Comcast (CMCSA) 2025 — Grade F: $98.9B Debt, Cash Covers Only 10%

Grade: F — Major Red Flags

Framework: Schilit *Financial Shenanigans* + Beneish M-Score + forensic accounting principles

Data: SEC EDGAR 10-K (Filed 2026-02-06) + Yahoo Finance

Auditor: Deloitte & Touche LLP — Clean opinion (1 critical audit matter: Residential Connectivity & Platforms revenue)

One-line verdict: Comcast's F grade reflects the structural reality of a media and telecom conglomerate carrying $98.9B in debt with only $9.5B in cash (10% coverage), and $155.6B in goodwill and intangibles at 161% of equity. These are not earnings manipulation signals — the M-Score at -2.72 passes cleanly, and operating cash flow of $33.6B is robust. The F grade is a balance sheet structure issue driven by two decades of media acquisitions (NBCUniversal, Sky) layered onto a capital-intensive cable business. The January 2026 Versant spin-off of cable TV networks adds a transformational element that investors must now evaluate separately.

The Media and Connectivity Conglomerate

Comcast is a global media and technology company organized into two primary businesses: Connectivity & Platforms (cable, broadband, wireless) and Content & Experiences (NBCUniversal media, studios, theme parks). The 10-K covers the fiscal year ended December 31, 2025 — the Versant spin-off occurred on January 2, 2026, so FY2025 results include all cable networks.

From the 10-K: "We are a global media and technology company with two primary businesses: Connectivity & Platforms and Content & Experiences."

Revenue was flat at $123.7B, but net income surged 23% to $20.0B. The disconnect between flat revenue and rising net income is explained by: (1) "Investment and other income (loss), net" swinging from $(490M) in FY2024 to $9,503M in FY2025 — a $10B improvement likely driven by investment gains; and (2) improved cost management. Operating income actually declined 11%, from $23.3B to $20.7B, due to higher depreciation and amortization ($16.2B vs $14.8B) and increased operating expenses.

Segment Performance

From the 10-K:

Residential Connectivity & Platforms: Revenue decreased. Domestic broadband customers declined by 711,000 to 31.3 million. Domestic video customers declined by 1.3 million to 11.3 million. However, domestic wireless lines increased by 1.5 million to 9.3 million. Adjusted EBITDA margin decreased from 38.2% to 37.7%.

Business Services Connectivity: Revenue increased, driven by enterprise solutions and small business growth. Adjusted EBITDA margin decreased from 56.7% to 55.9%.

Media (NBCUniversal): Total revenue of $27.1B declined 3.8% from $28.1B, primarily due to the Paris Olympics in FY2024. Excluding the $1.9B incremental Olympic revenue, media revenue actually increased 3.2%. Peacock generated $5.4B in revenue (vs $4.9B prior year) with 44 million paid subscribers (vs 36 million).

Theme Parks: Revenue increased, driven by the opening of Epic Universe in Orlando in May 2025.

The Versant Spin-Off: A Structural Shift

The most significant post-balance-sheet event is the Versant separation completed January 2, 2026.

From the 10-K (Note 16 — Subsequent Events): "On January 2, 2026, we completed the previously announced separation of Versant into an independent, publicly traded company with its Class A common stock listed on The Nasdaq Stock Market LLC under the ticker symbol VSNT."

Versant comprises: "certain of our former cable television networks, including MS NOW (formerly MSNBC), CNBC, USA Network, Golf Channel, E!, SYFY and Oxygen, and complementary digital platforms, including GolfNow, Fandango, Rotten Tomatoes and SportsEngine."

The separation was structured as a tax-free spin-off: "each Comcast shareholder received 1 share of Versant common stock for every 25 shares of Comcast common stock." Versant distributed $2.25B in cash to Comcast, which Comcast used to redeem its 3.15% Notes due 2026 (~$2.1B) and 5.35% Notes due 2027 (~$650M).

This means FY2026 financials will look materially different — the cable networks' revenue and costs will be removed, and approximately $2.75B in debt will have been retired.

The Debt Mountain

Total debt of $98.9B ($6.0B current + $93.0B non-current) against $9.5B cash. The franchise rights of $59.4B are indefinite-lived intangible assets representing the value of cable franchise agreements from prior acquisitions. These have not been impaired.

Debt structure from the 10-K: "Proceeds from borrowings" of $3.5B and "Repurchases and repayments of debt" of $5.7B in FY2025 — net debt reduction of $2.2B. Additionally, a $5.2B "Repayment of collateralized obligation" occurred.

The company spent $7.2B on share repurchases ("Repurchased a total of 205 million shares of our Class A common stock for $6.8 billion") and $4.9B on dividends.

Cash Flow: The Engine That Services Everything

CFFO of $33.6B is enormous — up 22% from FY2024. Free cash flow of $19.2B (after CapEx of $11.8B and intangible purchases of $2.7B) is the highest in three years. The CFFO/NI ratio of 1.68 confirms that earnings are well-backed by cash. The non-cash adjustment of $16.2B in D&A is a major reconciling item between net income and cash flow.

