The Walt Disney Company - Earnings Call - Q2 2025

Executive Summary

• Q2 FY2025 delivered broad-based upside: revenue $23.62B (+7% YoY), GAAP EPS $1.81 vs $(0.01) YoY, and adjusted EPS $1.45 (+20% YoY); total segment operating income rose 15% to $4.44B.
• Results beat Wall Street consensus on revenue, adjusted EPS, and EBITDA, driven by stronger Entertainment (DTC profitability and content sales/licensing) and resilient Experiences; ESPN advertising was robust despite higher sports rights expense (CFP/NFL timing).
• Guidance raised: FY2025 adjusted EPS increased to $5.75 (from $5.30), cash from operations raised to $17B (from $15B); Sports segment OI growth lifted to 18% (from 13%).
• Strategic catalysts: announcement of Disneyland Abu Dhabi (licensed model, no Disney capital), accelerating streaming bundling with ESPN DTC launch and lower churn from integrated Disney+/Hulu experience.

What Went Well and What Went Wrong

• What Went Well

  • Entertainment operating income +61% YoY to $1.26B on DTC profitability ($336M OI) and strong content sales/licensing, including Moana 2 home entertainment and TV/VOD timing.
  • Experiences operating income +9% YoY to $2.49B; domestic Parks & Experiences OI +13% to $1.82B, supported by higher attendance, cruise days (Disney Treasure), and guest spending.
  • Management tone confident: “adjusted EPS up 20%… success building for growth,” with optimism on upcoming slate and ESPN DTC; bookings up 4% in Q3 and 7% in Q4 at Walt Disney World, supporting FY outlook.

• What Went Wrong

  • Sports OI fell 12% YoY to $687M due to higher programming/production costs (additional CFP/NFL games) and a write-off exiting the Venu JV, partially offset by 29% domestic ad growth.
  • International Parks OI declined (Shanghai/Hong Kong) on lower attendance and higher costs; China per-capita spending softness persists, though attendance remains solid.
  • Equity in income of investees fell to $36M (from $141M) driven by India JV losses; linear networks face continued structural pressures internationally post Star India transaction.

Transcript

Operator (participant)

Good day, and welcome to The Walt Disney Company's second quarter 2025 financial results conference call. All participants will be in the surrounding mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note today's event is being recorded. I would now like to turn the conference over to Carlos Gómez, Executive Vice President, Treasurer, and Head of Investor Relations. Please go ahead, sir.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Good morning. It's my pleasure to welcome everyone to The Walt Disney Company's second quarter 2025 earnings call. Our press release, Form 10-Q, and management's posted prepared remarks were issued earlier this morning and are available on our website at www.disney.com/investors. Today's call is being webcast, and a replay and transcript will be made available on our website after the call. Before we begin, please take note of our cautionary statement regarding forward-looking statements on our investor relations website. Certain statements on this call, including those regarding our expectations, beliefs, plans, financial estimates and prospects, trends, outlook, and guidance, and other statements that are not historical, may be forward-looking statements under the securities laws. We make these statements on the basis of our assumptions regarding the future at the time we make them and do not undertake any obligation to provide updates. Forward-looking statements are subject to risks and uncertainties.

Actual results may differ materially from the results expressed or implied in light of a variety of factors. These factors include, among others, economic or industry conditions, competition, execution risks, the market for advertising, our future financial performance, and legal and regulatory developments. Refer to our IR website, the press release issued today, and the risks and uncertainties described in our Form 10-K, Form 10-Q, and other filings with the SEC for more information about key risk factors. A reconciliation of certain non-GAAP measures referred to on this call to the most comparable GAAP measures can be found on our IR website. Joining me this morning are Bob Iger, Disney's Chief Executive Officer, and Hugh Johnston, Senior Executive Vice President and Chief Financial Officer. Following introductory remarks from Bob, we will be happy to take your questions. I will now turn the call over to Bob.

Bob Iger (CEO)

In the 102-year history of The Walt Disney Company, there have been many defining moments and countless achievements. One such moment was the opening of Disneyland in 1955. Now, 70 years later, having entertained 4 billion guests across six Disney theme park destinations around the world, we are celebrating another great moment in our storied history. I am joining you from the United Arab Emirates, where we just announced an agreement to bring a Disney theme park to Abu Dhabi. Disneyland Abu Dhabi will be authentically Disney and distinctly Emirati. It will serve as an oasis of extraordinary Disney entertainment for millions and millions of people in this crossroads of the world, connecting travelers from the Middle East and Africa, India, Asia, Europe, and beyond.

