Great. Well, good morning, everybody. Welcome to the Comcast Fireside Chat at the Goldman Sachs Communacopia and Technology Conference. My name is Mike Ng. I cover media cable telco here at the firm, and it's my privilege to introduce Jason Armstrong, who's the Chief Financial Officer at Comcast. We have about 35 minutes for today's presentation, but first and foremost, thank you so much for being here, Jason.
Mike, thanks for having me.
To start off, Comcast recently announced plans to spin off NBCUniversal and Sky from connectivity and technology. Could you talk a little bit about what drove that decision? How might the strategy at each entity differ after the separation?
Yeah. Well, thanks, Mike. Well, it's great to be here. It's a little bit of a homecoming. I used to be in your seat for several years and understand the amount of work that goes into this conference. So thank you, thank Goldman for hosting this. Thanks for inviting us to come present. You're right. It's been a busy year at Comcast, in particular, a busy summer. We announced late June an intention to separate into two different businesses, and we've spent a decade plus building two strong businesses. More recently, as you look at sort of the competitive dynamics, the end markets, strategic positioning, investment requirements, there's a little bit of a divergence in terms of what these two businesses are focused on, and so decision to separate them.
I think, along with that decision, there are certainly opportunities on the other side, but let me just rewind the clock what went into that decision with us saying we got to answer several questions on the viability of these companies as standalone businesses. First was, could we put leadership teams in place? I think we have answered that question already. Mike Cavanagh, Michael Angelakis in position to run the two businesses. I have had the pleasure of knowing both of them for a long time. Michael Angelakis hired me way back when from Goldman, 12 years ago at Comcast. He was the CFO and vice chairman at the time, deep operating background on the cable side, always been an infrastructure guy. Then had the privilege of working with Mike Cavanagh for over a decade.
Right.
Deep background at JP Morgan, CFO background. In the roles that they are going to play in the businesses. NBC, Mike Cavanagh has spent the last period of time as president, co-CEO of Comcast, and really has kind of been running NBC for the last three years, so very natural transition into that role. Michael Angelakis, a long period of time at Comcast. Before that, Providence Equity, always an infrastructure bent to his investing style, so an operator but with an investor lens. He spent the last several years in private equity as well. So really interesting lens to bring into the business, but deep operating experience on the cable side. So that is leadership. If you look at the top level, and then we have rounded out the teams around those two, then you get into how well-positioned are these businesses.
If you look at the connectivity and technology side, as you mentioned, we are a scale leader in broadband. We are a challenger in wireless, fastest growing scaled wireless company with a long ways to go. We are the only business services company at scale that is growing with a massive amount of room to go, which I am sure we will talk about in enterprise, which we are excited about. Then if you shift over to the content side of the business, and you look at the strength of the portfolio there, depth of IP, depth in the experiences segment. You step back and say you got a top three studio. You got a top two global experiences business. You have a streaming business that is mostly domestic-focused, but has now made its way to profitability, and the future is bright.
That was an important milestone, and so it sets both businesses up well. Next question we had to answer was as we separate balance sheets, could you separate them and have strong characteristics around each side? Which I think we will easily check that box. Our intention is both companies will have strong investment-grade balance sheets. Now it is about the execution phase of that. With the leadership teams in place, we are off and running, building all the things that we have to put in place to separate. Obviously, we have given a target of middle of next year, and do not see any issues with that. We are off and running towards it.
Great. That's a fantastic overview. I'm sure we're going to hit all those topics in our session here. To start off, let's talk about broadband competition. Cable broadband is certainly seeing some competition at the high end from fiber, on the value side from fixed wireless. You have satellite and Starlink becoming a more meaningful part of the market. I was wondering if you could just characterize the competitive dynamics in each of those segments and talk a little bit about what Comcast is doing to strengthen its position.