The company's capital allocation in FY2025: $11.8B CapEx + $2.7B intangible purchases + $7.2B buybacks + $4.9B dividends + $5.7B debt repayment + $5.2B collateralized obligation = ~$37.6B in total cash deployment.

The 18-Point Screening

Revenue Quality

All three revenue quality checks pass. DSO of 41 days is low and stable. CFFO growth of 21.6% on flat revenue is a strong positive signal — the company is extracting more cash from the same revenue base.

Deloitte flagged Residential Connectivity & Platforms revenue as a critical audit matter: "The processing and recording of revenue are reliant upon multiple information technology (IT) systems... subjective auditor judgment was involved in evaluating the sufficiency of audit evidence over revenue recognition for bundled services." This reflects IT system complexity in billing millions of subscribers, not accounting judgment risk.

Expense Quality

All expense quality checks pass. SG&A/Gross Profit of 10.0% is exceptionally low — reflecting the operating leverage of a mature infrastructure business. Gross margin improved 1.7pp, driven by lower programming and production costs (down from $37.0B to $35.0B) as the Paris Olympics costs were not repeated.

Cash Flow Quality

C4: This is the first of two fails. $9.5B cash against $98.9B debt gives only 10% coverage. However, context matters:

The risk is not inability to service debt — it is the absolute magnitude that limits strategic flexibility.

Balance Sheet

D1: $155.6B in goodwill + intangibles at 161% of equity. The breakdown:

The franchise rights represent the value of cable TV distribution agreements — these are unique to cable operators and represent real, cash-generating assets. The goodwill from the NBCUniversal acquisition ($30B+ in 2011) and Sky acquisition ($40B in 2018) forms the bulk.

From the 10-K goodwill table, the breakdown by segment:

M&A Risk

Goodwill + intangibles were essentially flat — no major acquisitions in FY2025. The goodwill increase from $58.2B to $61.5B reflects small acquisitions ($1.1B) and currency translation ($2.1B).

Beneish M-Score

The M-Score of -2.72 is comfortably in the safe zone. Revenue was flat (SGI = 1.0), the TATA (total accruals to total assets) of -0.05 is healthy, and the LVGI (leverage index) of 0.923 indicates declining leverage. No component suggests manipulation.

Key Risks from Item 1A

1. Broadband competition is intensifying. The 10-K warns: "Connectivity & Platforms broadband services compete primarily against wireline telecommunications companies, including many that are increasing deployment of fiber-based networks; wireless telecommunications companies offering internet services (using a variety of wireless technologies, including 5G fixed wireless networks)." Domestic broadband customers declined 711,000 in FY2025.

2. Cord-cutting continues. Domestic video customers fell 1.3 million to 11.3 million. Competition from DTC streaming services has "further intensified as certain DTC streaming service providers have commissioned, and may continue to commission, high-cost programming." The Versant spin-off is partly a response to this structural decline.

3. Versant separation execution risk. The 10-K acknowledges that the separated business "was not historically operated as a distinct business unit or division" — meaning untangling operations is complex. "There are no assurances that we will achieve the estimated cost savings goals."

4. Theme park capital intensity. Epic Universe opened in May 2025, with ongoing investments in "Universal Horror Unleashed" (Las Vegas), "Universal Kids Resort" (Texas), and a "Universal theme park and resort in the United Kingdom with a projected opening date in 2031." These are multi-billion dollar bets.

5. Peacock continues to lose money. "Peacock generated revenue and costs and expenses of $5.4 billion and $6.5 billion in 2025, respectively" — a $1.1B operating loss, improved from $1.8B in FY2024. The path to profitability remains uncertain.

Altman Z-Score and F-Score

The Z-Score of 2.03 places Comcast in the grey zone, reflecting the high debt load and massive intangible assets. For a regulated utility-like infrastructure business with $33.6B in CFFO, the Z-Score understates financial stability. The F-Score fraud probability of 0.44% is low.

Summary

Grade: F. The balance sheet reflects two decades of mega-acquisitions, but the operating cash flow engine is powerful.

Comcast's two fails are both structural, not indicative of earnings manipulation:

The strong points are numerous: M-Score at -2.72, CFFO/NI at 1.68, $19.2B in free cash flow, improving gross margins, SG&A/Gross Profit at 10%, and zero watch items on revenue or expense quality.

The Versant spin-off on January 2, 2026 will reshape the company — removing declining cable networks and their associated goodwill while retaining the higher-growth broadband, wireless, theme parks, and Peacock streaming businesses. FY2026 will tell a very different story. Investors should re-evaluate after the separation's financial impact becomes visible.

**Disclaimer**: This report is based on Comcast's FY2025 10-K (SEC EDGAR) and public financial data. This is NOT investment advice.

Data: SEC EDGAR 10-K (Filed 2026-02-06) + Yahoo Finance

Auditor: Deloitte & Touche LLP (Unqualified opinion, 1 critical audit matter)