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. 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. As part of our new strategic partnership with the Miral Group of Abu Dhabi, Disney will oversee design, license our IP, and provide operational expertise, while Miral will provide the capital, construction resources, and operational oversight. Our Imagineering team is already hard at work designing this large and very special destination that will become a source of joy and inspiration for generations to come.

This is my third visit to Abu Dhabi in the last nine months, and each time I gain more appreciation and respect for the UAE government, the government of Abu Dhabi, for our partners at Miral, and for the people and the culture of Abu Dhabi. As we prepare to embark on this exciting new addition to our experiences portfolio, we already have more expansion projects underway domestically and around the world than at any time in our history. That includes investing more than $30 billion in our theme parks in Florida and California to enhance our offerings, create jobs, and support the U.S. economy. Our focus must always be on building for tomorrow, as much as it is on managing for today. That eye to the future and driving growth is central to the important work we've done advancing our four strategic priorities.

Looking at our second quarter results, we're making excellent progress. We had a very strong Q2 with adjusted EPS up 20% from the prior year, rounding out a solid first half of fiscal 2025. Our experiences segment delivered strong results this quarter, driven by the outstanding performance from our domestic businesses. Investments in this segment have delivered impressive returns on invested capital, with returns from our experiences businesses at all-time highs. Experiences is obviously a critical business for Disney and also an important growth platform. Despite questions around any macroeconomic uncertainty or the impact of competition, I'm encouraged by the strength and resilience of our business, as evidenced in these earnings and in the second-half bookings at Walt Disney World. Our entertainment business, including movies, television series, news, and sports, continues to generate strong growth. Our feature films continue to enjoy success at the global box office.

Thunderbolts from Marvel Studios opened this past week, and it is currently the number one movie in the world and the best-reviewed Marvel film in the last few years. We are also excited about our upcoming theatrical slate for the remainder of the calendar year, including the live-action Lilo & Stitch, Pixar's Elio, Marvel's The Fantastic Four: First Steps, Freakier Friday, Zootopia 2 from Walt Disney Animation Studios, and the spectacular Avatar: Fire and Ash. We're also quite pleased with the performance of our general entertainment and news programming. Finally, sports viewership trends continue to be healthy. ESPN's Q2 primetime audience, among the key 18-49 demographic, was up 32%, making it ESPN's most watched Q2 in primetime ever.

Driven by ESPN's fantastic programming, including NFL and college football, the NCAA women's basketball tournament, and other exciting events, all of which is giving us optimism as we head into the upfront next week. Meanwhile, we are only a few months away from the launch of ESPN's exciting new direct-to-consumer product offering, and we look forward to sharing pricing and timing details very soon. Overall, our expansive portfolio of high-quality content and programming is enabling us to continue to grow revenue and profitability in our streaming business. Streaming remains a key priority and a core growth platform for Disney. As we move forward, our improvements in the product will continue to enhance the user experience, increase engagement, and reduce churn, thereby enabling us to grow the strategic business at an accelerated rate over time.

This has been an excellent first half of the fiscal year with strong results powered by our disciplined and focused growth strategy. We remain confident about the direction of the company and optimistic about our outlook for the rest of the fiscal year. Hugh and I would be happy to take your questions.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Bob. As we transition to Q&A, we ask that you please try to limit yourselves to one question in order to help us get through as many analysts as possible today. With that, Operator, we are ready for the first question.

Operator (participant)

Yes, sir. As a reminder, if you'd like to ask a question, please press star then one on your telephone keypad. Today's first question comes from Benj Swinburne with Morgan Stanley. Please go ahead.

Benj Swinburne (Managing Director and Head of U.S. Media Research)

Good morning, or good evening, I guess, if you're overseas. Bob, I want to pick up on the streaming commentary you just were talking about. Over the last year plus, you guys have been bringing more Hulu content and sports content into Disney+. You're bringing a flagship in from a bundling perspective. I'm just wondering if you're seeing benefits to this broader content strategy within the Disney+ app. This is obviously a domestic comment, but when you look at engagement, sign-ups, etc., is the broadening out of Disney+ into other areas of content helping the business from a sign-ups, churn, engagement point of view? Is there more ahead that you think can really drive the business?

