Versant Media Group, Inc. 10-Q

Item 1. Financial Statements VERSANT MEDIA GROUP, INC. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (UNAUDITED) Three months ended March 31, 2026 2025 (in millions, except per share data) Revenue (a) $ 1,687 $ 1,706 Costs and Expenses: Costs of revenue (exclusive of depreciation and amortization) (a) 638 654 Selling, general and administrative 351 307 Depreciation and amortization 256 245 Total costs and expenses 1,245 1,207 Operating income 442 499 Interest expense ( 52 ) — Investment and other income, net 8 — Income before income taxes 398 499 Income tax expense ( 112 ) ( 132 ) Net income 286 367 Less: Net income attributable to noncontrolling interests — — Net income attributable to Versant $ 286 $ 367 Basic earnings per common share attributable to Versant shareholders $ 1.99 $ 2.55 Diluted earnings per common share attributable to Versant shareholders $ 1.99 $ 2.55 (a) Includes related party revenues and costs of revenue totaling $ 297 million and $ 234 million, respectively for the three months ended March 31, 2025. See accompanying notes to condensed consolidated and combined financial statements, including Note 10 for related party transactions. 5 VERSANT MEDIA GROUP, INC. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three months ended March 31, 2026 2025 (in millions) Net income $ 286 $ 367 Other comprehensive income, net of tax: Currency translation adjustments, net of deferred taxes of $ 0 for each period — 1 Gains on cash flow hedges, net of taxes of $ 1 million and $ 0 3 — Comprehensive income attributable to Versant $ 289 $ 367 See accompanying notes to condensed consolidated and combined financial statements, including Note 10 for related party transactions. 6 VERSANT MEDIA GROUP, INC. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED) Three months ended March 31, 2026 2025 (in millions) Operating Activities Net income $ 286 $ 367 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 256 245 Share-based compensation 17 3 Noncash interest expense 3 — Deferred income taxes ( 103 ) ( 37 ) Changes in operating assets and liabilities: Current and noncurrent receivables, net ( 391 ) ( 81 ) Content costs, net 70 35 Accounts payable 127 ( 33 ) Other operating assets and liabilities 320 ( 23 ) Net cash provided by operating activities 585 478 Investing Activities Capital expenditures ( 27 ) ( 21 ) Acquisitions of businesses and investments ( 145 ) — Other — ( 2 ) Net cash used in investing activities ( 172 ) ( 23 ) Financing Activities Proceeds from borrowings 1,973 — Repurchases of common stock under repurchase program and employee plans ( 100 ) — Net transfers to Comcast ( 2,250 ) ( 454 ) Settlement payment from NBCUniversal 70 — Other ( 2 ) ( 3 ) Net cash used in financing activities ( 309 ) ( 458 ) Increase (decrease) in cash, cash equivalents and restricted cash 104 ( 3 ) Cash and cash equivalents and restricted cash, beginning of year 1,092 8 Cash and cash equivalents, end of period $ 1,196 $ 5 See accompanying notes to condensed consolidated and combined financial statements, including Note 10 for related party transactions. 7 VERSANT MEDIA GROUP, INC. CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (UNAUDITED) March 31, December 31, 2026 2025 (in millions, except share data) Assets Current Assets: Cash and cash equivalents $ 1,193 $ 55 Restricted cash — 1,034 Receivables, net 1,193 1,151 Assets held for sale 181 196 Other current assets 82 66 Total current assets 2,650 2,502 Content costs 584 539 Investments 241 214 Property and equipment, net of accumulated depreciation of $ 611 million and $ 615 million 424 423 Intangible assets, net of accumulated amortization of $ 8,949 million and $ 8,848 million 713 924 Goodwill 7,707 7,611 Other noncurrent assets, net 187 120 Total assets $ 12,506 $ 12,333 Liabilities and Equity Current Liabilities: Accounts payable $ 283 $ 151 Deferred revenue 77 163 Accrued content obligations 180 105 Accrued employee costs 84 62 Current portion of long-term debt 83 — Accrued expenses and other current liabilities 434 141 Total current liabilities 1,140 622 Deferred income taxes 115 191 Noncurrent content obligations 74 72 Long-term debt 2,869 983 Other noncurrent liabilities 163 63 Commitments and contingencies Equity: Preferred stock, no par value — authorized 20 million shares; none issued as of March 31, 2026 — — Class A common stock, $ 0.01 par value — authorized 7.5 billion shares; issued and outstanding 141,103,811 shares as of March 31, 2026 1 — Class B common stock, $ 0.01 par value — authorized 75 million shares; issued and outstanding 377,775 shares as of March 31, 2026 — — Additional paid-in capital 7,806 — Retained earnings 231 — Net Comcast investment — 10,299 Accumulated other comprehensive loss ( 4 ) ( 7 ) Total equity attributable to Versant 8,034 10,292 Noncontrolling interests 110 110 Total equity 8,145 10,402 Total liabilities and equity $ 12,506 $ 12,333 See accompanying notes to condensed consolidated and combined financial statements, including Note 10 for related party transactions. 