The Walt Disney Company Reports First Quarter Earnings for Fiscal 2025
The Disney+ Hotstar service in India had advertising revenue of approximately $15 million in Q1 fiscal 2025 and $165 million in Q1 fiscal 2024.
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 increased 31% for Q1 to $5.1 billion from $3.9 billion in Q1 fiscal 2024 and adjusted EPS 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
Guidance and Outlook:
Star India deconsolidated in Q1:
Our India business will contribute $73 million to Entertainment segment operating income in fiscal 2025, compared to $254 million in the prior year; and $9 million to Sports segment operating income, compared to a $636 million loss in the prior year. Equity loss from the India JV of $33 million in Q1 primarily due to the impact of purchase accounting; for the full year we expect an equity loss of roughly $300 million driven by purchase accounting
Q2 Fiscal 2025:
Entertainment Direct-to-Consumer: Modest decline in Disney+ subscribers compared to Q1
Sports: Segment operating income adversely 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 Entertainment 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 $200 million
“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.”