business services market, particularly from fixed wireless, but highlighted the strength of their $10 billion and growing portfolio, leadership in SMB, and upside in mid-market and enterprise segments through advanced services and new mobile offerings with T-Mobile.

John Hodulik asked if there is evidence that wireless and convergence are lowering broadband churn, specifically inquiring about the impact of the free line promotion on new connects and long-term churn. He also asked about the competitive landscape and outlook for business services, particularly regarding fixed wireless and the sustainability of current solid trends.

Answer

Dave Watson (CEO, Comcast) confirmed that adding wireless to a customer relationship positively impacts churn, and the free line plan is a longer-term bet on churn reduction and building relationships, with early results showing a significant uptick in net additions. He acknowledged the competitive nature of business services, especially from fixed wireless, but highlighted Comcast Business's strong portfolio, mid-single-digit growth, high margins, and large addressable market. He emphasized the upside from expanding relationships and adding value through advanced services and mobile offerings, including new partnerships with T-Mobile for business services.

John Hodulik asked for details on competitive pressures in the business services market, the potential for mobile penetration in that segment, and how the recent tax savings might influence CapEx trends for both cable and parks.

Answer

David Watson, CEO of Connectivity & Platforms, acknowledged increased SMB competition but noted strong momentum in mid-market and enterprise. CFO Jason Armstrong stated the tax changes reinforce their strategy of aggressive infrastructure investment, including 1.2 million new passings annually. He added that parks CapEx will decline for a couple of years post-Epic before ramping up for the London project.

John Hodulik followed up on the business services market, asking about competitive pressures and mobile penetration potential, and also inquired how the $1 billion in cash tax savings might influence CapEx trends.

Answer

David Watson, CEO of Connectivity & Platforms, acknowledged increased SMB competition but noted strong momentum in mid-market and enterprise, with the new T-Mobile MVNO expected to accelerate mobile adoption. CFO & Treasurer Jason Armstrong explained the tax savings reinforce their strategy of aggressive infrastructure investment, including new passings and network upgrades. He also noted Parks CapEx will decline for a few years post-Epic before ramping for the London project.

John Hodulik questioned if the recent increase in churn could be attributed to a slowing macroeconomic environment, and asked for more detail on the Business Services segment, specifically if competitive pressure is concentrated in small business.

Answer

David Watson, President and CEO of Comcast Cable, identified a slight uptick in mobile substitution as a key competitive factor in churn, rather than macro weakness. In Business Services, he confirmed the pressure is most pronounced in the small business segment. However, he highlighted the company's strategy of adding more products to these relationships and the strong traction being gained in the mid-market and enterprise segments.

John Hodulik asked about the weaker broadband performance in December, seeking to understand if it was driven more by fiber, fixed wireless, or satellite competition. He also questioned if the historical trend of margin expansion in the Connectivity & Platforms segment can continue given the new, more aggressive wireless strategy.

Answer

CEO of Comcast Cable David Watson attributed the December performance to 'intensely competitive' pressure across all segments, particularly from fixed wireless and ongoing fiber overbuilds, and clarified that the impact from satellite has been 'de minimis.' CFO Jason Armstrong affirmed that they expect to continue expanding margins in the Connectivity & Platforms segment, driven by a favorable business mix shift and operational efficiencies. However, he noted the rate of expansion might be slightly lower in the coming year to accommodate strategic investments in wireless.

John Hodulik asked about the impact of new fiber competition on broadband ARPU and pricing power. He also inquired how a potential spin-off of the cable networks might change the growth rate profile of the remaining Comcast assets.

Answer

Executive Vice President David Watson explained that while new fiber entrants impact market share initially, the competitive environment eventually stabilizes, and ARPU levels in mature fiber markets are not different from non-fiber markets. President Michael Cavanagh addressed the spin-off question by emphasizing that the company's transformation is already underway, with its six key growth drivers, representing over half of revenue, growing at 9% in the quarter.

John Hodulik of UBS asked about CEO Dan Schulman's vision for Verizon, his priorities for the first 100 days, and specific strategies to improve consumer subscriber volumes.