8 VERSANT MEDIA GROUP, INC. CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CHANGES IN EQUITY (UNAUDITED) Additional Common Stock (a) Paid-in Retained Net Comcast Noncontrolling Total Shares Amount Capital Earnings Investment AOCI (b) Interests Equity (in millions, except share amounts which are in thousands) Balance as of January 1, 2026 — $ — $ — $ — $ 10,299 $ ( 7 ) $ 110 $ 10,402 Separation-related transactions — — — — ( 2,408 ) — — ( 2,408 ) Issuance of common stock upon Separation 144,169 1 7,890 — ( 7,891 ) — — — Share-based compensation 7 — 17 — — — — 17 Repurchases of common stock ( 2,694 ) — ( 101 ) — — — — ( 101 ) Dividends ($ 0.375 per common share) — — — ( 55 ) — — — ( 55 ) Net income — — — 286 — — — 286 Other comprehensive income — — — — — 3 — 3 Balance as of March 31, 2026 141,482 $ 1 $ 7,806 $ 231 $ — $ ( 4 ) $ 110 $ 8,145 Additional Common Stock (a) Paid-in Retained Net Comcast Noncontrolling Total Shares Amount Capital Earnings investment AOCI (b) interests Equity (in millions, except share amounts which are in thousands) Balance as of January 1, 2025 — $ — $ — $ — $ 10,805 $ ( 8 ) $ 118 $ 10,915 Transactions with Comcast, net — — — — ( 449 ) — — ( 449 ) Net income — — — — 367 — — 367 Other comprehensive income — — — — — 1 — 1 Balance as of March 31, 2025 — $ — $ — $ — $ 10,723 $ ( 7 ) $ 119 $ 10,835 (a) Includes Class A and Class B common stock (b) Accumulated other comprehensive income (loss) See accompanying notes to condensed consolidated and combined financial statements, including Note 10 for related party transactions. 9 VERSANT MEDIA GROUP, INC. Notes to Condensed Consolidated and Combined Financial Statements (Unaudited) Note 1. Business, Basis of Presentation and Significant Accounting Policies Description of the Company Versant Media Group, Inc. (“Versant”, the “Company”, “we”, “us”, “our”) is a media and entertainment business that operates in four core markets: political news and opinion, business news and personal finance, golf, and sports and genre entertainment. We serve these markets primarily through a portfolio of brands comprised of networks, including USA Network, CNBC, MS NOW, Oxygen, E!, Syfy, and Golf Channel, and digital platforms, including Fandango, Rotten Tomatoes, GolfNow and SportsEngine. On January 2, 2026, the separation (the “Separation”) of Versant from Comcast Corporation (“Comcast”) was completed. In connection with the completion of the Separation, the assets related to certain of Comcast’s cable television networks and digital platforms were contributed to, and the related liabilities were assumed by Versant in accordance with the separation and distribution agreement and other agreements entered into in connection with the Separation. These agreements, among other things, effected the Separation and provide a framework for our relationship with Comcast after the Separation, including the separation and distribution agreement, the transition service agreement, the tax matters agreement and certain other agreements related to employee matters, intellectual property, and certain commercial arrangements. On January 5, 2026, our common stock began trading on The Nasdaq Stock Market LLC (“Nasdaq”) under the ticker symbol “VSNT”. In connection with the Separation, we issued approximately $ 3.0 billion of total debt, including borrowings under term loans drawn upon the Separation, as well as senior notes issued in October 2025 (see Note 5). The proceeds from the senior notes were initially placed in escrow and presented as restricted cash as of December 31, 2025. A portion of the proceeds from these borrowings, including the amounts in escrow, which were released in connection with the Separation, was used to fund a cash payment to Comcast of $ 2.25 billion at the time of the Separation as consideration for assets that were contributed to us in connection with the Separation. Basis of Presentation We have prepared these interim condensed consolidated and combined financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), which permit reduced disclosures for interim periods. These financial statements include all adjustments that are necessary for a fair presentation of our condensed consolidated and combined results of operations, cash flows and financial condition for the periods shown, including normal, recurring accruals and other items. The condensed consolidated and combined results of operations for the interim periods presented are not necessarily indicative of results for the full year. Following the separation, our financial statements are presented on a consolidated basis and include all entities in which we have a controlling voting interest. Prior to the Separation, Versant businesses were operated as part of Comcast’s Media segment. Accordingly, our financial statements for those periods are presented on a combined basis derived from Comcast’s historical accounting records as if Versant operations had been conducted independently from Comcast. The combined