The Walt Disney Company Reports Fourth Quarter and Full Year Earnings for Fiscal 2025

The Walt Disney Company (NYSE:DIS) today reported earnings for its fourth quarter and full year ended September 27, 2025.

Financial Results for the Quarter and Full Year:

• Revenues in Q4 of $22.5 billion were comparable to Q4 fiscal 2024, and increased 3% for the year to $94.4 billion from $91.4 billion in the prior year.
• Income before income taxes for Q4 increased to $2.0 billion from $0.9 billion in Q4 fiscal 2024, and increased to $12.0 billion for the year from $7.6 billion in the prior year.
• Total segment operating income⁽¹⁾ increased 12% for the year to $17.6 billion from $15.6 billion in the prior year.
• Diluted earnings per share (EPS) for Q4 increased to $0.73 from $0.25 in Q4 fiscal 2024. Adjusted EPS⁽¹⁾ decreased 3% for Q4 to $1.11 from $1.14 in Q4 fiscal 2024. For the year, diluted EPS increased to $6.85 from $2.72 in fiscal 2024, and adjusted EPS⁽¹⁾ increased 19% to $5.93 from $4.97 in fiscal 2024.

Key Points:

• Total segment operating income⁽¹⁾ decreased 5% for Q4 to $3.5 billion from $3.7 billion in Q4 fiscal 2024
• Entertainment: Full year segment operating income increased 19% to $4.7 billion. Q4 segment operating income of $691 million, a decrease of $376 million compared to the prior-year quarter, driven by theatrical slate comparisons. For Q4:
  • Direct-to-Consumer revenue increased 8%, net of an adverse impact of 2 ppts as Disney+ Hotstar was included in the prior-year quarter's results
  • Direct-to-Consumer operating income increased $99 million to $352 million
  • At the end of the quarter, 196 million Disney+ and Hulu subscriptions, an increase of 12.4 million vs. Q3 fiscal 2025, and 132 million Disney+ subscribers, an increase of 3.8 million vs. Q3 fiscal 2025
  • Linear Networks operating income declined $107 million vs. Q4 fiscal 2024 driven by the Star India transaction, as Star India contributed $84 million to results in Q4 last year
  • Domestic Linear Networks operating income decreased due to lower advertising driven by decreases in viewership and political advertising (political advertising had a $40 million adverse impact on results vs. Q4 fiscal 2024)
  • Content Sales/Licensing and Other declined $368 million vs. Q4 fiscal 2024, reflecting the record theatrical performances of Inside Out 2 and Deadpool & Wolverine in the prior-year quarter
• Sports: Q4 segment operating income of $911 million, a decrease of $18 million compared to the prior-year quarter. For Q4:
  • Domestic ESPN operating income declined 3% vs. the prior-year quarter, as higher marketing and programming and production costs were partially offset by higher advertising and subscription and affiliate revenues
  • Domestic advertising revenue increased 8%
• Experiences: Record full year segment operating income of $10.0 billion, an increase of $723 million compared to the prior year. Record Q4 segment operating income of $1.9 billion, an increase of $219 million compared to the prior-year quarter. For Q4:
  • International Parks & Experiences operating income grew 25% to $375 million
  • Domestic Parks & Experiences operating income grew 9% to $920 million

Guidance and Outlook⁽¹⁾:

• Q1 Fiscal 2026:
  • Entertainment:
    • DTC SVOD operating income⁽²⁾ of approximately $375 million
    • Theatrical slate comparisons to drive an adverse impact to segment operating income of $400 million compared to Q1 fiscal 2025
    • Lower political advertising revenue of $140 million compared to Q1 fiscal 2025
    • Unfavorable comparison to $73 million of Star India operating income in Q1 fiscal 2025
  • Experiences:
    • $90 million in pre-opening expenses at Disney Cruise Line, driven by the Disney Destiny and Disney Adventure
    • $60 million in dry dock expenses at Disney Cruise Line
• Fiscal Year 2026:
  • Entertainment:
    • Double digit percentage segment operating income growth compared to fiscal 2025, weighted to the second half of the year
    • Operating margin of 10% for Entertainment DTC SVOD⁽²⁾
  • Sports:
    • Low-single digit percentage segment operating income growth compared to fiscal 2025, with growth weighted to Q4 reflecting the timing of rights expenses, which adversely impacts year-over-year comparability in Q2 and Q3
  • Experiences:
    • High-single digit percentage growth in segment operating income compared to fiscal 2025, weighted to the second half of the year
    • $160 million in pre-opening expenses, driven by the Disney Adventure and Disney Destiny
    • $120 million in dry dock expenses
    • $24 billion in content investment across Entertainment and Sports
  • Double digit adjusted EPS⁽¹⁾ growth compared to fiscal 2025
  • $19 billion in cash provided by operations⁽²⁾
  • $9 billion of capital expenditures
  • Doubling share repurchases target to $7 billion compared to fiscal 2025
  • The Board has declared a cash dividend of $1.50 per share, payable in two installments of $0.75 per share, payable on January 15, 2026 (record date December 15, 2025) and July 22, 2026 (record date June 30, 2026)
• Fiscal Year 2027:
  • Double digit adjusted EPS⁽¹⁾ growth compared to fiscal 2026

