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Moana 2 helped float a solid fiscal first quarter for Disney with studio profit riding the strong box office of the animated sequel that’s topped $1 billion worldwide. The quarter, which ended in December, also featured Mufasa: The Lion King at $653 million. The prior-year period included The Marvels and Wish.
The studio division swung to a $312 million profit from a year-earlier loss of $244 million on revenue up 34% to $2.2 billion. Last quarter, Inside Out 2 and Deadpool & Wolverine made a splash. Analyst Alan Gould has noted that the biggest fundamental change at Disney of late is that “the studio is executing creatively again,” and studio success can lead to higher consumer products sales, theme park interest and streaming engagement.
Streaming turned another profit last quarter, as did sports led by ESPN. Domestic linear networks saw revenue and profit both flat from the year before at, respectively, $2.2 billion and $837 million. Key at Disney, Gould has said, is that DTC revenue and profit are growing more quickly than its legacy business is declining.
The Entertainment segment (studio, streaming and linear) saw profit surge 95% to $1.7 billion on revenue of $10.9 billion, up 9%.
Total revenue across Disney rose 5% to $25.7 billion with a handful of metrics, including adjusted earnings per share, topping Wall Street estimates. Net income rose to $2.64 billion from $2.15 billion.
“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 CEO Robert Iger.
“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.”
Iger will lead a call with analysts at 8:30 ET to discuss the numbers and anything else new — like the end of Venu, the sports streaming joint venture with Warner Bros. Discovery and Fox. The service, originally set to launch last fall, was derailed by a Fubo antitrust lawsuit and headed to court.
In a surprise move last month, the partners announced a $220 million settlement with Fubo, ending that litigation but, days later, said they would shutter Venu anyway. As this played out, Disney unveiled plans to merge its Hulu + Live TV with Fubo. Wall Street is interested in any details around that transaction.
In its report today, Disney anticipated a $50 million hit in the current quarter to exit Venu.
Another major move was the sale of Star India in November. That means last quarter only includes a month and a half of Star, which impacts year-over-year comparisons in streaming, linear TV and sports. Disney contributed its Star-branded channels and Disney+ Hotstar service in India to a venture with Reliance Industries, retaining a 37% interest. It noted a $143 million impairment charge on the transaction.
Streaming Profit
Streaming saw revenue up 9% to $6.1 billion in Q1 and swung to an operating profit of $293 million from a loss of $138 million a year ago. Subscriber price increases and higher advertising sales at Disney+ and Hulu offset lost revenue from Star India. Programming costs fell versus the year earlier when Star broadcast the Cricket World Cup.
DTC advertising rose 16%, excluding Disney+Hotstar.
Total Disney+ and Hulu subscriptions hit 178 million, up slightly from the previous September quarter.
Disney+ added 800k domestic subscribers from Q4 ending at 56.8 million. Disney+ international eased 2% to 67.8 million subs. So that’s 125m subs for Disney+, down a hair from the previous quarter.
Hulu grew subscribers by 3% to 49 million and Hulu Live TV + SVOD was steady at 4.6 million subs.
Average monthly revenue per subscriber grew for all but streamer Hulu, which was flat.
Disney broke out ESPN+ separately in its sports segment. Paid subscribers fell slightly to 24.9 million from 25.6 million. ESPN+ average monthly revenue per paid subscriber increased from $5.94 to $6.36 due to increases in pricing and higher advertising revenue.
Total sports revenue (mostly ESPN) was flat at $4.85 billion as the division swung to a profit of $247 million from a loss of $103 million.
ESPN revenue rose 8% to $4.81 billion. Domestic ad sales grew 15%. ESPN operating profit rose 15% to $228 million. Domestic earnings were down 9% squeezed by higher programming and production costs for an expanded college football programming rights including one additional College Football Playoff game.
At Experiences, revenue nosed up 3% to $9.4 billion with profit flat at $3.1 billion. Parks have been coming off a slower few quarters last year as attendance softened a bit, coming off an explosive post-Covid rebound.
Domestic parks saw revenue up 2% to $6.4 billion with profit down 5% to $1.98 billion. Hurricane Milton closed Walt Disney World for a day and canceled a cruise ship itinerary. Disney also cited startup expenses from its latest ship Disney Treasure, and inflation.
However, international parks and experiences saw profit jump 28% to $420 million on revenue of $1.3 billion, up 12% on booming attendance.