Yeah. I think, no doubt, it's a competitive environment. I think you're hearing that from everybody. It's competitive in broadband. It's competitive across convergence as well. As we step back and look at broadband, we're in the fortunate position of we're one of two wires into the home. Our long-term view, despite competitive intensity right now, has been and continues to be that a wire wins, right? We think there'd be two wires in the vast majority of homes, but wired technologies win. If you think about the ability to increase speeds over time, if you think about lowest latency, if you think about lowest marginal cost to upgrade, all those sort of bring you back to you want a wire in the home. Saying that, fixed wireless has emerged as a new competitor. They are several years in to taking share.
Wireless companies have all devoted a set amount of capacity to say, we've got excess capacity. How do we soak up that capacity? Let's go put some in the fixed wireless market. That continues. I think you're seeing around 1 million subs a quarter or so if you add up the totality of fixed wireless. I think the leadership position and the composition within that's changing a little bit. You're seeing a couple decelerate, but then one is accelerating, so the total picture still looks the same. But every one of those companies is in search of a wire into the home and would rather put traffic across a wire than they would fixed wireless. They're telling you that by their actions.
Right.
Right. Long term, it sort of validates the strategy for us around wire into the home. But for now, it's competitive, and so fixed wireless continues to be a pressure on subscriber additions. That's no different from the past several years. Satellite looms out there as a potential threat. Would reiterate what we said on the second quarter call, not really seeing it yet, but there's no complacency around it. I think we'll see it over time and in particular in rural and maybe deep suburban markets, it may be a better option as a competitor than we've faced historically. So that's something we're bracing for. Fiber, certainly not the last category. Maybe it should've been the first. But that's the long-term competitor in our view.
If you look at fiber making its way into our markets, historically we would see overbuild of 2%-3% per year. That's accelerated in the last couple of years. It looks more like 4% or 5% at this point. That's nothing new. I think that's well known probably to this group. You've seen a lot of fiber competition, a lot of funding into fiber, and companies really accelerating that. I think one of the things that is new, we mentioned this on the second quarter call, that we were starting to see irrational competition. It popped up a little bit in the second quarter. I would tell you it's continued into the third quarter. So when we see fiber pricing, standalone fiber pricing, in the $30-$40 range for a gig, when we say irrational, that's what we mean by irrational.
That to us is not a rational price point. When a company like that has to sit in front of this room and say $1,500 to go build out a household and $2,000 rural markets, substantially more than that, and the economic case for that is built on ARPU of this and penetration of this, $30-$40 as a starting point on a gig product, which is your flagship product and higher speed than fixed wireless, is not a rational price point, right? As we look at it, we think we've been incredibly rational in our approach to the market. We think as you look at broadband and wireless and think about the converged opportunity over time, our entry into broadband, we got lucky, quite frankly.
We, for 60 years, had plant that was allocated to video and coax cable into a household and could naturally transition that plant from video into broadband and do it in a high capacity way. So we're off and running obviously on that. We have been for 20+ years. But more recently, taking that plant to multi-gig symmetrical has been the strategy. But that is a several hundred dollars per household transition. Copper to fiber is a potentially thousands of dollar transition. So point that out because when you see pricing the way we've seen pricing, you'd really question, I think, returns, especially on a standalone basis. So if you look at that, our intention and our goal and what we think we'll do this year is on a year-over-year basis, we do think a full year we'll improve our broadband subscriber losses.
I think quarters are going to look different within that. This particular quarter I don't think we'll improve year- over- year. So the pressure we've seen, in particular with irrational fiber pricing, is going to cause that. But as we step back, incredible hand to play. I know we'll get into wireless. We're incredibly bullish on wireless and sort of the hand we have to play there.
Great. If I could just follow up on the comment as it relates to competitive broadband pricing. What do you think ultimately happens there? Does the industry return to a more rational pricing environment over some period of time? It was interesting to hear that it kind of spilled over into the current quarter.
Yeah. No crystal ball, but I can tell you what we're doing is we think a rational approach to the market. If you look at our approach to broadband, you mentioned this. A year ago, we sort of started on a new journey, right?
Right.
