The Walt Disney Company reported its first quarter earnings, ending December 27th 2025, highlighting record revenue for their Experiences segment, leading the company’s performance as its streaming and entertainment divisions saw softer results.
Message from CEO, Bob Iger
“We are pleased with the start to our fiscal year, and our achievements reflect the tremendous progress we’ve made. We delivered strong box office performance in calendar year 2025 with billion-dollar hits like Zootopia 2 and Avatar: Fire and Ash, franchises that generate value across many of our businesses. As we continue to manage our company for the future, I am incredibly proud of all that we’ve accomplished over the past three years.”
Financial Results for the Quarter:
- Revenues increased 5% for the quarter to $26.0 billion from $24.7 billion in Q1 fiscal 2025.
- Income before income taxes for Q1 of $3.7 billion was comparable to Q1 fiscal 2025.
- Total segment operating income decreased 9% for the quarter to $4.6 billion from $5.1 billion in Q1 fiscal 2025.
- Diluted earnings per share (EPS) for Q1 decreased to $1.34 from $1.40 in Q1 fiscal 2025. Adjusted EPS for Q1 decreased to $1.63 from $1.76 in Q1 fiscal 2025.
Key Points:
- Entertainment: Revenue increased 7% compared to Q1 fiscal 2025. Operating income (OI) declined $0.6 billion to $1.1 billion, resulting in Entertainment segment operating margin of 9.5%, as higher programming and production and marketing costs in the quarter more than offset an increase in subscription and affiliate fees and higher theatrical revenue
- SVOD revenue increased 11% compared to Q1 fiscal 2025 (growth reflects a 1 ppt adverse impact from the inclusion of Star India revenue in the prior-year quarter). SVOD operating income increased $189 million to $450 million, resulting in SVOD operating margin of 8.4%
- Segment advertising revenue decreased 6% compared to Q1 fiscal 2025, and reflects a net adverse impact of 11 ppts from the inclusion of Star India and higher political advertising in Q1 fiscal 2025 and Fubo in Q1 fiscal 2026
- Sports: Q1 segment OI of $191 million, a decrease of $56 million compared to Q1 fiscal 2025, as advertising revenue growth of 10% was more than offset by higher programming and production costs and a decrease in subscription and affiliate fees
- Temporary suspension of YouTube TV carriage had an adverse impact to segment operating income of approximately $110 million
- Experiences: Record quarterly revenue of $10.0 billion and segment OI of $3.3 billion
- Domestic Parks & Experiences OI growth of 8%
- Attendance at domestic parks was up 1% in the quarter, and per capita spending was up 4%
Higher Guest Spending at the Parks (& at Sea)
Operating income at Disney’s domestic parks and experiences increased compared to the prior-year quarter primarily due to:
- Higher volumes attributable to increased passenger cruise days, attendance and occupied room nights. Additional passenger cruise days reflected the launches of the Disney Treasure in December 2024 and the Disney Destiny in November 2025. The increase in attendance benefited from the comparison to the adverse impact of Hurricane Milton in the prior-year quarter.
- An increase in guest spending
- Higher costs due to new guest offerings, including the fleet expansion at Disney Cruise Line, inflation and increased operations support costs
Disney’s international parks posted stronger attendance growth at 6%, up from 4% in the prior year quarter. Per capita guest spending at international properties increased 2% (versus 3% growth in the prior year period).
In total, Disney Experiences posted $10 billion in Q1 revenue, and $3.3 billion in operating income, both up 6% year over year. The Walt Disney Company’s CFO, Hugh Johnston, said Walt Disney World bookings are up 5% for the full year, calling the quarter “great” for the resort.
Looking ahead, Disney expects modest operating income growth from their Experiences segment in the second quarter. The company cited factors including international visitation headwinds at domestic parks, pre-launch costs for the Disney Adventure cruise ship, and pre-opening costs for World of Frozen at Disneyland Paris.