Answer

CEO Dan Schulman outlined a three-pillar vision: shifting to customer-centricity to delight customers and reduce churn, driving sustainable revenue and accelerated adjusted EPS growth through cost efficiencies, and a full review of CapEx and capital allocation, including portfolio rationalization and potential capital returns. He emphasized winning responsibly through retention and thoughtful marketing.

John Hodulik of UBS Group AG inquired about the drivers behind the deceleration in postpaid ARPA growth and the expected slowdown in upgrade rates for the full year after a strong first half.

Answer

Chairman and CEO Hans Vestberg stated that Verizon has multiple levers for ARPA growth, including My Plan step-ups and perks, and sees a good run rate. He explained the first-half upgrade strength was driven by specific incentives. EVP & CFO Tony Skiadas noted that the company successfully absorbed the higher upgrade costs in Q2 while still delivering strong EBITDA and cash flow.

John Hodulik inquired about the potential impact of tariffs on handsets and telecom equipment, and also asked for an outlook on consumer churn improvement.

Answer

CEO Hans Vestberg stated that only a small portion of Verizon's CapEx is exposed to tariffs and that the company would not absorb significant tariff-related increases on handsets, which would ultimately affect consumers. Consumer Group CEO Sowmyanarayan Sampath explained that the recent spike in churn was transitory, driven by specific pricing actions, and is expected to normalize by the second half of the year, aided by the new Verizon Value Guarantee, C-Band expansion, and convergence benefits.

John Hodulik from UBS inquired about the potential market size of the new AI Connect initiative and the key drivers behind Verizon's strong Q4 momentum in wireless and broadband, asking if that momentum has carried into early 2025.

Answer

CEO Hans Vestberg attributed the momentum to structural changes, new product resonance (myPlan), and network improvements from C-band deployment. Consumer Group CEO Sowmyanarayan Sampath added that they expect higher net adds in 2025, driven by a strong value proposition, improved sales execution, and successful targeting of Tier 1 markets and the Latino segment. Business Group CEO Kyle Malady estimated the addressable market for AI Connect at over $40 billion, with a current funnel exceeding $1 billion from existing services alone.

John Hodulik inquired about the potential market size of the new AI Connect initiative and the key drivers behind the strong Q4 momentum in wireless and broadband, asking if that momentum has carried into early 2025.

Answer

CEO Hans Vestberg attributed the momentum to structural changes, new products, and network improvements. Consumer Group CEO Sowmyanarayan Sampath added that the myPlan value proposition and success in new segments are driving growth, with expectations for higher net adds in 2025. Business Group CEO Kyle Malady estimated the AI Connect addressable market at over $40 billion, with a current sales funnel exceeding $1 billion.

John Hodulik asked about AT&T's preparedness for potentially higher promotional activity in Q4, considering recent leadership changes at competitors, and the behavior of customer cohorts nearing the end of their device financing periods. He also questioned whether AT&T expects continued ARPU pressure in both wireless and broadband, given the focus on converged services.

Answer

Chairman and CEO John Stankey stated AT&T is well-positioned for a competitive market, emphasizing their strategy to focus on converged customers to drive down churn, increase profitability, and deepen customer relationships. He expressed confidence in AT&T's ability to adjust to competitive shifts. CFO Pascal Desroches clarified that ARPU trends reflect a deliberate strategy to target underpenetrated segments and drive convergence, which may initially impact ARPU but aims to maximize overall service revenue growth and long-term value. He noted a pricing action effective in December expected to contribute to Q4 service revenue growth.

John Hodulik asked about AT&T's positioning for potentially higher promotional activity in the fourth quarter, considering recent changes at Verizon and T-Mobile, and inquired about customer cohorts coming off plan. He also asked CFO Pascal Desroches about expected continued ARPU pressure in both wireless and broadband, given the focus on growth from converged services.

Answer

Chairman and CEO John Stankey affirmed AT&T is well-positioned for a competitive market, focusing on converged customers to reduce churn, increase profitability, and deepen relationships. He expressed confidence in AT&T's ability to adapt to competitor tactics. Stankey described ARPU trends as a 'feature, not a bug,' reflecting a strategy to target underpenetrated segments and drive convergence with value offers, expecting greater customer value over time. CFO Pascal Desroches added that targeting underpenetrated segments, even with lower ARPUs, is part of maximizing service revenue growth, and a Q4 pricing action will contribute to service revenue.

