Jamie Spencer
Disney reported strong fiscal second-quarter results on Wednesday, surpassing Wall Street’s expectations with better-than-expected earnings and revenue growth. The company credited robust subscriber growth for its Disney+ streaming platform, which saw an increase of 1.4 million subscribers, bringing its global total to 126 million.
Positive Subscriber Growth Boosts Disney+
Despite earlier expectations for a decline in Disney+ subscribers during the quarter, the company saw a significant rise, surpassing Wall Street’s forecast of 123.35 million. The growth in subscriptions was accompanied by revenue increases across all three of Disney’s major business segments, contributing to a strong overall performance.
Revenue and Earnings Performance
Disney posted total revenue of $23.62 billion for the quarter, up 7% year-over-year, and adjusted earnings per share (EPS) of $1.45, beating the $1.20 analysts had anticipated. The increase in revenue came largely from higher prices and growing subscriber numbers in Disney’s direct-to-consumer segment, which saw a rise to $6.12 billion, up 8% from the previous year.
Updated Fiscal 2025 Outlook
Disney also raised its fiscal 2025 guidance, now forecasting adjusted EPS of $5.75, a 16% increase from fiscal 2024. This is a more optimistic outlook than its previous forecast of high-single-digit growth. The company’s net income for the quarter surged to $3.28 billion, a sharp rebound from a $20 million loss in the same quarter last year.
Entertainment and Sports Segments
The company’s entertainment segment, which includes TV networks, streaming, and film production, grew 9% year-over-year, bringing in $10.68 billion. Strong ticket sales for films like “Mufasa: The Lion King” and “Moana 2” helped offset underperformance in titles like “Snow White” and “Captain America: Brave New World.” However, the linear TV business continued to underperform, with a 13% decline in revenue to $2.42 billion.
In the sports segment, primarily made up of ESPN, revenue rose 5% to $4.53 billion, driven by higher advertising revenue from additional College Football Playoff games and NFL coverage. Disney now expects operating income growth for ESPN to reach 18% for fiscal 2025, higher than its earlier forecast of 13%.
Theme Parks and Experiences
Disney’s experiences business, which includes its parks, cruises, and resorts, posted a 6% increase in revenue to $8.89 billion. Domestic theme parks saw a 9% increase in revenue, totaling $6.5 billion, while international parks saw a slight 5% dip to $1.44 billion. The increase in domestic park revenue was attributed to higher guest spending and more cruise bookings following the launch of the Disney Treasure cruise ship.
Consumer Products Division
Disney’s consumer products division saw a 4% revenue increase, reaching $949 million, driven by higher licensing revenue from the new video game, Marvel Rivals.
Overall, Disney’s strong quarterly performance and raised outlook reflect the company’s ability to adapt and thrive, even amid challenges in its traditional TV business. The company’s stock saw a nearly 10% increase in early trading following the announcement, signaling strong investor confidence.