financial statements reflect the historical cost basis of assets and liabilities, which did not reflect all of the assets and liabilities of Versant following the Separation and included certain assets and liabilities that were retained by Comcast following the Separation. The combined financial statements also reflect the historical revenues, direct costs, and allocations of indirect costs for administrative functions and services performed on our behalf by other centralized functions within Comcast and allocations of costs for the use of shared assets (see Note 10). These expenses have been allocated on a pro rata basis using an applicable measure of revenue. All allocations and estimates reflected in the combined financial statements are based on assumptions that management believes are reasonable. However, the condensed combined financial statements do not purport to reflect what our results of operations, comprehensive income, financial position, or cash flows would have been had we operated as a separate, stand-alone entity during the periods prior to the Separation. 10 The condensed consolidated and combined financial statements should be read in conjunction with the Company’s audited combined financial statements and notes included in our Annual Report on Form 10-K for the year ended December 31, 2025. Segments We present our operations in one reportable business segment and our Chief Executive Officer is the chief operating decision maker (“CODM”). Our business operates complementary brands, generating revenue through contracts or monetization strategies that span across brands, and leveraging integrated operational infrastructure. As a single segment entity, our segment performance measure used in the measurement of operational strength and performance and in the evaluation of underlying trends is net income attributable to Versant and the measure of segment assets is total assets. Additional information about our operations and these measures is presented in the condensed consolidated and combined financial statements, with further details included throughout the footnotes, including certain of our significant operating expenses in Note 3. Recent Accounting Pronouncements Disaggregation of Income Statement Expenses In November 2024, the FASB issued updated accounting guidance related to disclosures of certain costs and expenses. The updated accounting guidance, among other things, requires quantitative disclosures for employee compensation, selling expenses and purchases of inventory. The updated guidance is effective beginning with our Annual Report on Form 10-K for the year ended December 31, 2027. We are in the process of evaluating the impact of this accounting guidance on our financial statements. Internal-Use Software In September 2025, the FASB issued updated accounting guidance related to internal-use software. The updated guidance eliminates references to software project stages and clarifies that capitalization of internal-use software costs should begin once management authorizes and commits to funding a software project and it is probable that the project will be completed and used as intended. The updated guidance is effective for us as of January 1, 2028, with early adoption permitted. We are in the process of evaluating the impact of this accounting guidance on our financial statements. Interim Reporting In December 2025, the FASB issued updated accounting guidance on interim reporting. The updated guidance establishes a principle requiring entities to disclose events occurring after the end of the most recent annual reporting period that have a material impact on the entity, as well as clarifies the applicability of interim disclosure requirements. The guidance does not change the fundamental nature of interim reporting or expand or reduce current interim disclosure requirements. The guidance is effective for us beginning in interim periods after January 1, 2028, with early adoption permitted. We are in the process of evaluating the impact of this accounting guidance on our financial statements. Government Grants In December 2025, the FASB issued new accounting guidance on the recognition, measurement and presentation of government grants received by business entities. The new guidance defines government grants, clarifies their scope and provides a recognition threshold under which a grant is recognized when it is probable the entity will comply with the grant’s conditions and that the grant will be received. The updated guidance is effective for us as of January 1, 2029, and early adoption is permitted. We are in the process of evaluating the impact of this accounting guidance on our financial statements. 