Message From Our CEO:

"This was another year of great progress as we strengthened the company by leveraging the value of our creative and brand assets and continued to make meaningful progress in our direct-to-consumer businesses," said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. "Our strategy, coupled with our portfolio of complementary businesses and a strong balance sheet, enables us to continue investing in high-quality offerings for our consumers and increasing our returns to shareholders, and I'm pleased with our many achievements this fiscal year to position Disney for the future."

SUMMARIZED FINANCIAL RESULTS

The following table summarizes fourth quarter and full year results for fiscal 2025 and 2024:

SUMMARIZED SEGMENT FINANCIAL RESULTS

The following table summarizes fourth quarter and full year segment revenue and operating income for fiscal 2025 and 2024:

DISCUSSION OF FOURTH QUARTER SEGMENT RESULTS

Star India

On November 14, 2024, the Company and Reliance Industries Limited (RIL) formed a joint venture (India joint venture) that combined the Company's Star-branded and other general entertainment and sports television channels and Disney+ Hotstar direct-to-consumer service in India (Star India) with certain media and entertainment businesses controlled by RIL (the Star India Transaction). RIL has an effective 56% controlling interest in the joint venture with 37% held by the Company and 7% held by a third party investment company.

The Company recognizes its 37% share of the India joint venture's results in "Equity in the income of investees." Star India results through November 14, 2024 were consolidated in the Company's financial results.

Entertainment

Revenue and operating income for the Entertainment segment were as follows:

The decrease in Entertainment operating income in the current quarter compared to the prior-year quarter was due to lower results at Content Sales/Licensing and Other and Linear Networks, partially offset by an increase at Direct-to-Consumer.

Linear Networks

Linear Networks revenues and operating income were as follows:

Domestic

Domestic operating income in the current quarter decreased compared to the prior-year quarter due to:

• A decline in advertising revenue due to lower rates and a decrease in average viewership. The decrease in advertising revenue reflected lower political advertising and the comparison to the Emmy Awards show, which aired in the prior-year quarter.
• Lower affiliate revenue attributable to fewer subscribers, partially offset by higher effective rates
• A decrease in programming and production costs driven by lower average cost non-scripted programming, partially offset by higher costs for scripted programming including more original content. Lower average cost non-scripted programming included the comparison to the airing of the Emmy Awards show and political news coverage in the prior-year quarter.

International

The decrease in international operating income was due to the Star India Transaction.

Direct-to-Consumer

Direct-to-Consumer revenues and operating income were as follows:

The increase in operating income was due to:

• Subscription revenue growth attributable to:
  • Higher effective rates, reflecting increases in pricing
  • An increase in subscribers
  • The absence of Star India subscription revenue in the current quarter due to the Star India Transaction
• An increase in programming and production costs reflecting:
  • Higher subscriber-based license fees attributable to rate increases for Hulu Live TV programming and more subscribers to bundles with third-party offerings
  • An increase in hours of content available on our services
  • A decrease from the Star India Transaction
• Higher marketing costs
• An increase in technology and distribution costs
• Advertising revenue was comparable to the prior-year quarter as an increase in impressions was offset by lower rates and the absence of Star India advertising revenue

The following tables and related discussion are on a sequential quarter basis.

Paid subscribers at:

Average Monthly Revenue Per Paid Subscriber for the quarter ended:

Domestic Disney+ average monthly revenue per paid subscriber was comparable to the prior sequential quarter as higher advertising revenue was offset by the impact of subscriber mix shifts.

International Disney+ average monthly revenue per paid subscriber increased from $7.67 to $8.00 due to favorable impacts from foreign exchange and subscriber mix shifts.

Hulu SVOD Only average monthly revenue per paid subscriber decreased from $12.40 to $12.20 due to the impact of subscriber mix shifts.

Hulu Live TV + SVOD average monthly revenue per paid subscriber decreased from $100.27 to $100.02 due to lower advertising revenue.