I just wanted to ask Hugh, because I do not think it was in any of the prepared commentary, the three-year guidance, the double-digit earnings growth in 2026 and 2027, I assume all that is still in place off of the new 2025 higher EPS base. Just wanted to make sure we had that correct. Thanks so much.

Bob Iger (CEO)

Thanks, Ben. To answer your question specifically, the presence of a Hulu embedded in Disney, basically from a user experience perspective, and the addition of sports content is definitely having an impact, definitely having a positive impact. Not only is engagement up, but churn is down and significantly. As we look ahead, it's obviously our desire, and in fact, we're optimistic about being able to execute against it to turn the streaming business into a true growth business. As we see it, there are three ways to do it. One is what we've just talked about, which is to continue to put Disney+ and Hulu together as a user experience. You'll see more of that in the months ahead. In addition, we plan when we launch ESPN direct-to-consumer to be really smart about bundling that. For those that bundle, the experience will be fully integrated.

That will be another big step. When you consider the Disney brands that are part of Disney+, the general entertainment that's part of Hulu and the volume, and then the live sports that will be part of the experience, in a way, there's nothing like it in the streaming world. It's unrivaled in terms of quality, in terms of volume, and just in terms of variety. We're very excited about it. Two other pillars of growth for that business will be technology. We're also hard at work at improving our, basically, the tech side of that business. We've taken a lot of steps already, including paid sharing, which we're just kicking in with Hulu. That's also starting to work. A lot more in terms of personalization and customization, a lot on the edtech side, and much more coming.

I was just taken through a roadmap for the rest of the year. We're not talking about many years. We're talking about near term where the technology improvements to the platforms will be significant. Of course, the third pillar of growth will be investment in content, particularly outside the United States, where we know that we need to invest more in local content. We've already started that process. It takes time, and you know we don't really end up booking those costs until the shows air, but we're already starting to develop more aggressively in very, very targeted markets outside the United States.

Hugh Johnston (Senior EVP and CFO)

Right. Hey, Ben, this is Hugh. Obviously, the guide that we announced for this year, which was 5.30, we've now taken to 5.75. The long-term guide remains intact. What we announced before, no change to that.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Ben. Operator, next question, please.

Operator (participant)

Yes, sir. Our next question comes from Steven Cahall with Wells Fargo. Please go ahead.

Steven Cahall (Managing Director and Senior Analyst of Media, Advertising and Cable)

Yeah, first, just congratulations on Abu Dhabi. I was wondering if you could speak a little more on how you settled specifically on this location and this partner. I mean, Yas Island is really exciting already with the track and Ferrari World, and the Emirate has a lot in infrastructure, but there are a lot of choices in the region. Maybe you could just think about what audience you're going after and how this particular location is best suited for those purposes. Just a second question on parks. I think domestic park margins were up 110 basis points in the quarter. I think you said that cruise is margin accretive. I was just wondering if you could help us think through the margin improvement you saw at domestic. Was that mostly due to cruise mix? Were underlying domestic park margins up as well.

Just thinking about that as we forecast this longer term. Thank you.

Hugh Johnston (Senior EVP and CFO)

Yeah, hi, this is Hugh. In terms of the margins on the parks business, that's a combination of all of the businesses. We have certainly seen margin accretion in the parks and experiences side as well, not just the impact of cruise. On the Abu Dhabi question, which is a good question, Steven, we did study the region very carefully, and we know that we had many opportunities. Obviously, building a theme park in a location is a huge endorsement of that location. It speaks volumes in terms of the ability of that location to sustain a Disney theme park. I should start really with an overview of the Middle East.

It was very obvious to us that there were many people, basically hundreds of millions in the world that are income qualified, where a trip to one of our six locations was pretty lengthy in nature and expensive. We felt the best way, obviously, to reach those people is to basically bring our product to them. Interestingly enough, as an aside, when we decided to build a cruise ship and put it in Singapore, which will not launch until the end of the year, we put it on sale just a few months ago, and the first quarter sold out in a matter of days, as a for instance.

