Comcast's 10-Q: revenue down 0.2% over twelve months

Comcast’s latest filing reveals a widening gap between reported earnings and cash generation. Revenue over the twelve months to Q3 2026 stood at $123.00 billion, a 0.2% decline from the prior year. This growth rate represents a 0.8 percentage point drop from the rate recorded a quarter earlier.

What stands out

Reported profit and cash are moving at different speeds. Net income fell 49.9% over the year, while free cash flow declined by 6.2%. The divergence highlights that the drop in bottom-line earnings outpaced the reduction in cash available to shareholders.

The trailing operating margin was 14.7%, down 3.3 percentage points from a year earlier. This decline occurred alongside a trailing net margin of 9.2%. Net income over the twelve months totaled $11.32 billion, reflecting a 49.9% drop on the year before.

Cash flow

Cash generation remained relatively stable despite the profit decline. Operating cash flow over the twelve months was $31.73 billion, down 3.5% on the year before. Capital spending amounted to $12.06 billion, representing 9.8% of revenue. Consequently, free cash flow, defined as operating cash flow less capital spending, was $19.67 billion, down 6.2% on the year before. The free-cash-flow margin stood at 16.0% of revenue, a 1.0 percentage point decrease from a year earlier. Meanwhile, the average diluted share count fell 4.4% over the year, slightly offsetting the decline in total free cash flow on a per-share basis.

Today’s free-cash-flow margin of 16.0% is higher than 75% of the company’s own past quarterly readings, which have ranged from 10.5% to 17.7%. In contrast, today’s operating margin of 14.7% is higher than only 7% of the company’s own past quarterly readings, which have ranged from 11.6% to 22.0%. The twelve-month revenue growth rate of −0.2% is higher than 8% of the company’s own past quarterly readings, which have ranged from −4.9% to 47.2%.

What it means for value

Our model shows high sensitivity to growth assumptions. A 5 percentage point lower growth rate would lower the value by 31.8%. Conversely, a 5 percentage point higher growth rate would raise it by 41.9%. A 1 percentage point lower free-cash-flow margin would lower the value by 6.8%. These figures demonstrate that small shifts in growth or margin assumptions have a disproportionate impact on the calculated value.

What to watch

The next filing will show whether the divergence between net income and free cash flow persists. Investors should look for changes in the operating margin to see if cost pressures continue to compress profitability. The trend in capital spending relative to revenue will also determine if the free-cash-flow margin stabilizes or continues to decline.