Content Sales/Licensing and Other

Content Sales/Licensing and Other revenues and operating income (loss) were as follows:

The decrease in operating results was due to lower theatrical distribution results, partially offset by a decrease in film cost impairments. The current quarter reflected the release of The Fantastic Four: First Steps, The Roses and Freakier Friday and the carry-over performance of Lilo & Stitch, while the prior-year quarter included the release of Deadpool & Wolverine and the carry-over performance of Inside Out 2.

Sports

Sports revenues and operating income (loss) were as follows:

Domestic ESPN

The decrease in domestic ESPN operating income in the current quarter compared to the prior-year quarter reflected:

• Higher marketing costs due to the August 2025 launch of the ESPN direct-to-consumer service
• An increase in programming and production costs due to contractual rate increases and costs for new sports rights
• Advertising revenue growth due to an increase in impressions and higher rates
• An increase in subscription and affiliate revenue reflecting higher effective rates and the comparison to the temporary suspension of carriage with an affiliate in the prior-year quarter, partially offset by fewer subscribers

ESPN International

The improvement in ESPN international operating results in the current quarter compared to the prior-year quarter was attributable to higher affiliate revenue due to an increase in effective rates, partially offset by fewer subscribers.

Experiences

Experiences revenues and operating income were as follows:

Domestic Parks and Experiences

Operating income at our domestic parks and experiences increased compared to the prior-year quarter due to growth at Disney Cruise Line attributable to an increase in passenger cruise days, partially offset by higher fleet expansion costs, both reflecting the launch of the Disney Treasure in the first quarter of the current year.

International Parks and Experiences

International parks and experiences' operating results increased compared to the prior-year quarter, primarily due to growth at Disneyland Paris. The increase at international parks and experiences was attributable to:

• Volume growth due to an increase in attendance
• An increase in guest spending
• Higher costs attributable to new guest offerings

Consumer Products

The increase in operating income at consumer products was due to higher licensing revenue.

OTHER FINANCIAL INFORMATION

Corporate and Unallocated Shared Expenses

Corporate and unallocated shared expenses decreased $27 million for the quarter, from $408 million to $381 million, due to the timing of allocations to the segments.

Restructuring and Impairment Charges

Restructuring and impairment charges (benefits) were as follows:

Interest Expense, net

Interest expense, net was as follows:

The decrease in interest expense was due to lower average debt balances and rates.

The decrease in interest income, investment income and other was due to an unfavorable comparison related to pension and postretirement benefit costs, other than service cost.

Equity in the Income of Investees

Equity in the income of investees was as follows:

Income Taxes

The effective income tax rate was as follows:

The effective income tax rate in the current and prior-year quarters reflected an unfavorable impact of approximately 5 percentage points and 18 percentage points, respectively from impairments that are not tax deductible.

Noncontrolling Interests

Net income attributable to noncontrolling interests was as follows:

The increase in net income attributable to noncontrolling interests was due to improved results at National Geographic.

Net income attributable to noncontrolling interests is determined on income after royalties and management fees, financing costs and income taxes, as applicable.

FULL YEAR CASH FLOW

Cash from Operations

Cash provided by operations and free cash flow were as follows:

Cash provided by operations increased $4.1 billion to $18.1 billion in the current year from $14.0 billion in the prior year driven by:

• Lower tax payments in the current year compared to the prior year reflecting:
  • Deferral of payments for fiscal 2025 U.S. federal and California state income tax liabilities until October 2025 pursuant to relief related to the 2025 wildfires in California
  • Payment in fiscal 2024 of U.S. federal and California state income tax liabilities related to fiscal 2023 that had been deferred pursuant to relief related to 2023 winter storms in California
• Lower spending on content at Entertainment due to the Star India Transaction
• Higher operating income at Experiences

Capital Expenditures

Investments in parks, resorts and other property were as follows:

Capital expenditures increased to $8.0 billion from $5.4 billion due to higher spending on cruise ship fleet expansion and, to a lesser extent, on new theme park attractions at the Experiences segment.

Depreciation Expense

Depreciation expense was as follows:

ENTERTAINMENT DTC PRODUCT DESCRIPTIONS AND KEY DEFINITIONS

Entertainment DTC Product offerings

In the U.S., Disney+ and Hulu SVOD Only are each offered as a standalone service or as part of various bundled offerings, which may include one of the ESPN DTC plans. Hulu Live TV + SVOD includes Disney+ and ESPN Select. Disney+ is available in more than 150 countries and territories outside the U.S. Depending on the market, our services can be purchased on our websites or through third-party platforms/apps or are available via wholesale arrangements.

