The Walt Disney Company reported its first quarter earnings for fiscal 2025, which ended December 28th, 2024. The webcast was lead by CEO Bob Iger and CFO Hugh Johnston on Wednesday morning. The last 3 months of Disney’s sales were boosted by box office successes Inside Out 2, Deadpool & Wolverine, and Moana 2; while Disney+ subscribers took a dip -decreasing by 700,000- and domestic theme park revenue took a hit, thanks to Florida’s hurricanes.
Message from CEO Bob Iger:
“Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024; we further improved the profitability of our Entertainment DTC streaming businesses; we took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+; and our Experiences segment demonstrated its enduring appeal as we continue investing strategically across the globe. Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth.”
Financial Results for the Quarter:
- Revenues increased 5% for Q1 to $24.7 billion from $23.5 billion in Q1 fiscal 2024
- Income before income taxes increased 27% for Q1 to $3.7 billion from $2.9 billion in Q1 fiscal 2024
- Diluted earnings per share (EPS) increased 35% for Q1 to $1.40 from $1.04 in Q1 fiscal 2024
- Total segment operating income(1) increased 31% for Q1 to $5.1 billion from $3.9 billion in Q1 fiscal 2024 and adjusted EPS(1) increased 44% for Q1 to $1.76 from $1.22 in Q1 fiscal 2024
Key Points:
- Entertainment: Segment operating income increased $0.8 billion to $1.7 billion
- Direct-to-Consumer operating income increased $431 million to $293 million
- Direct-to-Consumer advertising revenue declined 2%; excluding the Disney+ Hotstar service in India(2), Direct-to-Consumer advertising revenue was up 16% vs. Q1 fiscal 2024
- 178 million Disney+ and Hulu subscriptions, an increase of 0.9 million vs. Q4 fiscal 2024
- 125 million Disney+ subscribers, a decrease of 0.7 million vs. Q4 fiscal 2024
- Content Sales/Licensing and Other operating income increased $536 million to $312 million driven by the performance of Moana 2
- Sports: Segment operating income increased $350 million to $247 million
- Domestic ESPN advertising revenue up 15% vs. Q1 fiscal 2024
- Experiences: Segment operating income of $3.1 billion comparable to Q1 fiscal 2024, reflecting a 6 percentage-point adverse impact to year-over-year growth due to Hurricanes Milton and Helene (~$120 million impact) and pre-opening expenses (~$75 million impact in Q1 fiscal 2025) driven by the launch of the Disney Treasure
- Domestic Parks & Experiences operating income declined 5%, reflecting a 9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses
- International Parks & Experiences operating income increased 28% vs. Q1 fiscal 2024
Domestic Parks
Domestic parks and experiences’ operating results for the current quarter were unfavorably impacted by Hurricane Milton and, to a lesser extent, Hurricane Helene. As a result of Hurricane Milton, Walt Disney World Resort was closed for a day and we canceled a cruise itinerary.
Operating results at our domestic parks and experiences decreased compared to the prior-year quarter due to:
- Higher costs primarily due to the fleet expansion at Disney Cruise Line and inflation
- Lower volumes attributable to declines in attendance, reflecting the impact of the hurricanes
- Increased guest spending
International Parks and Experiences
The increase in operating income at our international parks and experiences was primarily attributable to:
- Growth in guest spending
- Higher volumes primarily attributable to an increase in attendance
- An increase in costs primarily due to new guest offerings
