Key Financial Data
- Fiscal Q1 Revenue: $26 billion (+5% year-over)
- Q1 Income: $3.69 billion (+1%)
- Q1 Total segment operating income: $4.6 billion (-9%)
- Q1 Free cash flow: -$2.28 billion
- Entertainment revenue: $5.35 billion (+11%)
- Entertainment income: $450 million (+72%)
- Sports revenue: $4.91 billion (+1%)
- Sports income: $191 million (-23%)
- Experiences revenue: $10.01 billion (+6%)
- Experiences income: $3.31 billion (+6%)
- Disney fiscal Q1 2026 coincides with calendar Q4 2025
- Read more media earnings coverage
A two-week dispute with streaming giant YouTube TV impacted the Walt Disney Company’s sports revenue during its fiscal first quarter (Q1) of the year, the company affirmed in its quarterly earnings report on Monday.
The dispute came after Disney demanded more money for its core of linear broadcast and cable networks, including local ABC stations and affiliates, sports multiplex ESPN and entertainment channels like FX, Freeform, National Geographic and Disney Channel.
Rather than acquiesce to Disney’s demands, Google pulled the channels for about two weeks. The channels were restored in mid-November after both sides reached a deal that allows Google to distribute ESPN and other networks in flexible programming packages later this year, and an agreement to include the streaming plan ESPN Unlimited to subscribers with ESPN’s channels in their YouTube TV package.
By then, the damage was done: On Monday, Disney said it subscriber and affiliate fee revenue attributed to ESPN and other linear channels was down on a year-over basis due primarily to the loss of carriage on YouTube TV over those two weeks.
On the entertainment side, operating revenue clocked in at $191 million, down 23 percent, on revenue of $4.91 billion (up 1 percent). Disney said the lower revenue was due primarily to ongoing softness in its advertising business and lower distribution fee earnings due to cord-cutting. Advertising revenue was 6 percent lower compared to last year.
Making good on its promise from last year, Disney did not disclose subscriber figures for its streaming services during Q1, but said its subscription streaming video businesses earned $450 million in operating income on $4.424 billion in revenue during Q1. Operating income was up 72 percent compared to last year, while streaming revenue was 13 percent higher. Those figures don’t include ESPN Plus or ESPN Unlimited, which are reported as part of Disney’s sports business.
Overall, Disney saw its revenue climb 5 percent to $26 billion, with income before taxes up 1 percent to nearly $3.7 billion, primarily attributed to the company’s healthy parks and experiences business, which boosted key financial data points in what was otherwise a mixed bag of earnings on the entertainment and sports side.
Disney’s stock price was down 4 percent from its opening price in mid-afternoon trading on Monday.
Stock Price
“Our results this quarter reflect our hard work and strategic investments across each of our priorities, and I’m incredibly proud of all that we’ve accomplished over the past three years to set Disney on the path to continued growth,” Bob Iger, Disney’s CEO, said on a conference call with investors. “I’m inspired and energized by the opportunities ahead for this wonderful company.”
Disney didn’t offer any insight into who will lead the company when Iger steps down later this year — his contract is up at the end of December, but there are reports that a successor will be named in the coming weeks, and that Iger plans to resign before his contract expires.
According to reports from CNBC and the Wall Street Journal, Disney’s Board of Directors is voting this week on a named successor. Josh D’Amaro, the lead executive in charge of Disney’s theme parks and experiences business, is one of four contenders for the job. Two others, Dana Walden and Alan Bergman, are in charge of the company’s various entertainment units (Walden has a focus on streaming, Bergman on Disney’s production studios).
Jimmy Pitaro, the head of ESPN, was said to be one of the four contenders, but he has effectively removed himself from consideration after expressing positive sentiments about his current role at the company.
Fubo, a streaming service that is majority-owned by Disney, will disclose its quarterly earnings report on Tuesday.