Paid subscribers for Entertainment DTC services

Paid subscribers for Entertainment DTC services reflect subscribers for which we recognized subscription revenue. Certain product offerings provide the option for an extra member to be added to an account (extra member add-on). These extra members are not counted as paid subscribers. Subscribers cease to be a paid subscriber as of their effective cancellation date or as a result of a failed payment method. Subscribers to bundled offerings in the U.S. are counted as a paid subscriber for each of the Company's services included in the bundled offering and subscribers to Hulu Live TV + SVOD are counted as one paid subscriber for each of the Hulu Live TV + SVOD and Disney+ services. Subscribers include those who receive an entitlement to a service through wholesale arrangements, including those for which the service is available to each subscriber of an existing content distribution tier. When we aggregate the total number of paid subscribers across our Entertainment DTC streaming services, we refer to them as paid subscriptions.

International Disney+

International Disney+ includes the Disney+ service outside the U.S. and Canada.

Average Monthly Revenue Per Paid Subscriber for Entertainment DTC services

Hulu average monthly revenue per paid subscriber is calculated based on the average of the monthly average paid subscribers for each month in the period. The monthly average paid subscribers is calculated as the sum of the beginning of the month and end of the month paid subscriber count, divided by two. Disney+ average monthly revenue per paid subscriber is calculated using a daily average of paid subscribers for the period. Revenue includes subscription fees, advertising (excluding revenue earned from selling advertising spots to other Company businesses), premium and feature add-on revenue and extra member add-on revenue. Advertising revenue generated by content on one DTC streaming service that is accessed through another DTC streaming service by subscribers to both streaming services is allocated between both streaming services. The average revenue per paid subscriber is net of discounts on offerings that carry more than one service. Revenue is allocated to each service based on the relative retail or wholesale price of each service on a standalone basis. Hulu Live TV + SVOD revenue is allocated to the SVOD services based on the wholesale price of the Hulu SVOD Only, Disney+ and ESPN Select bundled offering. In general, wholesale arrangements have a lower average monthly revenue per paid subscriber than subscribers that we acquire directly or through third-party platforms.

NON-GAAP FINANCIAL MEASURES

This earnings release presents diluted EPS excluding certain items (also referred to as adjusted EPS), total segment operating income and free cash flow. This earnings release also presents forward-looking Entertainment DTC SVOD operating income and operating margin (operating income divided by revenue). Diluted EPS excluding certain items, total segment operating income, free cash flow and Entertainment DTC SVOD operating income are important financial measures for the Company but are not financial measures defined by GAAP.

These measures should be reviewed in conjunction with the most comparable GAAP financial measures and are not presented as alternative measures of diluted EPS, income before income taxes, cash provided by operations or Entertainment segment operating income as determined in accordance with GAAP. Diluted EPS excluding certain items, total segment operating income, free cash flow and Entertainment DTC SVOD operating income as we have calculated them may not be comparable to similarly titled measures reported by other companies.

Our definitions and calculations of diluted EPS excluding certain items, total segment operating income and free cash flow, as well as quantitative reconciliations of each of these measures to the most directly comparable GAAP financial measure, are provided below. In addition, our definition of Entertainment DTC SVOD operating income is provided below.

The Company is not providing the forward-looking measure for diluted EPS or Entertainment segment operating income (and related margin), which are the most directly comparable GAAP measures to diluted EPS excluding certain items and Entertainment DTC SVOD operating income (and related margin), respectively, or quantitative reconciliations of forward-looking diluted EPS excluding certain items and Entertainment DTC SVOD operating income (and related margin) to those most directly comparable GAAP measures. The Company is unable to predict or estimate with reasonable certainty the ultimate outcome of certain significant items required for such GAAP measures without unreasonable effort. Information about other adjusting items that is currently not available to the Company could have a potentially unpredictable and significant impact on future GAAP financial results.

Diluted EPS excluding certain items

The Company uses diluted EPS excluding (1) certain items affecting comparability of results from period to period and (2) amortization of TFCF and Hulu intangible assets, including purchase accounting step-up adjustments for released content, to facilitate the evaluation of the performance of the Company's operations exclusive of these items, and these adjustments reflect how senior management is evaluating segment performance.

The Company believes that providing diluted EPS exclusive of certain items impacting comparability is useful to investors, particularly where the impact of the excluded items is significant in relation to reported earnings and because the measure allows for comparability between periods of the operating performance of the Company's business and allows investors to evaluate the impact of these items separately.

The Company further believes that providing diluted EPS exclusive of amortization of TFCF and Hulu intangible assets associated with the acquisition in 2019 is useful to investors because the TFCF and Hulu acquisition was considerably larger than the Company's historic acquisitions with a significantly greater acquisition accounting impact.