A pricing and packaging journey and how do we go to market. It was an honest assessment of where are we good, where are we bad? Because fixed wireless has probably taken more share than we thought. We got satellite coming and fiber is encroaching in our territory, so let's go sort of rewrite the playbook a little bit and organize it into different categories. It's through a consumer mindset and a consumer lens. What do they care about? They care about network product and experience. Simple categories. So on the network side, I think we're incredibly well-placed, right? We have multi-gig symmetrical. That's the path we're on. DOCSIS 4.0, FDX, full duplex, and this is a lot of jargon here, but simplistically, multi-gig symmetrical into every home, which matches where fiber is.
That's with 20% of our plant allocated to data.
Right.
We still have 80% allocated to video. Anybody questioning sort of the viability of our plant longer term and speeds we can ultimately offer, I would tell you we're not in that camp. We can match fiber already with 20% of our plant allocated to data. Long runway there. Feel completely comfortable in what we're doing on the network side. On the product side, we actually rate incredibly well. We're number one in our footprint in terms of Wi-Fi reliability, which is if you ask consumers what they care about, that's number one, right? There's sort of a price value, et cetera, but the first thing they'll say is, I want my Wi-Fi to work. I want the wire to work into the home, and then I want coverage inside of the home. Want everywhere coverage and want it to be incredibly reliable. We rank number one there.
On the product side, we sort of said, how can we go extend that, right? This is largely how we're competing is how can we add more value to the consumer? Whether that's wireless where we've got an interesting path in. We've accelerated that with free lines that we do monetize over time. It's not free forever. It's free for a year, but that's an awareness thing. We're competing more at the high end with our premium unlimited plans. We've just launched the Shield product, which is sort of a relaunch of our home security product, but it'll have several different flavors associated with it. The most basic layer is what you have in your home right now is a gateway that if you opt in as a consumer, which it's your choice, but it is a motion control sensor in your home.
If you want some basic level of home security through that, it's not all the bells and whistles, but it's a basic level we can offer for free. You just opt into it. Nobody else is matching that. I think increasingly you'll see us competing with here's a free camera. We want to drive you to our app. We want you engaging with our app. We want you seeing what's going on with your home. Add that to motion control, and you start to add more value into the bundle. Last category is experience, and that's the one where I think a year ago we said we need to make improvements here. Whether it's the pricing and packaging construct, which the history of this was there were teaser rates, and then two years later, or one year later, a pretty big step up.
That used to work in the industry when that was the way the industry competed. That's not the way the industry competes at this point, and so we had to really rewrite the rules around that. We had to get into the experience layer and say, okay, where are the deficits? Are we handling calls on time? Are we getting to customer resolution? It's a more competitive environment, hence you can't have pain points in the system. I think that's been a journey for us. We've invested quite a bit in that. We're, I think, still on that journey. But between internal investments and then externally, we've said, who's best in class out there? We use external partners. So between Google, Cresta, Sierra, got a number of them in the system at this point, and it's about how do you get the best IVR possible?
Let's say you have incoming calls into a call center. How do you route them as quickly as possible to get to resolution? How do you take the unassisted and agentify that? Customers come in and they actually don't want to talk to somebody. They want to be able to handle a problem pretty quickly and do it on their own. We're doing a lot of work there. Then for customers that end up talking to an agent, which we still have a lot of agents out there, and to the extent people want to go talk to an agent, we want to get them there as quickly as possible. But how do you agentify our own agents, and have them really have tools that are better than what they've had before? We've done a lot through that.
I think I would tell you, as we articulated this journey last year, we said these investments are going to cause temporary pressure on EBITDA. They're going to dilute broadband ARPU a little bit because free wireless lines inside a bundled construct dilute broadband ARPU, and it dilutes convergence ARPA a little bit. Convergence ARPA is something we're really focused on at this point. But we'll start to come out of this. We said on the second quarter call, I'd reiterate it here, we'd expect to have modest improvements in the EBITDA trajectory starting in the third quarter. We'd expect the same, by the way, on broadband ARPU, expect the same on convergence ARPU as well, where we'll be showing sequential improvements. I think as you step back, we're competing rationally. We're competing along the lines of where we think our strongest playbook is.
