The Walt Disney Company, or Disney, is a top American entertainment company. It was founded on October 16, 1923, by Walt Disney and his brother Roy. It began as a small animation studio called Disney Brothers Cartoon Studio. Over time, Disney became famous for family entertainment, creating beloved characters like Mickey Mouse and expanding into movies, TV shows, theme parks, and more.
Today, Disney is a global leader in the entertainment industry, owning big names like ABC, ESPN, Pixar, Marvel, Lucasfilm, and National Geographic. The company continues to grow and innovate, providing a wide range of content and experiences that captivate audiences around the world.
Walt Disney Fiscal Q1 2025
The Walt Disney Company reported earnings for the first fiscal quarter ending December 28, 2024. Both revenue and earnings per share were reported above estimates.
Financial Results:
- Revenue increased by 5% to $24.7 billion compared to $23.5 billion in Q1 fiscal 2024.
- Income before taxes rose by 27% to $3.7 billion.
- Diluted earnings per share (EPS) increased by 35% to $1.40.
- Total segment operating income rose by 31% to $5.1 billion, and adjusted EPS increased by 44% to $1.76.
Key Points:
- Entertainment: Operating income increased by $0.8 billion to $1.7 billion. Direct-to-Consumer operating income grew to $293 million, while Direct-to-Consumer advertising revenue declined by 2%. Excluding Disney+ Hotstar in India, advertising revenue was up by 16%. Disney+ and Hulu subscriptions increased to 178 million, though Disney+ subscribers decreased to 125 million.
- Sports: Operating income increased by $350 million to $247 million, with Domestic ESPN advertising revenue up by 15%.
- Experiences: Operating income was $3.1 billion, comparable to Q1 fiscal 2024, impacted by Hurricanes Milton and Helene. Domestic Parks & Experiences income declined by 5%, while International Parks & Experiences income increased by 28%.
Outlook
Q2 Fiscal 2025:
- Entertainment Direct-to-Consumer: Modest decline in Disney+ subscribers compared to Q1.
- Sports: Segment operating income impacted by approximately $100 million due to college sports and one additional NFL game, and about $50 million from exiting the Venu Sports JV.
- Experiences: Disney Cruise Line pre-opening expense of approximately $40 million.
Fiscal Year 2025:
High-single digit adjusted EPS growth compared to fiscal 2024. Approximately $15 billion in cash provided by operations.
- Entertainment: Double-digit percentage segment operating income growth, with an increase in Direct-to-Consumer operating income of approximately $875 million.
- Sports: 13% segment operating income growth.
- Experiences: 6% to 8% segment operating income growth. Disney Cruise Line pre-opening expense of approximately $200 million.
Boards Statements
Robert A. Iger, CEO of The Walt Disney Company, said the quarter’s results show Disney’s creative and financial strength. During Q1, Disney had top-performing movies, improved the profitability of their streaming services, added an ESPN section on Disney+, and invested in their Experiences segment worldwide. He mentioned that it was a strong start to the fiscal year and that Disney remains confident in their growth strategy.
Impact on the Stock Market
Impact on stock was mixed. Disney had strong Q1 earnings with revenue up 5% to $24.7 billion and an adjusted EPS of $1.76, beating expectations. Hits like “Moana 2” and “Mufasa” helped drive growth in their entertainment and streaming segments.
However, the Q2 outlook shows a slight drop in Disney+ subscribers. This decline could be due to higher sports costs and changes in their India business. Despite this, Disney remains positive about their overall growth strategy for the year.