There is clearly a desire of consumers to engage with Disney in a wide region that is actually distanced enough from our other locations so that we do not really view this as in any way cannibalistic to the places we already operate. When you look at Abu Dhabi and the UAE, I mentioned these statistics earlier today. We talk about it being a crossroads of the world. 500 million income qualified people live within four hours. 120 million people will come through Dubai and Abu Dhabi this year alone. Abu Dhabi estimates that 39 million tourists will visit Abu Dhabi by 2030. That says a lot. As we started to really dig deeper into Abu Dhabi specifically and engage with our partners, obviously, capital was not an issue. In addition to that, they have demonstrated a number of things that were really important to us.

One, a real appreciation of quality and innovation, an appreciation of the arts and creativity, and a huge commitment to new technology. We were impressed with all of that. We also looked at what they've already built between the Louvre that's already built, the Guggenheim, which is going up, and incredible other experiences, the architecture here as well. Everywhere we looked, we basically were convinced that this was a perfect place for us. In Miral, our partners, we immediately bonded with them in many respects, spoke the same language. Basically, we both have a real appreciation of our history and our legacy, but moving forward and being forward-thinking and innovating is also part of basically our DNA.

It was very, very clear to us that of all of the places that we could choose from, there did not seem to be any place that was better than this. One of the reasons why it came together so quickly is because of how convinced we became, particularly after engaging with our partners, that this was the right choice.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Steve. Operator, next question, please.

Operator (participant)

Thank you. Our next question today comes from Robert Fishman with MoffettNathanson. Please go ahead.

Robert Fishman (Senior Research Analyst)

Thank you. Bob, the studio has clearly delivered many hits over the past year. I'm wondering if you could just share a little bit more about your excitement for the upcoming theatrical slate and how that will generate the additional long-term value for Disney and the multiplier effect that you talked about in your prepared comments. On a related note, with the Thunderbolts opening, what is your confidence that Marvel can still be a significant driver to that Disney flywheel with its renewed focus on theatrical and putting out less scripted series on Disney+?

Bob Iger (CEO)

Thanks, Robert. I have a lot of confidence in our upcoming slate. Let me just list some of the films that are coming out. We have Lilo & Stitch coming out on Memorial Day weekend. That's the live-action version. Tracking is enormous. I've seen the movie a few times. I can endorse it wholeheartedly. I have a lot of confidence there. Pixar Elio in June. Then we have Fantastic Four in July. Then Tron, Zootopia, and Avatar to finish out the calendar year. That's quite a lineup. Next year, Avengers, Mandalorian, Toy Story, and Moana live action. We have a slate in the next year and a half that not only I have a lot of confidence in, but it's as strong as any slate that I've seen in a long time since, in 2019, I think was our best year.

It's as strong as anything I've seen since then. Great confidence. Look, I've talked about Marvel a lot. We all know that in our zeal to flood our streaming platform with more content, we turned to all of our creative engines, including Marvel, and had them produce a lot more. We've also learned over time that quantity does not necessarily beget quality. Frankly, we've all admitted to ourselves that we lost a little focus by making too much and by bringing Marvel, by consolidating a bit and having Marvel focus much more on their films. We believe it will result in better quality. I think the first and best example is Thunderbolts. I feel very good about that. Thank you.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Robert. Operator, next question, please.

Operator (participant)

Absolutely. Our next question today comes from Jessica Reif Ehrlich with BofA Securities. Please go ahead.

Jessica Reif Ehrlich (Managing Director)

Thank you. I'm maybe switching gears to advertising. Bob, you mentioned in your prepared remarks that you're optimistic regarding the upfront. Can you give us some comments on what you're seeing in the market? The move to programmatic, is it having an impact on your share of markets, sports? I think the advertising was lower in Disney+, so maybe you could give us a color on what's going on. Just to follow up on Abu Dhabi, since you're not putting capital in, is there any ownership or is this simply a royalty?

Bob Iger (CEO)

I'll start on the Abu Dhabi question, and I'll let you pick up your question on advertising. It is all their capital, and we will get a royalty. There isn't ownership. We own our IP and license it to them is essentially the arrangement. We're responsible for design and development, and we will be involved significantly in oversight of their operations, basically to ensure that the Disney experience, meaning the Disney theme park experience, is up to the level that we offer in the other six locations that we operate. By the way, we're not concerned about that at all. They've already demonstrated a commitment to quality in that regard. This is essentially a license arrangement, but with considerable involvement of us.