Again, back to the returns point, we enter into the market with strong returns on both sides of the convergence equation because we have a plant that's capable of multi-gig symmetrical that's been in existence forever with cheaper upgrades than anybody else had. We have a path into wireless that is no towers, no spectrum. It's an incredibly capital-light path that gives us a lot of flexibility.
Great. Then maybe just expanding a little bit more on wireless. Obviously, an important part of the connectivity strategy. You talked about some of the free line cohorts maturing into paved lines, and premium unlimited. I was just wondering if you could give us a little bit of a postmortem on the wireless strategy, and how it's been deepening customer relationships to date.
Yeah. Wireless is an enormous opportunity for us. I think it's no secret when you hear satellite companies start to talk about how do we get into the wireless market. It's because the addressable market is massive, and that's not just from a revenue perspective, it's from a profitability perspective as well. We see it the same way. We think we've got an advantage position of getting in because as we look at it, we have 65 million households with 30 million customer relationships that's really our right to sell into because we're selling wireless into existing relationships. We offload at a much higher rate than a traditional wireless company, and we're only selling into our own customers, which gives you an acquisition cost advantage.
You stack that all up and you go through a P&L all the way down to free cash flow, which is what we really care about, and where do you have advantages versus disadvantages in wireless. I would say gross margin, probably disadvantage. But as you start to get below that, acquisition cost, advantage. Capital intensity, huge advantage. Get all the way down. This is a strong return business for us that we really like. But it's also a business where as we stare at different pockets of growth, and we as a company right now, we've really used sort of the separation as a catalyst for both sides. Partially it's about spinning off NBC and they're going to be launched and off on their own and great things to come say and tell the market. But for the remaining cable co, it's also a forcing function.
How many things can we go reinvent. Where are the pockets for growth that we can just be more agile, more focused. There's a lot of different things out there we're looking at. But the big one that sits right in the middle, the biggest, far and away the largest addressable market is wireless. When you look at the wireless market, you studied this, as I've studied as an analyst for a long time too, it's a great market. It is 0.8%, 0.9% churn. That's the first stat I would look at. It is incredibly sticky customer relationships. What that usually means in a business is massive back books and overpriced back books. That's a huge opportunity for us. It's not easy to peel customers away. Everyone in this room probably, if I had to poll you on a family plan, it's tough.
Everybody's sort of staggered in terms of handsets and EIPs and when they got on different programs and every family member looks different. But that's not insurmountable. I think increasingly we're making our way into that business. If you look at what we've done recently, we've sort of said we have to solidify the foundation because our right to sell is a happy broadband customer, that's what we're selling on top of. We have to build awareness. That's what free lines were about, but it's free for a year, right. Then we're converting you. The early progress on that has been, we're pretty maniacal about if we give a free line, does someone activate it and does their usage start to build towards the 12 month mark when they're going to convert into a paying line?
The beauty of when you convert into a paying line is you're converting at a rate that's still a substantial discount to where the market is. If you like us, there's no reason to leave.
Right.
What we've seen so far is 70%+ of customers on free lines converting into paying lines. At the same time, we've really driven the premium unlimited business of wireless, which is sort of newer to us. I think a fair critique historically was who can cable companies really go after and whose subscribers are they stealing? I think competitors of ours would've said, hey, they play in the lower end of the market. They definitely play in prepaid. We're fully playing in postpaid at this point. If you look at full data allotments, handset availability, international roaming plans, there aren't really big differences. 40% of our incoming subscribers are now premium unlimited subscribers. That was 30% last quarter. It was substantially lower than that the quarter before. We're really starting to make some good progress there.
Converge benefits over time as we look at the total convergence portfolio that we have. We're coming into wireless, they're coming into broadband, but we sit there at $85 for a converged ARPA per household that we serve, and wireless is up at 150, 160, 170. To us, there's an enormous amount of room to run there, but we had to get a few things right, which we're starting to make a lot of progress on.