John Hodulik of UBS Group AG inquired about the drivers of the 17 basis point increase in wireless phone churn, asking if a similar increase is expected in the second half of the year. He also asked for quantification of the savings from the initial filing to decommission 10% of copper wire centers.

Answer

Senior EVP & CFO Pascal Desroches addressed the questions, attributing the higher churn to a larger cohort of customers ending device financing periods and increased market activity, some of which may have been pulled forward. He stated that for planning purposes, AT&T assumes a competitive environment will continue in the second half. Regarding cost savings, Desroches noted that the benefits from legacy network transformation are already being realized and are contributing to lower operating expenses, a trend he expects to continue as more copper lines are retired.

John Hodulik of UBS asked to quantify the margin impact from higher Q2 device upgrades and questioned if the improved Business Wireline EBITDA decline of approximately 5% (adjusted) represents a new sustainable trend.

Answer

CFO Pascal Desroches indicated that Q2 upgrade levels could be similar to Q1, potentially as a pull-forward ahead of tariffs. For Business Wireline, he cautioned against extrapolating the Q1 performance, noting it was aided by a ~$45 million non-recurring vendor settlement and temporary benefits from price increases. He stated it was too early to change the full-year outlook for the segment.

John Hodulik inquired about potential direct cost savings in 2025 from the regulatory filing to discontinue legacy products and the expected steps for decommissioning the copper infrastructure. He also asked for views on the likelihood of tax reform and how it might accelerate capital expenditures.

Answer

CEO John Stankey explained that cost savings from the legacy network transition are already factored into the multi-year guidance and will be gradual, not a step-function change in 2025. He noted the new administration provides a 'tailwind' for this process. Regarding tax reform, Stankey is optimistic and stated that if incentives are extended, AT&T would likely accelerate its fiber build, which could be ramped up over a 12-18 month period.

John Hodulik asked about the sustainability of subscription revenue growth and requested more detail on advertising market trends, including pricing for linear versus CTV.

Answer

EVP & CFO Patrick O’Connell stated that streaming revenue is accelerating due to successful price increases and subscriber growth, with minimal impact on churn. CEO Kristin Dolan added that streaming will be the largest revenue component in 2025. CCO Kim Kelleher highlighted strong upfront performance, with a 25%+ increase in digital commitments, and noted the value of addressable advertising.

John Hodulik questioned the underlying drivers of HBO Max's ARPU dilution and the product's pricing power. He also asked for the expected financial impact of the NBA contract loss in the fourth quarter.

Answer

President & CEO David Zaslav stated the current strategy prioritizes establishing HBO Max's quality reputation over immediate price hikes, which creates future pricing power. Global Streaming CEO JB Perrette added that a more consistent content slate will support this. CFO Gunnar Wiedenfels quantified the NBA impact as a roughly $100 million sports cost benefit in Q4, with a net benefit of hundreds of millions in 2026.

John Hodulik asked about the drivers of DTC ARPU dilution and the pricing power of HBO Max. He also inquired about the financial impact of losing the NBA contract starting in the fourth quarter.

Answer

President & CEO David Zaslav and Global Streaming CEO JB Perrette emphasized that building a premium brand was the priority, which now provides future pricing power as the content slate strengthens. CFO Gunnar Wiedenfels quantified the NBA exit impact, projecting a ~$100 million sports cost benefit in Q4 and a net EBITDA benefit of 'hundreds of millions of dollars' in 2026.

John Hodulik asked for management's perspective on skinny sports bundles, their potential for meaningful consumer adoption, and their possible impact on cord-cutting and affiliate trends.

Answer

CEO David Zaslav opined that while aggregating sports on a modern platform is compelling, the value proposition is key. He believes that unless skinny bundles are significantly cheaper, consumers will continue to opt for larger, more comprehensive bundles. He sees the ultimate industry trend as aggregation behind a few global players to solve the current fragmented and poor consumer experience, which will provide a 'wind at the back' of the industry.

John Hodulik asked if the launch of the ESPN D2C platform, particularly with its attractive bundle pricing, could accelerate overall D2C growth in terms of subscribers or engagement.