11 Note 2. Revenue Three months ended March 31, 2026 2025 (in millions) Linear distribution $ 1,006 $ 1,085 Advertising 368 388 Platforms 192 176 Content licensing and other 121 57 Total revenue $ 1,687 $ 1,706 Pursuant to the terms of a commercial agreement entered into with Comcast in connection with the Separation, NBCUniversal Media, LLC (“NBCUniversal”) sells domestic linear and related digital advertising inventory on our behalf. We continue to recognize revenue for the amount earned from advertisers as advertisements are aired or delivered, net of agency commissions. Under the commercial agreement, Versant is generally paid based on impressions delivered and is not responsible for guaranteed audience ratings. Fees owed to NBCUniversal for the services under this arrangement are presented within selling, general and administrative expenses in our condensed consolidated statement of income for the periods following the Separation. The amount of future revenue to be earned related to fixed price contracts with advertisers in excess of one year totaled $ 256 million as of March 31, 2026, which will be recognized over the next 5 years. Balance Sheets March 31, December 31, 2026 2025 (in millions) Receivables, gross $ 1,195 $ 1,161 Less: Allowance for credit losses 2 10 Receivables, net $ 1,193 $ 1,151 Our most significant accounts receivable balances relate to our linear distribution agreements with large multichannel video providers. As of March 31, 2026 and December 31, 2025, our ten largest multichannel video provider customers accounted for approximately 60 % and 56 % of our total accounts receivable, respectively. As of March 31, 2026 and December 31, 2025, the gift card liability for our movie ticket platform was $ 47 million and $ 51 million, respectively, including $ 32 million and $ 36 million in accrued expenses and other current liabilities, respectively, with the remainder presented in other noncurrent liabilities. Revenue recorded related to breakage on these gift cards was $ 4 million and $ 6 million for the three months ended March 31, 2026 and 2025, respectively. Note 3. Costs of Revenue Three months ended March 31, 2026 2025 (in millions) Programming and production $ 519 $ 547 Other 119 108 Total costs of revenue $ 638 $ 654 12 Programming and Production Costs Three months ended March 31, 2026 2025 (in millions) Licensed, including sports rights $ 302 $ 319 Owned 217 228 Total programming and production costs $ 519 $ 547 Capitalized Content Costs March 31, December 31, 2026 2025 (in millions) Licensed, including sports advances $ 492 $ 436 Owned: In production and in development 18 30 Released, less amortization 74 73 92 103 Content costs $ 584 $ 539 Note 4. Goodwill The changes in the carrying value of our goodwill balance were as follows: March 31, 2026 (in millions) Goodwill balance as of December 31, 2025 $ 7,611 Acquisition 96 Goodwill balance as of March 31, 2026 $ 7,707 Note 5. Debt Obligations March 31, December 31, 2026 2025 (in millions) 7.250 % Senior Secured Notes due 2031 (“Senior Notes”) $ 1,000 $ 1,000 Term Loan A Facility 1,000 — Term Loan B Facility 1,000 — Unamortized debt issuance costs and discounts, net ( 48 ) ( 17 ) Total long-term debt 2,952 983 Less: current portion of long-term debt, net 83 — Long-term debt, net of current portion $ 2,869 $ 983 The estimated fair value of our long-term debt obligations was $ 3.03 billion and $ 1.03 billion as of March 31, 2026 and December 31, 2025, respectively. Fair values of our Senior Notes were estimated using Level 2 inputs, based on external market data for debt with similar terms and maturities. The fair values of our variable rate term loans were estimated to approximate their face values. 13 On January 2, 2026, in connection with the Separation, we borrowed $ 1.0 billion under a term loan due January 2031 provided for in our October 2025 credit agreement (the “Term Loan A Facility”). On January 2, 2026, we also entered into a credit agreement providing for an additional term loan of $ 1.0 billion due January 2031 (the “Term Loan B Facility” and together with Term Loan A Facility, the “Term Loans”), which was fully funded on that date. The Term Loans and our $ 750 million revolving credit facility (the “Revolving Credit Facility” and together with the Term Loans, the “Senior Credit Facilities”) are secured by substantially all the assets of the Company and its material, wholly-owned U.S. subsidiaries, subject to certain exceptions. Term Loan A Facility and Term Loan B Facility require repayment of initial amounts borrowed of 5.00 % and 7.00 %, respectively, per annum payable in quarterly installments beginning on September 30, 2026, with the balance being payable at maturity. Contractual maturities of our debt obligations as of March 31, 2026 totaled $ 60 million in 2026 and approximately $ 120 million per year from 2027 to 2030, with the remainder payable in 2031. The Term Loan A Facility and the Revolving Credit Facility contain a financial covenant that requires us to maintain a maximum consolidated first lien net leverage ratio, as defined in the credit agreement governing the Term Loan A Facility and the Revolving Credit Facility, of not greater than 3.50 :1.00, beginning with the third quarter of 2026. As of March 31, 2026, no events of default have occurred under these facilities. Derivatives