Although they will operate it, we will have employees embedded in the organization with them to help them operate a Disney theme park, basically the quality level that everybody's used to.

Hugh Johnston (Senior EVP and CFO)

Yeah. Hey, Jessica, just to follow up on the advertising question. Right now, the advertising market is quite healthy for us. Live sports, as you know, is doing extremely well. You see that in the ESPN numbers where advertising for the quarter was up over 20%. In addition to that, we continue, as we go into the upfront season, to see robust demand for our advertising. I know there's lots of concern from a consumer perspective and what that might mean for advertisers. Right now, in particular, restaurants and healthcare have considerable demand for advertising. The one place that obviously continues to be a bit more challenged is on the DTC side, not driven by demand, but driven by supply as we have new entrants into that marketplace. That said, there's still strong demand there for Disney advertising as well.

Overall, you may recall back at the beginning of the year, we indicated that our advertising growth would be up consistent with what we saw last year, which was 3%. We now expect it to be in excess of what we indicated back at the beginning of the year. Overall, the advertisers are certainly demanding what we can offer.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Jessica. Operator, next question, please.

Operator (participant)

Absolutely. Our next question today comes from David Karnovsky with JPMorgan. Please go ahead.

David Karnovsky (Head of U.S. Media, Entertainment, and Advertising)

Hi. Thank you. Bob, just on ESPN Flagship, as you move towards the launch, interested to understand better the approach from a programming standpoint, how you view the necessary critical mass of both sports rights and shoulder programming in a more tech-driven interface. How's that different from linear? Just given the importance of some of the features you'll roll out, like betting and fantasy, how do you think about wanting to keep subscribers in that ecosystem versus giving them the option of consuming their flagship subscription through Disney+? Thanks.

Bob Iger (CEO)

First of all, to the last point, if you are a subscriber of linear ESPN, you will automatically get what I know we've been referring to as ESPN Flagship. By the way, it will not be called that. Next week, Jimmy Pitaro plans to reveal not only the name, but he'll also talk about our pricing strategy. The plan would be to basically be somewhat agnostic from a subscriber perspective so that we can still do our best to preserve the multi-channel ecosystem, but at the same time, obviously, want to grow our DTC business. The difference is that the ESPN linear service, if that's all that the consumer chooses to watch, will not have the bells and whistles and those additional features that the DTC service will have. Again, we're giving the consumer the option of consuming both.

From a critical mass perspective, we have obviously an unrivaled portfolio of licensed sports on ESPN and an unrivaled portfolio of studio programming and shoulder programming, the bulk of which will be on the linear service and, of course, on flagship, quote-unquote, flagship. At some point, I've got to stop using that word. That said, what we've already been doing and what we'll continue to do is give consumers of Disney+ and Hulu a taste of live sports on that service so that we have an opportunity to upsell them on the Disney DTC service, which obviously is a priority of ours. Again, that service will have many more features than the linear service will have. I know, and this will, when we launch, will be much simpler, perhaps, than I'm even describing. We're going to limit the number of SKUs.

We're going to make it very, very clear what is what, meaning what you get when you just watch linear, what you get when you sign up to Disney DTC. I think the most important thing is that if you are a subscriber of Disney+ and Hulu and ESPN DTC, I should have said ESPN, not Disney. If you're a subscriber of all three, you'll have a seamless experience there. They'll be completely, ultimately integrated or embedded into the service. That, I think, is a real plus from a consumer experience perspective.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, David. Operator, next question, please.

Operator (participant)

Thank you. Our next question today comes from Michael Morris at Guggenheim. Please go ahead.

Michael Morris (Managing Director and Equity Research Analyst of Media and Internet)

Thank you. Good morning. I wanted to ask a couple more questions about the experiences segment and specifically about the outlook there. You had a strong fiscal second quarter. You did not change the full year growth guidance. Can you provide an update on what you were seeing in the demand environment in the U.S. in particular and whether that changed from the end of the last quarter? Also, the growth rate, the implied growth rate in the back half of the year is for double-digit operating income growth. As you look into fiscal 2026, is there a reason that that double-digit growth is not something that can continue? I know you have spoken to high single digits in the past in 2026. Wondering if there is any upside there. Finally, on international, you noted some softness in demand in China.