That's exciting. You certainly don't have your fair share in wireless yet.
Correct. We are 7% penetrated amongst our homes.
Right.
That is not our fair share.
Right. At the onset, you talked a little bit about some of your excitement around the traction that Comcast is having in business. Comcast acquired Nitel, you signed a business MVNO with T-Mobile. You have been making deeper inroads into enterprise. Could you talk a little bit more about the business strategy? What parts of the story do you think are most underappreciated by investors today, and what should we expect for future growth?
Yeah, I think this is one of the biggest ones that is misunderstood and not focused on the right way. It is a from scratch, a $10 billion book of business that generates almost $6 billion of EBITDA. Right? So we have been at this for a little over a decade. We have really done a great job penetrating the small business market. In many markets, we are actually the incumbent at this point. Small business is a great business to us. We clearly have a right to win. We have got high capacity pipes, we have got dedicated sales force. What you are seeing in small business is there is elements of it that are facing the same pressure that is going on in residential. But I would tell you that is sort of the lower end.
The protection that you have in small business, which we've experienced because we're growing the small business category, is that type of customer values not just connectivity, but they want a management layer that sits on top of it. They want managed Wi-Fi. They increasingly want cybersecurity. That means you're a little bit different from some of the competitive forces that are impacting the residential business, at least when you start to get to the mid to higher tiers of small business. We've done a great job. We're growing that business unlike others. I think the real opportunity over time from here is going to be enterprise. In enterprise, you mentioned it, Nitel, Masergy, those have been a couple great tuck-in deals that were about adding capabilities.
Our strategy in enterprise has been get footprint quickly, which was hyper builds and connectivity into office parks, et cetera. We've been at that for 10+ years, right? Connectivity into our footprint, then drive customer acquisition and then upsell services. That's the journey we've been on. Nitel, Masergy, whether it's carrier aggregation, SD-WAN, they brought specific capabilities that the beauty of that is when you start to build a scaled base with enterprise, you get a lot of enterprise customers coming back to you saying, I love what you're doing in the following areas. Can you do this? Right?
Then it's up to us to say, can we develop that in-house or is there some pure play company that does it better than we are that we can have immediate accretion with by just monetizing that across our entire base? That's largely what those two acquisitions were about. We're staring at a lot of other things that look like that, and how can we go accelerate enterprise even more? I think the exciting thing about enterprise for me is we've really built out the sales force around it, right? Which is a huge thing in enterprise. That is, you have to get that right. Comcast Business Services is the place to work at this point if you're in enterprise sales. If you think about everybody we're competing against at scale, those are declining businesses. They've been at it for 30- 40 years.
They're on legacy technologies. They're seeing their businesses decline, and it means something different when you're in that type of business versus here's the shiny object over here. It's pure growth. There's categories that they can go after, whether it's different technologies they're layering in and different services or new verticals that they're going after by building sales capabilities into it. I think that there's a real vibe in that business. We're growing high single digits on an already pretty well-established base. I think a ton of room for continued growth there. As we pick off verticals, one of the early ones we started with, for instance, was quick service retail, right? At this point, we have 12 of the top 15 quick service retailers. These are thousands of locations across the country where we're the throat to choke in the middle.
We're the connectivity layer, but we're also the managed services layer and really good job, and we'll just continue to go take over verticals.
Great. I guess a natural follow-up would be as you become a more meaningful player in enterprise, what proof points should investors watch over the next couple of years as you accelerate growth in larger enterprise customers? Are there any impacts to margins or capital intensity as you move away from SMB and not move away, mix shift more towards enterprise?
Yeah. This is the beauty of this model. The things you have to put in place are, there's a little bit of capital around hyper builds, which we've been at for a while. So I wouldn't tell you there's incremental capital intensity necessarily coming. We have picked our spots around capabilities, right? To the extent we find the next Company X that's delivering a capability that we can go scale it, and I could come to you and say, here's the model around this. This is immediately scalable, hence it's immediately accretive to go scale across our base, we're wide open for business on things like that.