and Hedging In March 2026, we entered into interest rate swaps designated as cash flow hedges to manage our exposure to interest rate risk related to variable-rate debt obligations. As of March 31, 2026, the notional amount of these derivatives was $ 1.0 billion, and the fair values totaled $ 5 million and were classified within other current assets and other noncurrent assets in our consolidated balance sheet as of March 31, 2026. The fair values of these financial instruments are primarily based on Level 2 inputs based on valuation models that use observable market data. Changes in fair value of derivative instruments classified as cash flow hedges are recognized in accumulated other comprehensive income until the hedged item affects earnings. During the three months ended March 31, 2026, derivative gains (losses) recognized within interest expense on our consolidated statement of income were not material. Cash flows related to derivative instruments designated as cash flow hedges are classified in our consolidated statements of cash flows based on the classifications of the underlying cash flows. Note 6. Commitments and Contingencies Contingencies We are subject to legal proceedings and claims that arise in the ordinary course of our business. While the amount of ultimate liability with respect to such proceedings and claims is not expected to materially affect our results of operations, cash flows or financial position, any such legal proceedings or claims could be time-consuming and injure our reputation. 14 Note 7. Stockholders’ Equity Capitalization The Separation from Comcast was completed on January 2, 2026 through the distribution of 100 % of the shares of Versant Class A common stock and Versant Class B common stock to holders of Comcast Class A common stock and Comcast Class B common stock as of the close of business on the record date of December 16, 2025. Comcast’s shareholders of record received one share of Versant Class A common stock or Versant Class B common stock for every 25 shares of Comcast Class A common stock or Class B common stock, respectively, held as of the record date. Immediately following the Separation, holders of Comcast’s common stock prior to the Separation owned 100 % of our issued and outstanding shares. Our Articles of Incorporation were amended and restated following the Separation to provide us with the authority to issue up to 7.5 billion shares of $ 0.01 par value per share Class A common stock, up to 75 million shares of $ 0.01 par value per share of Class B common stock, and up to 20 million shares of preferred stock with no par value. The number of votes that each share of Class A common stock has at any given time depends on the number of shares of Class A common stock and Class B common stock then outstanding, with each share of Class B common stock having 15 votes per share, and are entitled to any dividends when and as declared without regard to class. The Class B common stock represents 33 1/3% of the combined voting power of our common stock. On each matter to be voted on, the holders of Class A common stock and Class B common stock will vote together. Each share of Class B common stock is convertible at the option of the holder into one share of Class A common stock. Dividends On March 3, 2026, our Board of Directors declared our first quarter dividend of $ 0.375 per share, which was paid on April 22, 2026 to shareholders of record as of the close of business on April 1, 2026. On May 14, 2026, our Board of Directors declared our second quarter dividend of $ 0.375 per share, payable on July 22, 2026 to shareholders of record as of the close of business on July 1, 2026. Accumulated Other Comprehensive Income (loss) Changes in accumulated other comprehensive loss (“AOCI”) by component, net of income taxes, for the three months ended March 31, 2026 were as follows: Currency Translation Adjustments Cash Flow Hedges Total AOCI (in millions) Balance as of December 31, 2025 $ ( 7 ) $ — $ ( 7 ) Accumulated other comprehensive income before reclasses, net of taxes — 4 4 Reclasses from accumulated other comprehensive income, net of taxes — ( 1 ) ( 1 ) Balance as of March 31, 2026 $ ( 7 ) $ 3 $ ( 4 ) 15 Weighted-Average Common Shares Outstanding Three Months Ended March 31, 2026 2025 (a) (in thousands) Weighted-average number of common shares outstanding - basic (b) 143,378 144,169 Effect of dilutive securities 30 — Weighted-average number of common shares outstanding - diluted (b) 143,409 144,169 Weighted average antidilutive securities 2,018 — __________________________________ (a) For periods prior to the Separation on January 2, 2026, the computation of basic and diluted earnings per share was calculated using shares of Versant common stock outstanding on the date of the Separation. (b) Includes Class A and Class B common stock. Diluted earnings per share is calculated using the treasury stock method and includes the impact of unvested share-based compensation awards (see Note 8) to the extent dilutive. Antidilutive