The question is, is that getting worse? How much of a headwind may that be going forward? Thank you.

Hugh Johnston (Senior EVP and CFO)

Okay. Hey, Michael, Hugh here. I think that was three questions, but I'll do my best to remember them all and answer them. In terms of the first piece, the outlook, the outlook is actually still quite strong for the experiences business. Bookings right now for Walt Disney World for the third quarter are up 4%. That is with about what we would say is about 80% in. For the fourth quarter, bookings are up 7%. That is probably somewhere between 50%-60% in at this point. Certainly looking very optimistic. That was part of what factored into our change in the guidance going forward. In terms of your question on international, it is not getting any worse. Again, just to reiterate what Josh mentioned on CNBC, attendance is actually still quite good. It is just per cap spending is not quite as high.

Bob Iger (CEO)

That's China.

Hugh Johnston (Senior EVP and CFO)

In China, correct. Because the Chinese consumer, as we know, is a bit challenged. From that perspective, certainly feel good about the fact that we still have the engagement. Consumers are tightening their belts a little bit in that particular market, and that's what you're seeing flow through there. In terms of expectations for 2026 and for first 2025, the only thing I would say is we guided 6-8. Given the numbers that we're seeing, we're probably going to be at the higher end of that for the experiences business for this year. For 2026 and beyond, I'm not going to comment on that at this point. We'll do guidance on 2026 when we get to 2026.

I'm not going to provide any further color on that until we get to that point, other than what I had mentioned earlier, which is the guidance in terms of growth rates remains intact.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Mike. Operator, next question, please.

Operator (participant)

Absolutely. Our next question today comes from Michael Ahern with Goldman Sachs. Please go ahead.

Michael Ahern (Managing Director and Technology Fellow)

Hi. Good morning. Thank you very much for the question. Just two on experiences. First, just with Disney Treasure hitting the second full quarter, or excuse me, the second quarter of operations, I was wondering if you could talk about key learnings from the cruise launch so far and anything there that helps to inform expectations or strategy around the upcoming launch of Disney Adventure and Disney Destiny. Just as a parks follow-up, I was just wondering if you could talk a little bit about the international visitation to domestic parks and if you're seeing any changes there. Thank you very much.

Bob Iger (CEO)

I'll take the cruise ship. You take the rest. On the cruise ship side, as we've expanded, we've embedded in our ships even more Disney intellectual property and at a higher quality level. The ratings for the Treasure are just sky-high. People just love that ship, and for good reason. The ships that are coming will take full advantage of everything that the Treasure has taken advantage of and then some. We feel great about that business. It has been a great way for us to bring the Disney experience to more consumers around the world. As noted earlier on the call, the experience we've had in putting the ship that will sail out of Singapore on sale, as for instance.

We see that business becoming a growth driver for the segment over the next three to four years as more ships are deployed.

Hugh Johnston (Senior EVP and CFO)

Yeah. Michael, in terms of the attendance, international attendance at the domestic parks, we've indicated in the past that that number has not gotten back to pre-COVID levels, but it is still in the double digits. We've seen a bit of an impact, but it's literally like in terms of the mix, 1%-1.5%. What I would expect going forward is something similar to that. The good news is we're clearly more than making up for it with domestic attendance. Attendance at the parks has been terrific.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Michael. Operator, next question, please.

Operator (participant)

Thank you. Our next question today comes from Kannan Venkateshwar with Barclays. Please go ahead.

Kannan Venkateshwar (Managing Director, US Media, Cable, and Telecom Equity Research)

Thank you. Maybe you come to Bob on the park side with the Abu Dhabi parks announcement. You also have a long-term plan in place for the segment as a whole. Are there other opportunities in other locations around the world? I mean, now you have a presence in Singapore. You now have a presence in Abu Dhabi. Is there more opportunity for you to expand that footprint further as you look out longer term? Some thoughts on that would be great. Hugh, on the streaming side, when we think about operating leverage going forward, is that largely a function of revenue growth, or is there also cost opportunity as you align these platforms? As Bob mentioned, there might be fewer SKUs going forward. Does that also provide some kind of a cost opportunity where we see margins inflect? Thanks.