The following table reconciles reported diluted EPS to diluted EPS excluding certain items for the fourth quarter:

The following table reconciles reported diluted EPS to diluted EPS excluding certain items for the year:

Total segment operating income

The Company evaluates the performance of its operating segments based on segment operating income, and management uses total segment operating income (the sum of segment operating income from all of the Company's segments) as a measure of the performance of operating businesses separate from non-operating factors. The Company believes that information about total segment operating income assists investors by allowing them to evaluate changes in the operating results of the Company's portfolio of businesses separate from non-operational factors that affect net income, thus providing separate insight into both operations and other factors that affect reported results.

The following table reconciles income before income taxes to total segment operating income:

Free cash flow

The Company uses free cash flow (cash provided by operations less investments in parks, resorts and other property), among other measures, to evaluate the ability of its operations to generate cash that is available for purposes other than capital expenditures. Management believes that information about free cash flow provides investors with an important perspective on the cash available to service debt obligations, make strategic acquisitions and investments and pay dividends or repurchase shares.

The following table presents a summary of the Company's consolidated cash flows:

The following table reconciles the Company's consolidated cash provided by operations to free cash flow:

Entertainment DTC SVOD operating income

Entertainment DTC SVOD operating income consists of operating income for the Direct-to-Consumer line of business at the Entertainment segment excluding virtual multichannel video programming distributor services reported in the Direct-to-Consumer line of business. Operating margin for Entertainment DTC SVOD is calculated as operating income divided by revenue.

The Company uses Entertainment DTC SVOD operating income (and related margin) as a measure of the performance of our Entertainment DTC SVOD services and we believe Entertainment DTC SVOD operating income (and related margin) assists investors by allowing them to evaluate the performance of these DTC SVOD services.

FORWARD-LOOKING STATEMENTS

Certain statements and information in this earnings release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our expectations, beliefs, plans, financial prospects, trends or outlook and guidance; financial or performance estimates and expectations (including estimated or expected earnings, operating income, margins, costs, expenses, impact of certain items and timing) and expected drivers; direct-to-consumer prospects, returns to shareholders, including share repurchases, strategic priorities and initiatives and future investments; and other statements that are not historical in nature. Any information that is not historical in nature included in this earnings release is subject to change. These statements are made on the basis of management's views and assumptions regarding future events and business performance as of the time the statements are made. Management does not undertake any obligation to update these statements.

Actual results may differ materially from those expressed or implied. Such differences may result from actions taken by the Company, including restructuring or strategic initiatives (including capital investments, asset acquisitions or dispositions, new or expanded business lines or cessation of certain operations), our execution of our business plans (including the content we create and IP we invest in, our pricing decisions, our cost structure and our management and other personnel decisions), our ability to quickly execute on cost rationalization while preserving revenue, the discovery of additional information or other business decisions, as well as from developments beyond the Company's control, including:

• the occurrence of subsequent events;
• deterioration in domestic and global economic conditions or failure of conditions to improve as anticipated;
• deterioration in or pressures from competitive conditions, including competition to create or acquire content, competition for talent and competition for advertising revenue;
• consumer preferences and acceptance of our content, offerings, pricing model and price increases, and corresponding subscriber additions and churn, and the market for advertising sales on our DTC streaming services and linear networks;
• health concerns and their impact on our businesses and productions;
• international, including tariffs and other trade policies, political or military developments;
• regulatory and legal developments;
• technological developments;
• labor markets and activities, including work stoppages;
• adverse weather conditions or natural disasters; and
• availability of content.

Such developments may further affect entertainment, travel and leisure businesses generally and may, among other things, affect (or further affect, as applicable):

• our operations, business plans or profitability, including direct-to-consumer profitability;
• demand for our products and services;
• the performance of the Company's content;
• our ability to create or obtain desirable content at or under the value we assign the content;
• the advertising market for programming;
• taxation; and
• performance of some or all Company businesses either directly or through their impact on those who distribute our products.

Additional factors are set forth in the Company's most recent Annual Report on Form 10-K, including under the captions "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business," subsequent quarterly reports on Form 10-Q, including under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," and subsequent filings with the Securities and Exchange Commission.

The terms "Company," "we," and "our" are used in this report to refer collectively to the parent company and the subsidiaries through which our various businesses are actually conducted.

PREPARED EARNINGS REMARKS AND CONFERENCE CALL INFORMATION

In conjunction with this release, The Walt Disney Company will post prepared management remarks (Executive Commentary) at www.disney.com/investors and will host a conference call today, November 13, 2025, at 8:30 AM EST/5:30 AM PST via a live Webcast. To access the Webcast go to www.disney.com/investors. The Webcast replay will also be available on the site.