securities represent the number of potential common shares related to share-based compensation awards that were excluded from diluted earnings per share because their effect would have been antidilutive. Note 8. Share-based Compensation In January 2026, in connection with the Separation, our Board of Directors adopted our Omnibus Equity Incentive Plan (the “Plan”). A total of 19 million shares of the Company’s Class A common stock were initially reserved for issuance under the Plan, subject to certain adjustments. The Plan may be used to grant awards in the form of restricted stock, restricted stock units, stock options, stock appreciation right awards or other share-based awards. As of March 31, 2026, 16,138,578 shares were available for future issuances. Restricted Stock Units In connection with the Separation, restricted stock units (“RSUs”) originally granted to our employees under Comcast’s equity incentive plans were converted into Versant RSUs in accordance with the employee matters agreement. During the three months ended March 31, 2026, we granted RSUs to eligible employees, which vest ratably over a three-year service period. In addition, we granted RSUs to our board of directors, which will vest on the annual meeting date. The fair value of RSUs is measured based on the closing price of our Class A common stock on the date of grant and the associated expense is recognized on a straight-line basis over the requisite service period. Performance Stock Units During the three months ended March 31, 2026, we also granted performance stock units (“PSUs”) to certain of our senior executives, which vest at the end of a three-year service period, and the number of shares that ultimately vest are subject to either market conditions or a combination of market and performance conditions. We estimate the fair value of PSUs using a Monte Carlo simulation and the fair values of PSUs granted during the three months ended March 31, 2026 were estimated using a weighted average expected volatility of 33.3 % and a weighted average risk-free interest rate of 3.5 %. Compensation expense for awards subject only to market conditions is recognized based on the grant date fair value on a straight-line basis over the requisite service period. Our PSUs with performance conditions include provisions whereby performance targets are not yet approved or are subject to adjustment, and as such compensation expense is recognized over the requisite service period based on fair value determined at the end of each reporting period and the probable outcome of the performance conditions. 16 Each of our unvested RSU and PSU awards that is held as of a dividend record date is entitled to a dividend equivalent equal to the amount paid with respect to one share of Class A Common Stock, which will be paid upon vesting of the underlying awards. Certain equity awards also contain accelerated vesting provisions upon meeting certain retirement eligibility provisions, based on age and service. We recognize forfeitures as they occur. Three months ended March 31, 2026 2025 (in millions) Share-based compensation expense $ 17 $ 3 The following table presents our share-based compensation activity for the three months ended March 31, 2026: RSUs PSUs (a) Number of Shares Weighted-Average Grant Date Fair Value Number of Shares Weighted-Average Grant Date Fair Value Converted at Separation (b) 1,561,168 $ 55.68 — $ — Granted 1,976,261 $ 36.10 892,018 $ 38.36 Vested 11,812 $ 60.27 — $ — Forfeited 15,638 $ 45.52 — $ — Outstanding - March 31, 2026 3,509,979 $ 44.68 892,018 $ 42.05 _________________________________________ (a) Amounts represent the number of PSUs in agreements with senior executives. For awards with performance targets not yet approved or subject to adjustment, fair values are presented at the time agreements are approved and as of the end of the period. (b) Amounts represent awards outstanding prior to the Separation with the number of shares and fair value adjusted to reflect the impacts of the conversion formula as outlined in the employee matters agreement. As of March 31, 2026, unrecognized compensation expense related to unvested RSUs was $ 128 million, and is expected to be recognized over a weighted-average period of approximately 2.9 years. As of March 31, 2026, unrecognized compensation expense related to unvested PSUs is based on the number of PSUs presented in the table above and was $ 35 million, which is expected to be recognized over a weighted-average period of approximately 2.8 years. Note 9. Additional Financial Information Supplemental Cash Flow Information March 31, December 31, 2026 2025 (in millions) Cash and cash equivalents $ 1,193 $ 55 Restricted cash — 1,034 Assets held for sale 3 3 Total cash and cash equivalents and restricted cash on statement of cash flows $ 1,196 $ 1,092 During the three months ended March 31, 2026, we paid $ 31 million cash for interest and $ 11 million cash for income taxes. As of March 31, 2026, income taxes payable was $ 205 million, which is reflected in accrued expenses and other current liabilities. 