Bob Iger (CEO)

Kannan, thanks for your question. We just announced Abu Dhabi, and now you're asking for more already. Thank you. With this as our seventh location, we feel that once it opens, it gives us the ability to be far more effective at reaching basically the world's population than we've been before. While I'm not going to rule out the possibility of another location, there's nothing that's really being planned near-term to actually build another park in what would be an eighth location. However, I want to remind you that when we talked about a year ago about turbocharging that business with investment and capital, because the return on invested capital has been so stellar, we are continuing on that trajectory.

To remind everyone, and it's tied to the kind of deal that we made in Abu Dhabi, we're planning to invest approximately $30 billion to expand Florida and California, which obviously is a vote of confidence in those locations. In addition, those will be highly accretive from a job perspective as well. We're also investing to expand in every other location that we operate. Obviously, a bullish belief in the business itself with Abu Dhabi, as I said, and with the addition of the cruise ships, we're making ourselves very accessible to hundreds of millions of more people than we were in the past. We're going to focus on this right now and the other investments that we're making. As I said, I'm not ruling out the possibility of another location, but it's not exactly something that's a priority right now for us.

Hugh Johnston (Senior EVP and CFO)

Hey, Kannan, I'll handle the streaming question. While your point is exactly right, with a business that is going to have the growth that we have expectations for in the streaming business, there will clearly be leverage that just comes out of the revenue growth itself. In addition to that, we absolutely have opportunities to reduce costs. The answer is both. We can certainly do it on the G&A side, and especially as we start to add more to the product, both in terms of the technology side of the product where we will be investing and in terms of the content that's delivered, whether it's bringing ESPN on and the additional content that we've been bringing in through bundling. We certainly expect to get operating leverage out of marketing over time.

I would not say that initially, especially as we launch ESPN, but over time, we would expect to get leverage out of the marketing line as well. Put those two together, yeah, I do expect some flow from top to bottom. We will use some of that to invest back in the business, perhaps in some international content, but I would also expect some of those cost reductions to go straight to the bottom line as well to give us accelerated margin growth.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Kannan. Operator, we have time for one last question.

Operator (participant)

Thank you. Our final question today will come from Peter Supino with Wolfe Research. Please go ahead.

Peter Supino (Managing Director, Senior Analyst of Media and Entertainment, and Telecom Cable)

Hi. Good morning. Thank you. Question back on experiences. You mentioned $30 billion of expansion capital for Florida and California. I wondered if that is, if we're defining expansion in terms of attendance, is that capital that will enable more people to visit the park? More broadly, how do you think about your incremental return on capital on expansions in your experiences segment? Thanks.

Bob Iger (CEO)

The guest experience is obviously paramount to us. It's very, very critical. With that in mind, we actually, with a governor, we actually limit the number of people that we let in because we don't want to decrease the guest experience. As we look to expand, not only do we look to take advantage of the property that we have and the intellectual property that we have, but we look to add capacity so that we can let more people in without in any way impacting negatively the guest experience. That is true really every place that we operate. It's really important to us. We're blessed with the fact that we have more available land, and we certainly have a lot of intellectual property to be mined.

We have made announcements that are pretty specific about what we're building: a Villain's Land and a Cars Land in Florida, for instance, a Pandora in California, a Coco in California. I could go on and on. In terms of the return on invested capital, we have actually hit record levels in terms of return on invested capital in the business. Actually, when I returned to Disney back in 2022 and talked to Josh D'Amaro, who runs the segment, about this, and he showed me what the returns on invested capital had been in the then recent past, but more like pre-COVID, it was extremely impressive. As we looked at, as we determined how we allocate our capital as a company, obviously, we want to allocate it in a direction where the returns are stellar. This is one way that we do that.

I think that says it all, really.

Carlos Gómez (EVP, Treasurer, and Head of Investor Relations)

Thanks, Peter. Thanks everyone for your questions today. We want to thank you for joining us and wish everyone a good rest of the day.

Operator (participant)

Thank you. This concludes today's conference call. We appreciate your attendance today. You may now disconnect your lines. Thank you.