Key Points:
- Streaming turned profitable during Q3, with Disney Plus and Hulu reaching 183 million subs and streaming-related income rising to $346 million.
- Disney’s theme parks, cruise lines and other “experiences” business saw a 13% boost in income, driven by strong performance in the U.S.
- ESPN Unlimited launches August 21 for $30 per month; Disney will wind down Hulu as a separate app.
The Walt Disney Company grew its overall earnings to $23.65 billion during its fiscal third quarter (Q3, coincides with calendar Q2) of the year, boosted by higher interest from subscribers and advertisers in its streaming service and better attendance at its international theme parks.
The company’s revenue increased 2 percent when compared to the $23.16 billion earned during Q3 2024. Income before taxes rose 4 percent to $3.21 billion, while segment operating income increased 8 percent to $4.58 billion. Diluted earings per share, or EPS, rose 16 percent to $1.61.
Disney’s direct-to-consumer, or streaming, business segment posted $6.18 billion in earnings, a 6 percent jump from last year, after logging healthy subscriber growth at Disney Plus and Hulu. Disney ended Q3 with just over 128 million streaming subscribers at Disney Plus after adding 1.8 million customers during the quarter; Hulu grew to around 55 million paying subscribers after adding nearly 800,000 new customers.
Moving forward, Disney said it will stop disclosing subscriber counts and focus instead on revenue growth and engagement, mirroring moves made by peer streaming businesses like Netflix and Roku over the past few months. Disney also said it intends to fully complete the merger of its Disney Plus and Hulu streaming platforms by winding down Hulu as a standalone app; Hulu will continue to exist within Disney Plus, and the company intends to sell separate subscriptions to both brands for the foreseeable future.
Streaming is becoming a bigger part of Disney’s overall business amid an ongoing downturn in its linear broadcast and cable networks segment. Revenue attributed to ABC, the Disney Channel, FX and other linear networks clocked in at $2.27 billion, down 15 percent compared to last year. Segment operating income was down 28 percent on a year-over basis, a direct result of ongoing churn in the cable and satellite TV industry as cord-cutters chip away at Disney’s ability to generate distribution fees and advertising income.
The sports business, which includes ESPN, earned Disney $1.02 billion, up 29 percent compared to last year. ESPN’s domestic operations posted a 7 percent dip in operating income on account of higher costs associated with college sports and National Basketball Association (NBA) rights.
Disney said its forthcoming ESPN streaming plan, called ESPN Unlimited, will launch on August 21 for $30 per month; on Tuesday, ESPN said it will acquire NFL Media and its television channels NFL Network and NFL RedZone in exchange for the NFL taking a 10 percent equity stake in the sports brand.
Disney’s theme parks, cruise lines and other businesses rolled into the “experiences” segment continued to show strength, with segment operating income rising 13 percent to $2.52 billion. Domestic Parks & Experiences — theme parks and Disney’s cruise line business in the U.S. — led the segment, increasing 22 percent to $1.65 billion, aided by higher per capita guest spending and expanded cruise operations.
On Wednesday, Disney CEO Robert Iger reaffirmed the company’s focus on streaming integration, cost efficiency and international expansion in parks and experiences as key strategic priorities moving forward.
Disney’s stock price was down around 3 percent by Wednesday afternoon.