Answer

CEO Bob Iger responded 'absolutely,' stating the $29.99 Trio bundle is an 'incredible bargain' expected to grow the subscriber base and increase engagement, which in turn reduces churn. He also highlighted the ability to bundle NFL+ Premium with Red Zone as another tool to boost engagement and lower churn.

John Hodulik requested an update on Disney's cost-cutting initiatives, the reason for the reduction in the content budget from $24 billion to $23 billion, and the expected cadence of earnings growth for the year following a strong first quarter.

Answer

CFO Hugh Johnston emphasized that cost-cutting is a continuous, daily process of identifying efficiencies rather than a one-time event. Regarding guidance, he acknowledged that the strong Q1 performance increases confidence for the full year, but stated it would be premature to raise the outlook, while noting the management team is not afraid to overdeliver if momentum continues.

John Hodulik asked if Disney might revisit a spinoff of its linear networks, similar to Comcast's plans, and whether a change in administration alters its view on M&A. He also requested an update on the expected impact of Universal's Epic Universe on the Parks business.

Answer

CEO Robert Iger asserted that Disney has already consolidated through its 21st Century Fox acquisition and does not need more assets. CFO Hugh Johnston added that his analysis showed no value-creating opportunity in divestitures due to likely sale prices and operational friction. Regarding Epic Universe, Johnston confirmed it was modeled into their outlook, noting that early bookings for next summer are positive and new park openings in Florida have historically been beneficial.

John Hodulik asked for a 2026 outlook on cash tax savings following recent legislation, the planned use of that cash, and for more detail on broadband performance drivers, specifically the impact of non-pay churn.

Answer

CFO Jessica Fischer estimated 2026 tax savings would be similar to or slightly larger than 2025's, potentially adding about $10 per share in FCF annually for six years. President & CEO Chris Winfrey clarified that while non-pay churn increased year-over-year due to the ACP wind-down, it remains at historically low levels, slightly offsetting gains from higher sales and lower voluntary churn.

John Hodulik inquired about the rollout status of Charter's 'Seamless Entertainment' product, including its timing, features, and the expected impact on video and broadband key performance indicators (KPIs).

Answer

CEO Chris Winfrey detailed that most direct-to-consumer apps are now integrated for TV Select customers, with a full digital storefront launching later in the year. He noted that recent video KPI improvements were driven by new pricing and packaging, not yet the full Seamless Entertainment launch, which he views as future 'option value' that should also benefit broadband trends over time.

John Hodulik inquired about the margin implications of the new pricing and packaging and the outlook for EBITDA trends into 2025, given the recent acceleration.

Answer

CFO Jessica Fischer stated the focus is on absolute cash flow per customer, not margin percentage, and she is confident the new packaging will drive higher cash flow. For 2025 EBITDA, she noted the company will target growth but faces headwinds from 2024 internet losses and a non-political advertising year. President and CEO Christopher Winfrey added that triple-play bundles have the highest EBITDA dollars and lowest churn, and the new strategy leverages this dynamic to improve long-term financial outcomes.

John Hodulik of UBS Group AG inquired about the current competitive landscape, churn trends for the second half of 2025, and the specifics of the 100,000 fiber net additions guidance.

Answer

COO Srini Gopalan described the market as dynamic, which T-Mobile thrives in as a natural share-taker, emphasizing their value proposition over promotions. CFO Peter Osvaldik noted that while Q2 churn was elevated as expected due to rate plan changes, it is anticipated to decline sequentially in Q3. President of Marketing, Strategy & Products Mike Katz clarified the 100,000 fiber net adds are for the full year, sourced from JVs and wholesale markets, and that the company remains open to further inorganic growth.

John Hodulik of UBS Group AG inquired about the current competitive market dynamics, subscriber growth drivers amid slightly higher churn, and the outlook for the second half. He also asked for more details on the 100,000 fiber net additions guidance for the year.

Answer

COO Srini Gopalan stated that T-Mobile thrives in dynamic, competitive markets by leveraging its superior value proposition (network, value, experience) rather than just promotions. EVP & CFO Peter Osvaldik noted that Q2 churn was expectedly higher due to rate plan optimizations but should decline sequentially in Q3. President of Marketing, Strategy & Products Mike Katz clarified the 100,000 fiber net adds are for the full year, combining JVs and wholesale markets, while President & CEO Mike Sievert praised the unified T-Fiber platform's flexibility.

