Disney Tops Streaming Expectations In Final Subscriber Report; Quarterly Results Otherwise Mixed
Disney‘s strong results in streaming, including a better-than-expected subscriber jump, helped offset a struggling film studio and sluggish ad sales in the company’s fiscal fourth quarter.
In the company’s last quarter of reporting streaming subscribers, the company said the overall tally for Disney+ and Hulu hit 196 million. Disney+, which launched six years ago, nearly to the day, is now at 131.6 million subscribers, split nearly evenly between the U.S. and international.
The gain of 12.4 million from last quarter came in more than 2 million better than Wall Street’s target. Operating income in the direct-to-consumer unit rose $99 million to $352 million, with revenue climbing 8%.
About half of the subscriber gain in the quarter came via wholesale deals, notably the landmark distribution agreement with Charter Communications, CFO Hugh Johnston said in an interview with CNBC.
The launch of ESPN’s newly bulked up streaming service occurred during the quarter, on August 21, but ESPN Chairman Jimmy Pitaro and other Disney execs have maintained that they do not plan to regularly disclose subscriber numbers.
Adjusted earnings per share drifted down to $1.11 from $1.14 in the year-ago period, but they still beat Wall Street analysts’ expectations by six cents. Revenue, though, was flat with a year ago at $22.5 billion and undershot forecasts.
The lack of political ad spending in the 2025 quarter compared with 2024 resulted in a $40 million shortfall, the company said. Studio results in the July-to-September period were hurt by comparisons with the same period a year ago, when Inside Out 2 and Deadpool & Wolverine were making theater turnstiles spin. Content Sales/Licensing and Other revenue fell $368 million as a result. The studio’s bumpy run of late ended last weekend with Predator: Badlands hitting a franchise high in its opening weekend. Marquee titles Zootopia 2 and Avatar: Fire and Ash are arriving for Thanksgiving and Christmas, respectively.
Sports revenue ticked up 2% to just shy of $4 billion, but operating income fell 2%, in part due to expenses related to the debut of the ESPN streaming service. The return of college football and the NFL during the quarter helped ESPN domestic ad revenue increase 8%.
Experiences, the corporate division including the company’s ever-lucrative theme parks, saw a modest year-over-year revenue gain of 6% to $8.77 billion.
The company plans to add two cruise ships to its fleet in the coming months, the Disney Adventure and the Disney Destiny, and warned investors it will incur $160 million in pre-opening expenses and $120 million in dry dock expenses.
Disney’s carriage battle with YouTube TV, which has resulted in a two-week blackout, one of the longest in Disney history, is not reflected in the quarterly report because it began after the September 27 end of the quarter. But CEO Bob Iger and CFO Hugh Johnston could be asked about it during a conference call with analysts.
