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Walt Disney Co (DIS)·Q2 2025 Earnings Summary

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 .

Financial Results

Consolidated performance vs prior periods

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$22.083 $24.690 $23.621
Diluted EPS ($)$(0.01) $1.40 $1.81
Adjusted EPS ($)$1.21 $1.76 $1.45
Total Segment Operating Income ($USD Billions)$3.845 $5.060 $4.436
Cash from Operations ($USD Billions)$3.666 $3.205 $6.753

Segment revenues and operating income

SegmentQ2 2024 Revenue ($B)Q2 2025 Revenue ($B)Q2 2024 OI ($B)Q2 2025 OI ($B)
Entertainment$9.796 $10.682 $0.781 $1.258
Sports$4.312 $4.534 $0.778 $0.687
Experiences$8.393 $8.889 $2.286 $2.491
Eliminations$(0.418) $(0.484) ——
Total$22.083 $23.621 $3.845 $4.436

Key streaming and ESPN+ KPIs (sequential)

KPIQ1 2025Q2 2025
Disney+ total subscribers (mm)124.6 126.0
Hulu total subscribers (mm)53.6 54.7
ESPN+ subscribers (mm)24.9 24.1
Disney+ ARPU – Domestic ($)$7.99 $8.06
Disney+ ARPU – International ($)$7.19 $7.52
Disney+ ARPU – Blended ($)$7.55 $7.77
Hulu SVOD ARPU ($)$12.52 $12.36
Hulu Live TV + SVOD ARPU ($)$99.22 $99.94
ESPN+ ARPU ($)$6.36 $6.58

Actual vs Wall Street consensus (Q2 2025)

MetricConsensusActualSurprise
Revenue ($USD Billions)$23.125*$23.621 +$0.496B
Adjusted EPS ($)$1.21*$1.45 +$0.24
EBITDA ($USD Billions)$4.478*$4.895*+$0.417B

Values with asterisk (*) retrieved from S&P Global.

Estimate counts: EPS (22*), Revenue (20*) for Q2 2025.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSFY2025$5.30 (guide) $5.75 Raised
Cash from OperationsFY2025~$15B ~$17B (benefit from tax deferral) Raised
Sports Segment OI GrowthFY2025~13% ~18% Raised
Entertainment Segment OI GrowthFY2025Double-digit % Double-digit % Maintained
Experiences Segment OI GrowthFY20256%–8% 6%–8% Maintained
Disney Cruise Line pre-opening expenseFY2025 / Q3–Q4~$200M FY total ~$200M FY; ~$40M Q3 and ~$50M Q4 Clarified timing
India JV equity lossFY2025~$300M ~$300M (purchase accounting amort.) Maintained
Disney+ subscribers (sequential)Q2 vs Q1; Q3 vs Q2Q2: modest decline vs Q1 Q3: modest increase vs Q2 Improved trajectory

Earnings Call Themes & Trends

TopicQ4 2024 (prior)Q1 2025 (prior)Q2 2025 (current)Trend
Streaming integration & techHulu on Disney+; ESPN tile Dec 4; ad-tech leverage Focus on password sharing, personalization, unified tech/ad stack Lower churn, higher engagement; push to bundle ESPN DTC with Disney+/Hulu Strengthening
ESPN Flagship DTCLaunch early fall 2025; ad-tech benefits Product vision and features; pricing/name to be revealed Seamless integrated experience; linear parity plus features; launch details imminent Progressing
Experiences demand/expansion“Gold standard,” investment pipeline Treasure off to “spectacular” start; Lightning Lane ramp WDW bookings +4% (Q3) and +7% (Q4); domestic strength Strong domestic; uptrend
International parks (China)Intl OI down in Q4 —China per-capita spend soft; attendance solid Cautious
Abu Dhabi park——Licensed Disneyland Abu Dhabi announced; Disney provides design/oversight; Miral capital Expansion
AdvertisingAd-tech stack advantage; linear + live value —ESPN ad +20%+; robust upfront demand; DTC ad supply constrained Improving
Content slate & Marvel focusStrong FY2025 slate (Captain America, Lilo & Stitch, etc.) Confidence in pipeline Emphasis on fewer, higher-quality Marvel; near-term slate listed Quality focus
India JVDeconsolidation/JV formation Equity loss in Q1; ~300M FY guide Equity loss continues; ~300M reiterated Ongoing drag

Management Commentary

  • “Our outstanding performance this quarter—with adjusted EPS up 20% from the prior year driven by our Entertainment and Experiences businesses—underscores our continued success building for growth…” (Robert A. Iger) .
  • On strategic growth: “We remain optimistic… upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment” .
  • On Experiences expansion: “Investing more than $30 billion in our theme parks in Florida and California… returns from our Experiences businesses at all-time highs” (Iger) .
  • On streaming: integrated Disney+/Hulu experience reducing churn; ESPN DTC to be bundled and fully integrated with Disney+/Hulu for subscribers .

Q&A Highlights

  • Streaming bundling and tech: Integration of Hulu content and live sports into Disney+ is lowering churn and increasing engagement; tech roadmap to improve personalization, ad tech, and paid-sharing enforcement; long-term goal to make streaming a true growth business .
  • ESPN Flagship: Product aims for critical mass of rights, shoulder programming, and enhanced features (betting, fantasy). Linear ESPN subscribers will have access, but DTC offers additional features; seamless bundle with Disney+/Hulu planned .
  • Experiences outlook: WDW bookings up 4% (Q3) and 7% (Q4) with strong domestic demand; international softness in China driven by per-cap spending; cruise fleet expansion performing well (Disney Treasure ratings “sky high”) .
  • Advertising momentum: Live sports strength fueling ESPN ad growth (>20%); upfront demand robust across categories; DTC advertising demand strong but supply impacted by new entrants .
  • Abu Dhabi project: Licensed model—Miral provides capital; Disney designs, licenses IP, and oversees operations; embedded Disney team to maintain quality .

Estimates Context

  • DIS beat consensus on revenue, adjusted EPS, and EBITDA for Q2 FY2025, implying upward estimate revisions for Entertainment (DTC/content sales) and potentially Experiences given bookings strength .
  • Consensus vs actual (Q2 2025): Revenue $23.13B* vs $23.62B; Adjusted EPS $1.21* vs $1.45; EBITDA $4.48B* vs $4.90B*; EPS estimates count 22*, revenue 20* (all indicate a beat) .
    Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

  • Earnings quality improving: DTC now profitable with rising ARPU and lowered churn, supporting sustained margin expansion; Entertainment OI up 61% YoY .
  • Experiences is the anchor: Domestic strength and better bookings underpin raised FY guide; near-term cruise pre-opening expense is modest and well-flagged .
  • Sports volatility manageable: Higher programming costs from CFP/NFL timing weighed on OI, but ESPN ad growth and upcoming ESPN DTC launch should improve leverage over time .
  • Guidance raised across key metrics (EPS, cash from ops, Sports OI growth) is a clear positive catalyst; trajectory of Disney+ subs improved from “modest decline” to “modest increase” sequentially .
  • Watch international parks/China: Attendance steady but per-cap spending remains soft; monitor recovery indicators and cost controls .
  • Strategic expansion outside U.S.: Disneyland Abu Dhabi (licensed) extends Experiences without Disney capital; expect longer-term brand and cash flow benefits .
  • Near-term trading: Beat-and-raise quarter with visible catalysts (ESPN DTC launch pricing reveal, film slate) suggests estimate revisions and constructive sentiment; medium-term thesis hinges on DTC integration, Experiences ROIC, and disciplined sports rights spending .