17 Held for Sale During the second quarter of 2026, we sold most of the SportsEngine business and the related assets and liabilities were classified as held for sale in our consolidated and combined balance sheets. The assets held for sale as of March 31, 2026 and December 31, 2025 are primarily comprised of goodwill of $ 149 million, property and equipment of $ 21 million and $ 17 million, respectively, and intangible assets of $ 14 million. Liabilities held for sale totaled $ 19 million and $ 18 million were presented in other current liabilities as of March 31, 2026 and December 31, 2025, respectively. The assets held for sale were measured at estimated fair value less costs to sell as of March 31, 2026, resulting in an immaterial adjustment recorded within depreciation and amortization expense for the three months ended March 31, 2026. Note 10. Related Parties Prior to the Separation, our transactions with Comcast and its subsidiaries were considered related party transactions. Following separation, transactions with Comcast are not considered related party transactions. Transactions Prior to the Separation, Comcast provided us with significant corporate, infrastructure and shared services, including the license of content for use on our networks, the distribution of our television networks and purchases and sales of advertising. The nature of these services was similar to services that we purchase from or provide to third-parties. In addition, certain costs related to production activities that use centralized Comcast operations were directly charged to us based on usage. The following disclosures summarize related party activity between us and Comcast, which occurred prior to our Separation, and are included in the condensed combined financial statements for the three months ended March 31, 2025 and as of December 31, 2025. Sales to related parties were $ 297 million for the three months ended March 31, 2025. Accounts receivable due for these transactions were $ 123 million as of December 31, 2025. Costs of revenue from related parties were $ 161 million for the three months ended March 31, 2025. Capitalized content costs related to these costs were $ 302 million as of December 31, 2025. Content obligations related to these costs were $ 94 million as of December 31, 2025. Costs of advertising purchased from related parties were $ 3 million for the three months ended March 31, 2025, and are presented in selling, general and administrative expenses. Prior to the third quarter of 2025, we had related party loan balances associated with the participation of certain of our subsidiaries in Comcast’s centralized cash management programs. Activity related to loans receivable and payable is presented in the combined statements of cash flows in other investing and other financing activities, respectively. Shared Services and Other Allocated Costs The condensed combined financial statements for the three months ended March 31, 2025 and as of December 31, 2025 include transactions involving shared services and assets (including expenses primarily related to personnel, advertising and marketing, facilities, information technology and network communications support and other overhead functions) and certain corporate administrative services (including charges for services such as accounting, tax, treasury and cash management, insurance, legal and risk management) that were provided to us by Comcast. These costs were generally allocated on a pro rata basis using an applicable measure of revenue applied to the relevant pool of costs (e.g., costs incurred at Comcast’s Media segment or corporate levels), including depreciation and amortization expense for shared assets. Allocated costs are included in costs of revenue and selling, general and administrative expenses in the combined statement of income and are reflected in the combined balance sheets and statements of cash flows as changes in net Comcast investment. These amounts represent management’s reasonable estimate of the costs incurred; however, they are not necessarily representative of the costs required for us to operate as an independent, publicly traded company. For the three months ended March 31, 2025, amounts recorded in cost of revenue and selling, general and administrative expenses for these services were $ 73 million and $ 236 million, respectively. 18 Note 11. Subsequent Events In May 2026, we entered into a new lease agreement for corporate offices in New York City, New York. The lease is expected to commence in the third quarter of 2026, with an initial term of 18 years and includes options to extend the term for up to an additional 10 years. Total minimum lease payments under the agreement are approximately $ 286 million over the initial lease term. In April 2026, our Board of Directors approved an Employee Stock Purchase Plan, authorizing approximately 2,000,000 shares of our Class A common for future issuances, subject to shareholder approval. 19