The Walt Disney Company reported its second quarter earnings for fiscal 2025 earlier today, highlighting strong increases in domestic parks and experiences, including Disney Cruise Line, and consumer products. The company’s total revenue rose 7% to $23.6 billion, with segment operating income up 15% to $4.4 billion.
Message from CEO Bob Iger:
“Our outstanding performance this quarter—with adjusted EPS(1) up 20% from the prior year driven by our Entertainment and Experiences businesses—underscores our continued success building for growth and executing across our strategic priorities,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “Following an excellent first half of the fiscal year, we have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment. Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year.”
Financial Results for the Quarter:
- Revenues increased 7% for Q2 to $23.6 billion from $22.1 billion in Q2 fiscal 2024
- Income before income taxes increased $2.4 billion for Q2 to $3.1 billion from $0.7 billion in Q2 fiscal 2024
- Total segment operating income(1) increased 15% for Q2 to $4.4 billion from $3.8 billion in Q2 fiscal 2024
- Diluted earnings per share (EPS) for Q2 improved to $1.81 from a loss per share of $0.01 in Q2 fiscal 2024, and adjusted EPS(1) increased 20% for Q2 to $1.45 from $1.21 in Q2 fiscal 2024
Key Points:
- Entertainment: Segment operating income of $1.3 billion, a $0.5 billion increase versus Q2 fiscal 2024
- Direct-to-Consumer operating income increased $289 million to $336 million
- 180.7 million Disney+ and Hulu subscriptions, an increase of 2.5 million versus Q1 fiscal 2025
- 126.0 million Disney+ subscribers, an increase of 1.4 million versus Q1 fiscal 2025
- Linear Networks operating income grew 2%; year-over-year growth includes a comparison to $89 million of operating income in Q2 fiscal 2024 from Star India
- Sports: Segment operating income of $687 million, a decrease of $91 million versus Q2 fiscal 2024
- Higher programming and production costs primarily due to airing three additional College Football Playoff games and an additional NFL game
- Sports revenue increased 5%, reflecting 7% Domestic ESPN revenue growth
- Domestic advertising revenue growth of 29%, reflecting a 16 ppt benefit from a change in format of the College Football Playoff and airing additional College Football Playoff and NFL games
- Sports operating income was adversely impacted by a write-off due to exiting the Venu joint venture
- Experiences: Segment operating income of $2.5 billion, an increase of $0.2 billion versus Q2 fiscal 2024
- Domestic Parks & Experiences operating income grew 13% to $1.8 billion
- Consumer Products operating income grew 14% to $0.4 billion
- Share Repurchases of $1 billion in the quarter, keeping us on pace to repurchase $3 billion for the year
Domestic Parks & Experiences
Disney Experiences – including Disney parks and resorts, Disney Cruise Line, and Disney Vacation Club – generated $2.5 billion in operating income during Q2; up $200 million from Q2 from 2024.
This growth was driven by:
- Higher theme park attendance
- Increased guest spending
- Expanded Disney Cruise Line capacity with the launch of the Disney Treasure
- Improved performance from Disney Vacation Club
Expenses did rise due to Disney Cruise Line fleet expansion and pre-opening costs for upcoming ships with $35 million booked this quarter mostly tied to the Disney Destiny and Disney Adventure, which both start sailing later this year.
International Parks and Experiences
International Parks saw a 23% decline in operating income. Performance at Shanghai Disney Resort and Hong Kong Disneyland was soft, in line with broader economic concerns in China.
Consumer Products
Consumer Products posted a 14% increase in operating income, primarily due to higher licensing revenue.
Looking ahead, Disney says Walt Disney World bookings for the second half of the fiscal year remain “solidly above prior year”, as they expect Experiences operating income to grow 6% to 8% for the full fiscal year.
Bob Iger continues: “Following an excellent first half of the fiscal year, we have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment. Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year.”