Great. Just on the financials, as you think about the financial profile of CMP, 2026 sounds like an investment year as you absorb the impacts of the new broadband and wireless go-to-market, the customer experience investments. So how do these investments translate into better long-term economics, including what are the drivers of ARPA growth? Then talk a little bit about the path from this investment period towards stronger revenue and EBITDA growth.
Yeah, I think you articulated exactly right. What we said at the end of last year was 2026 was going to be an investment year. That is on the customer experience side, that is on pricing and packaging, and that is facilitating getting more aggressive in wireless. All those things are exactly what has played out. We reported what we did in the second quarter and then gave an outlook that we were going to start to have some relief on the critical metrics around ARPU and EBITDA performance. I think, if you step way up, our simple goal is we passed 65 million households. How do we serve the vast majority of those? How do we sell multi-product and establish a baseline connectivity layer, then sell wireless, sell home security over time, and then there are other services that we have on the radar as well.
How do we drive the lowest possible churn? It is sort of a customer lifetime value lens. How do we compete via that? As I said, our entry into these different pockets, whether it is broadband, where we are capital efficient using a legacy network, wireless, where super capital light home security that we can go relaunch, but use a lot of the existing gateways that we have in homes that just have capabilities that are beyond what we are monetizing right now. I think huge opportunity. The other big opportunity for us, the separation did not have to be the catalyst, but it is a little bit of a catalyst for this. If you think about the management teams in place, Michael Angelakis advisory role, but already starting to put his imprint in the company, Steve Croney as president, myself as CFO.
We are getting after the cost side in a way that we have not before. Not to say that we have been aggressive. I think over the past several years, we have eliminated divisional structures. We have done a lot of things. We embarked earlier this month on the largest cost transformation in the company's history. That is sort of going on right now. This will be billions of dollars of costs. I would frame it more as a transformation. It is not a budget exercise. It is how do we rewrite the rules in terms of how we do business on the connectivity and technology side? We will have more to say about that in the third quarter. I would expect that there is some noise about that in the coming weeks. Nonetheless, transformational, and it is sort of three parts.
It is eliminate layers to get to much faster decision making, and there is a huge opportunity there on the cost side. It is how do you facilitate the type of technology transformation we are undergoing to really get systems processes in place, whether it is internal redesign or whether it is external like partners Google, Cresta Sierra, how do we do that even faster? How do we free up even more capacity for growth? I talked about wireless. There is more of a role for us to play. That probably means we have got to go invest more there. If you think about edge compute and the amount of data we have in sort of our ecosystem, how do you go monetize that? There is a whole lot of things I would point out to you that are exciting. They are growthy. They are going to require some investment.
How do we free up capacity? We do not want to be doing incremental. Instead, we want to say we got a lot of ways to free up capacity in the organization to repoint towards growth. I think you are going to see a lot about this in the coming weeks, but nonetheless, something we are really focused on cost structure.
Great. Thank you for putting that on our radar. In the last few minutes, why do not we get a couple questions in on content and experiences? Maybe starting with theme parks. Epic Universe had a very strong initial performance. It sounded like Q2 Orlando and international pressures were present. Could you just give us a little bit of an update on what is happening in Orlando? What gives you the confidence that the softness that we have seen in the second quarter is transient, and how is management balancing pricing and promotional levers with cost efficiencies to manage EBITDA margins?
Well, our theme parks, they are an incredible business. If you think about we are one of two globally scaled experiences businesses that look like that. One is a lot bigger than we are, but we are in a category that is not too far away, and if you think about the breadth of IP, the differentiated attractions, Epic Universe and it is just a different experience and super creative IP to leverage. Then the type of destinations that we have, Osaka, Beijing, Hollywood, just differentiated and incredible places and locations to be. So our starting point is, and even if you think about the future proof businesses, AI exposed, experiences category, and especially the durability of these assets, the resonance of the IP. This is a business you would say, how do we invest more in? Right?
