Disney Lifts Forecast With $1 Billion Streaming Goal, Abu Dhabi Park Deal And More

Walt Disney Co (NYSE: DIS) reported fiscal second-quarter 2025 results on Wednesday. The company reported quarterly revenue growth of 7% year-on-year to $23.62 billion, beating the analyst consensus of $23.14 billion driven by its Entertainment and Experiences businesses. Adjusted EPS of $1.45 beat the analyst consensus of $1.20.

The stock price gained after the earnings were released.

Disney ended the quarter with 180.7 million Disney+ Core and Hulu subscriptions, up by 2.5 million over the prior quarter. The company reported 126.0 million Disney+ Core paid subscribers, an increase of 1.4 million over the preceding quarter.

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According to the report:

• Entertainment revenue (including traditional TV networks, direct-to-consumer streaming, and films) increased by 9% Y/Y to $10.68 billion.
• Sports revenue (mostly comprised of ESPN) rose 5% Y/Y to $4.53 billion. Experiences revenue (including Disney’s theme parks and consumer products) climbed 6% Y/Y to $8.89 billion.
• Linear Networks revenue declined by 13% Y/Y to $2.42 billion.
• Direct-to-Consumer revenue climbed 8% Y/Y to $6.12 billion.
• Content Sales/Licensing and Other revenue grew by 54% Y/Y to $2.15 billion.
• The combined DTC streaming businesses improved their profitability with an operating income of $336 million on revenue of $6.12 billion.
• Consolidated operating income grew 15% Y/Y to $4.44 billion, led by the Entertainment segment’s $1.26 billion, Sports segment’s $687 million, and the Experiences segment’s $2.49 billion.
• The movie division benefited from “Moana 2” and “Mufasa: The Lion King,” Bloomberg reported on Wednesday. 
• Disney generated a quarterly operating cash flow of $6.75 billion (up 84% Y/Y) and a free cash flow of $4.89 billion (up by over 100% Y/Y).

CEO Bob Iger remains optimistic about the company’s direction and outlook for the remainder of the fiscal year.

Disney’s experiences division benefited from visitors to parks in California and Florida, holiday package sales, and the launch of the Disney Treasure ship in December. The entertainment division also benefited from recent price hikes across the company’s streaming services, including Disney+ and Hulu.

Outlook: For fiscal 2025, Disney projected an adjusted EPS of $5.75, an increase of 16% over fiscal 2024 versus a $5.44 analyst estimate (compared to the prior estimate of high-single-digit growth).

It reiterated double-digit growth in operating income for the Entertainment segment in fiscal 2025.

Disney maintained 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.

For the fiscal third quarter, Disney projected a modest increase in Disney+ subscribers compared to the second quarter of fiscal 2025 for the Entertainment Direct-to-Consumer segment.

Expansion: Disney and Miral, a creator of immersive destinations and experiences, announced a deal to build a theme park resort on Yas Island in Abu Dhabi, United Arab Emirates.

Price Actions: DIS stock is up 6.98% at $98.67 premarket at the last check on Wednesday.

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