Key Takeaways
- Disney’s Q2 FY2025 revenue came in at $25.17 B, beating the $24.78 B consensus and lifting premarket shares ~5%.
- Adjusted EPS was $1.57 (vs. ~$1.49 expected); GAAP net income fell to $2.47 B from $3.4 B a year ago.
- Experiences (parks & cruises) generated $9.5 B, up 7% YoY; global attendance rose 2% while domestic visits slipped 1% and international traffic softened.
- Guest spending increased; CFO Hugh Johnston said demand stays healthy despite fuel‑price and geopolitical worries.
- Entertainment segment revenue rose 10% to $11.72 B, aided by the Fubo deal, higher subscription/affiliate fees (+14%), ad revenue (+5%), and strong box‑office titles.
- Sports segment revenue grew 2% to $4.61 B; ESPN’s direct‑to‑consumer app offset linear‑TV declines, though costs rose from new sports rights.
- Guidance: FY2026 adjusted earnings growth ~12%; share‑repurchase target raised to at least $8 B; Q3 segment incoming ≈$5.3 B; FY2027 double‑digit earnings growth anticipated.
- New CEO Josh D’Amaro stressed IP investment and technology‑driven storytelling as growth levers, acknowledging recent layoffs and political pressure around Jimmy Kimmel.
Disney reported its fiscal second quarter (ended March 28) with revenue of $25.17 billion, surpassing the $24.78 billion analysts had projected. The beat sent premarket shares up roughly 5 %. Adjusted earnings per share came in at $1.57, slightly above the consensus estimate of $1.49, while GAAP net income declined to $2.47 billion ($1.27 per share) from $3.4 billion ($1.81 per share) a year earlier, reflecting higher costs and one‑time items such as ESPN’s NFL Network acquisition.
The Experiences segment, which encompasses Disney’s theme parks and cruise line, posted $9.5 billion in revenue, a 7 % increase year‑over‑year. Global guest attendance grew 2 %, but domestic park visitation slipped 1 % compared with the prior year, a trend Disney attributed to softer international traffic at its U.S. parks. Despite broader macro‑economic headwinds—including surging oil prices linked to the U.S.–Israel‑Iran tensions in late February—CFO Hugh Johnston told CNBC that consumer demand remained robust, noting strong bookings for the second half of the year and higher per‑guest spending during the quarter.
Disney’s Entertainment segment, covering traditional TV, streaming, and theatrical releases, generated $11.72 billion, up 10 % from the same period a year ago. The growth was bolstered by a 4 % contribution from the closed Fubo deal, a 14 % rise in subscription and affiliate fees (driven by recent streaming price hikes), and a 5 % increase in advertising revenue, partly due to higher streaming impressions. Box‑office successes such as “Avatar: Fire and Ash” and “Zootopia 2” also lifted the segment. The company ceased disclosing detailed linear‑TV and streaming subscriber breakdowns, reflecting the ongoing shift from legacy TV to direct‑to‑consumer platforms.
In the Sports segment, revenue rose 2 % to $4.61 billion, supported by higher subscription and affiliate fees and the NFL media agreement. However, costs increased year‑over‑due to contract rate hikes and expenses for new sports rights. ESPN’s direct‑to‑consumer streaming app, launched in August, emerged as a bright spot, with digital subscriber revenue more than compensating for declines in the traditional TV ecosystem.
Looking ahead, Disney raised its FY2026 outlook, projecting adjusted earnings growth of about 12 % and expanding its share‑repurchase program to at least $8 billion (up from the previously announced $7 billion). The company expects third‑quarter total segment incoming of roughly $5.3 billion and anticipates double‑digit adjusted earnings growth for FY2027. Under new CEO Josh D’Amaro—who took over in March after succeeding Bob Iger—the strategic focus centers on investing in intellectual property and advancing storytelling technology to further accelerate the theme‑park and streaming businesses. D’Amaro acknowledged the recent round of layoffs and the political scrutiny surrounding late‑night host Jimmy Kimmel, but emphasized that IP‑driven innovation and tech enhancements remain the core engines for future growth.