John Hodulik of UBS asked if an increased industry switching pool still benefits T-Mobile, questioned if the industry has pushed pricing too far, and inquired about any emerging macroeconomic pressures in the prepaid or wholesale markets.

Answer

CEO Mike Sievert affirmed that a larger switching pool remains an opportunity, as evidenced by record Q1 results. Jon Freier, President of the Consumer Group, reported stability in the prepaid business with no signs of macro pressure. CFO Peter Osvaldik noted that while expected declines from DISH and TracPhone impact wholesale, the underlying business is growing, and Q1 likely marked the low point for the segment's revenue.

John Hodulik inquired about the drivers behind the strong 5% service revenue growth guidance, asking if it stemmed from faster postpaid growth or a smaller decline in wholesale. He also questioned the confidence in the postpaid subscriber guide amid a slowing industry, and whether it's driven by gross adds or improved churn.

Answer

CFO Peter Osvaldik clarified that the wholesale revenue decline is slowing as anticipated, and the strong service revenue outlook is a function of both robust postpaid customer growth and continued ARPA growth of around 3%. CEO G. Sievert added that subscriber outperformance is broad-based, with share gains in top 100 markets, rural areas, and T-Mobile for Business, all fueled by the company's value proposition of having the best network and experience.

John Hodulik from UBS asked about T-Mobile's spectrum strategy, including recent 3.45 GHz trades, potential acquisitions, the 800 MHz status, and the quantifiable upside from its digitalization initiatives.

Answer

President and CEO G. Sievert explained that digitalization is a core part of their value creation plan, targeting a $10B core adjusted EBITDA increase by 2027, but declined to unpack specific cost savings. Executive Ulf Ewaldsson stated that 3.45 GHz spectrum is not part of their current plan, and the 800 MHz auction's conclusion without a qualifying bid now provides new optionality for deployment or monetization.

John Hodulik inquired about advertising trends at FOX News, asking for an update on demand from brand advertisers and whether there has been a quantifiable shift from direct response (DR) to brand advertising.

Answer

Executive Chair and CEO Lachlan Murdoch highlighted that FOX News has attracted over 200 new advertisers since the election, who are continuing to advertise, indicating sustained value. While not providing specific pricing differences, he noted that direct response advertising on FOX News was up over 30% in the quarter, and scatter pricing was up over 50% versus upfront rates, demonstrating strong overall momentum.

John Hodulik inquired about Fox's forthcoming Direct-to-Consumer (D2C) service, asking for details on timing, content, rights, and costs. He also asked about the drivers behind the recent acceleration in affiliate revenue.

Answer

Executive Chair and CEO Lachlan Murdoch explained the D2C service will target cord-cutters, utilize existing content without incremental rights costs, and is planned for launch by the end of the calendar year. CFO Steven Tomsic added that affiliate revenue strength is due to improving subscriber attrition, a focused channel portfolio that distributors want, and a distribution strategy that prioritizes the traditional bundle.

John Hodulik inquired about the advertising environment post-election, current direct response pricing trends, and whether Fox News's strong ratings momentum could be sustained regardless of the election's outcome.

Answer

Executive Chair and CEO Lachlan Murdoch characterized the advertising marketplace as 'very healthy,' citing a record World Series, a sold-out Super Bowl, and strong news ratings. He highlighted that direct response pricing was up significantly in Q1 and 'almost double significantly' in Q2. He expressed confidence that this health would continue post-election due to the strength of Fox's specific market positions.

John Hodulik inquired about the advertising market, asking for a breakdown of pricing trends between sports and entertainment, the outlook for cable advertising given strong ratings, and the expected scale of political ad spending.

Answer

Executive Chair and CEO Lachlan Murdoch reported a very strong upfront that exceeded expectations, with year-over-year growth in both linear and digital commitments and overall portfolio pricing. He noted particular strength in sports and a significant recovery in the direct response marketplace for Fox News. Regarding political advertising, Murdoch anticipates a record cycle, excluding the prior Georgia runoff, with spending accelerating as the election map expands.