I would say at the broad level, that is how we feel about theme parks. As you get down into performance, you are right. We started to see in the second quarter something that we flagged in the second quarter call. But if you step back and say, what is the last couple of years journey been in theme parks? We launched Epic. That did incredibly well. It lifted all of Orlando. It a little bit masked what was going on with international for the past three quarters. Our international parks, the biggest ones are number one, Japan, number two, Beijing. In Japan, we are in Osaka. Geopolitical impacts, so Chinese visitation in Japan has dropped off a cliff. That impacts our Osaka park. We have been feeling that for three quarters. We articulated that the entire way.
The Beijing park has seen a little bit in terms of macroeconomics. If you look at the Chinese consumer, that's impacted us. What we saw for a couple quarters was weakness in international, exactly how we were articulating it, more than offset by strength in domestic, in particular, Orlando. Epic did incredibly well. That sort of lifted all boats in the Orlando market for us at the North Campus. The legacy parks, so it did incredibly well there. What we started to see in June was softness in Orlando, and we articulated that on the call. That's the reason we drifted a little bit in the second quarter in terms of performance. As we move through the quarter, I would tell you, I don't think anything's changed. We're continuing to see softness in that market.
It's sort of equal parts, a little bit macro, gas prices, airfare, that's impacting the market a little bit. But also, there clearly was a pull forward. You've seen the park. Epic's a fantastic park. There was a ton of pent-up demand. That actually lifted the entire Orlando market for us. You saw that come out of competitors. Obviously, if you rewind the clock a year ago, that was sort of the discussion. Here we are a year later comping against that, and so I think that's playing a little bit of a role now. But if you step way back, you asked the question is, how does that inform future investing? I would take the lens into Epic. Was that as a good thing or a bad thing? Are we still confident that it was the right investment, given what we're seeing right now?
The answer is absolutely yes. If you put my analyst hat back on and look at a two-year stack, how are we doing versus two years ago? Because the pull-forward aspect was what it was. In the Orlando market versus two years ago, we are up materially in every metric. So that's attendance, that's per caps, overall financial performance, and we're rating really well in guest satisfaction. To me, those are the indicators of future performance. That's what we're focused on. So incredibly bullish on the parks over the long term. But you're not wrong. We do have some near-term headwinds.
Great. In the last minute as we wrap up, could you just step back and talk about capital allocation from here? The buyback has paused as you work through the separation. How are you balancing investing in the business, making sure the balance sheet is strong and shareholder returns? What's the capital allocation framework that you would expect for both companies post-spin?
Yeah, I think we'll have a lot more to say about this in the coming, ultimately, months and quarters as we get closer towards the spin. But one thing that may inform this is we've been incredibly consistent in the capital allocation framework that we've had for the overall business. And you got sort of the same personalities in the room, one side, the other. So it's known quantities. But just as a reminder, priority number one is and always has been reinvest in the businesses. Right? And we've been able to do, whether it's theme parks, whether it's new home formation, whether it's hyper builds into enterprises, smaller deals like the Nitel, Masergy's. We've had an incredible experience and sort of really consistent philosophy around reinvesting in the business and having that be the primary driver and first call on capital.
1A is have an incredibly strong balance sheet, right? And I think we've been incredibly disciplined in sort of saying, here's what we think is right for this company. It's been historically low 2s leverage. Most recent quarter, I think, was 2.3 turns. And have a balance sheet that protects you through investment cycles, protects you through capital cycles, economic cycles, potential pandemics. Just have the flexibility to continue to invest no matter what the environment is. That's always served us well. So that's been the balance sheet framework. And then we've had a really strong capital returns framework as well. We bought back, if you look at the last five, six years, 20% reduction in our share count, very strong dividend policy, and we realize how important that is to investors. So we haven't really strayed from that.
So I would tell you that overarching framework should inform how we think about life post-separation.
Great. Well, Jason, thank you again for participating in the conference. It's a privilege to have you on stage here.
Thank you. Great to be back.