The Walt Disney Company exceeded Wall Street expectations during the company’s most recent financial earnings period, spurred by an uptick in streaming subscribers to its Disney Plus and Hulu businesses, strong interest in sports and higher box office ticket sales.
Overall revenue was $23.62 billion, an increase of 7 percent compared to Disney’s second quarter (Q2, coincides with calendar Q1) of 2024. Sequentially, Disney’s revenue was down nearly 14 percent from the $27.4 billion earned during Q1 (calendar Q4 2024).
Entertainment revenue was $10.7 billion, up 9 percent compared to the prior year and driven primarily by stronger interest in the company’s streaming products. Disney’s direct-to-consumer revenue, which includes income from Disney Plus, ESPN Plus and Hulu, rose to $6.12 billion during Q2, up 8 percent.
Disney counted more than 126 million global streaming subscribers to Disney Plus, of which 57.8 million are located in the U.S. and Canada. At Hulu, more than 50.3 million customers are paying for access to the service’s on-demand category, up 3 percent on a year-over basis. Another 4.4 million streamers are paying for a version of Hulu that includes live television channels — a business that is slated to merge with Fubo at some point in the future. Live TV subscribers dropped 4 percent compared to Q2 2024.
Linear revenue — money earned from Disney’s broadcast and cable television operations — earned $2.42 billion, down 13 percent. Most of Disney’s television income came from its domestic operations, which include ABC, the Disney Channel, FX and National Geographic. Domestic linear revenue was $2.2 billion, down 3 percent.
Disney said higher programming rates charged to cable and satellite companies offset an increase in churn across the pay TV ecosystem, but fewer cable and satellite viewers also impacted Disney’s ability to sell advertising against its linear TV networks.
Sports, which previously accounted for an outsized amount of Disney’s linear revenue, is now counted as a separate line item, with ESPN drawing $4.53 billion in revenue on its own, up 8 percent. Disney operates many of its ESPN channels as a joint venture with Hearst Television, while ESPN Plus and certain ESPN digital properties are wholly owned.
Income attributed to ESPN was down 17 percent to $648 million, which the company attributed to higher programming and production costs associated with NFL and college football games. Sports-related income may have been lower had stronger interest in advertising not made up some of the difference, Disney said.
While Disney’s earnings were positive from a revenue standpoint and something of a mixed bag on income, Wall Street rewarded the company by sending its stock price up as much as 10 percent during the trading day on Wednesday.
During a conference call with reporters and investors, Disney said it will reinvest in its theme parks experiences by opening a new park in Abu Dhabi, its seventh amusement park and fifth outside North America.
“This seventh Disney theme park resort will rise from the shores of this land in spectacular fashion, blending wonderful Disney stories and characters with the cultures and tastes of this country and this region,” Disney CEO Bob Iger said. “It will combine contemporary architecture and cutting-edge technology with the timeless magic of Disney to offer guests deeply immersive experiences in unique and modern ways.”
