Disney Q1 Earnings: Revenue And EPS Beat, Moana 2 and Mufasa Power Operating Income, 700K Drop In Streaming Subscribers

Walt Disney Co (NYSE: DIS) reported fiscal first-quarter 2025 revenue growth of 5% year-on-year to $24.70 billion, beating the analyst consensus of $24.62 billion. Adjusted EPS of $1.76 beat the analyst consensus of $1.45.

Disney ended the quarter with 178 million Disney+ Core and Hulu subscriptions and 125 million Disney+ Core paid subscribers, a decrease of 0.7 million over the prior quarter.

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Segments: Entertainment revenue (which encompasses traditional TV networks, direct-to-consumer streaming, and films) increased by 9% year over year to $10.87 billion.

Sports revenue (mostly comprised of ESPN) remained flat year over year at $4.85 billion. Experiences revenue (including Disney’s theme parks and consumer products) climbed 3% year over year to $9.42 billion.

In the Entertainment segment, Linear Networks revenue declined by 7% year over year to $2.62 billion, Direct-to-Consumer revenue climbed 9% year over year to $6.07 billion, and Content Sales/Licensing and Other revenue grew by 34% year over year to $2.18 billion.

The combined DTC streaming businesses improved their profitability with an operating income of $293 million on revenue of $6.07 billion (up by 9% year over year).

Moana 2 and Mufasa: The Lion King helped drive $312 million in operating income at Content Sales/Licensing and Other in the quarter.

The average revenue per user for domestic Disney+ customers increased from $7.20 during the September 28 quarter to $7.55 due to a higher mix of customers on its cheaper, ad-supported tier. 

The consolidated operating income grew 31% year over year to $5.06 billion, led by the Entertainment segment’s $1.70 billion, the Sports segment’s $247 million, and the Experiences segment’s $3.11 billion.

Disney generated a quarterly operating cash flow of $3.21 billion (up 47% year over year) and a free cash flow of $739 million (down 17% year over year).

CEO Robert A. Iger flagged outstanding box office performance from its studios, which had the top three movies of 2024, profitability boost of its Entertainment DTC streaming businesses, and the addition of ESPN tile on Disney+.

Outlook: For fiscal 2025, Disney reiterated high-single-digit growth in adjusted earnings per share (EPS) compared to 2024 versus a consensus of $5.41.

The company aims to generate around $15 billion in operating cash flow.

It expects double-digit growth in operating income for the Entertainment segment in fiscal 2025, with an increase in DTC operating income of around $875 million.

Disney expects its Experience segment to see operating income growth of 6%-8% in fiscal 2025.

The company expects its Sports segment to grow 13% in fiscal 2025.

Price Actions: DIS stock is down 0.88% at $112.30 premarket at the last check on Wednesday.

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