Executive Summary

Q4 FY25 headline: Adjusted EPS $1.11 beat S&P Global consensus $1.02, while revenue of $22.46B was slightly below $22.78B consensus; GAAP EPS was $0.73 (consensus from S&P Global estimates)*.
Mix was bifurcated: Experiences posted record Q4 operating income (+13% YoY to $1.88B) while Entertainment OI fell 35% on tough theatrical comps; Sports OI declined 2% with higher ESPN marketing/rights costs partially offset by ad/sub revenue growth .
FY26 guide: double‑digit adjusted EPS growth; 10% margin target for Entertainment DTC SVOD; ~$19B CFO, $9B capex, $24B content investment, buybacks doubling to $7B, and a $1.50 dividend (two $0.75 installments) .
Near‑term Q1 FY26 headwinds: ~$400M adverse Entertainment OI from theatrical slate comparison, ~$140M lower political ads, and ~$73M Star India comp; DTC SVOD OI guided to ~$375M .
Strategic catalysts: ESPN full DTC launch traction and bundling synergy (about 80% of new ESPN app sign‑ups took the Trio bundle), record Experiences profitability, and capital return acceleration .

What Went Well and What Went Wrong

What Went Well
- Experiences delivered record Q4 OI of $1.88B (+13% YoY), driven by Domestic (+9%) and International Parks (+25%); Disney Cruise Line strength cited with higher passenger cruise days .
- DTC profitability improved: Entertainment DTC OI rose 39% YoY to $352M in Q4; Disney+ and Hulu subscribers grew sequentially to 131.6M and 64.1M, respectively .
- ESPN DTC launch showed promising adoption/engagement; CEO highlighted user uptake, feature usage (e.g., Multiview, SportsCenter for You), advertiser appeal, and 80% of new sign‑ups taking the Trio bundle .
What Went Wrong
- Entertainment OI fell 35% YoY to $691M on tough comps vs Inside Out 2 and Deadpool & Wolverine; Content Sales/Licensing revenue down 26% and swung to a $52M loss .
- Linear Networks pressure persisted: revenue –16% YoY and OI –21% as domestic ad revenue fell on lower rates/viewership and political ads; international decline reflected Star India deconsolidation .
- Sports OI down 2% YoY; domestic ESPN OI declined 3% on higher marketing (ESPN app launch) and rights costs, partly offset by +8% domestic ad revenue and higher subs/affiliate rates .

Financial Results

Quarterly trend (actuals)

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($B)	$23.62	$23.65	$22.46
GAAP Diluted EPS	$1.81	$2.92	$0.73
Adjusted EPS	$1.45	$1.61	$1.11
EBITDA Margin %	20.72%*	21.33%*	18.07%*
Net Income Margin %	13.86%*	22.25%*	5.84%*

*Values retrieved from S&P Global.

Q4 actual vs S&P Global consensus

Metric	Q4 2025 Actual	Q4 2025 Consensus	Beat/Miss
Revenue ($B)	22.464	22.779*	Miss (~$0.32B)
Primary EPS ($)	1.11	1.02*	Beat (+$0.09)
EBITDA ($B)	4.06*	4.04*	In line/slight beat

*Estimates and actuals from S&P Global.

Segment breakdown (Q4 2025 vs Q4 2024)

Segment	Revenue Q4’24 ($B)	Revenue Q4’25 ($B)	OI Q4’24 ($B)	OI Q4’25 ($B)
Entertainment	10.83	10.21	1.07	0.69
Sports	3.91	3.98	0.93	0.91
Experiences	8.24	8.77	1.66	1.88

Key KPIs (sequential)

KPI	Q3 2025	Q4 2025	Change
Disney+ subs (M)	127.8	131.6	+3.8
Hulu subs (M)	55.5	64.1	+8.6
Disney+ ARPU – Global ($)	7.86	8.04	+0.18
Hulu SVOD ARPU ($)	12.40	12.20	–0.20
Hulu Live TV + SVOD ARPU ($)	100.27	100.02	–0.25

Non‑GAAP reconciliation note: Q4 adjusted EPS of $1.11 excludes $0.23/sh of restructuring/impairments and $0.16/sh of TFCF/Hulu amortization/step‑up; GAAP EPS was $0.73 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Entertainment DTC SVOD OI	Q1 FY26	n/a	≈$375M	Introduced
Entertainment OI headwind (theatrical comps)	Q1 FY26	n/a	–$400M vs Q1 FY25	Introduced
Political advertising revenue impact	Q1 FY26	n/a	–$140M vs Q1 FY25	Introduced
Star India comp	Q1 FY26	n/a	–$73M vs Q1 FY25	Introduced
Cruise pre‑opening expense	Q1 FY26	~$50M Q4 FY25 guide	$90M	Higher sequential launch costs
Cruise dry dock expense	Q1 FY26	n/a	$60M	Introduced
Entertainment DTC SVOD margin	FY26	n/a	10%	Introduced
Entertainment OI growth	FY26	Double‑digit FY25 (context)	Double‑digit YoY (2H‑weighted)	Directionally consistent for FY26
Sports OI growth	FY26	+18% FY25 guide	Low‑single digit (4Q‑weighted)	Slower growth FY26
Experiences OI growth	FY26	6–8% FY25 guide	High‑single digit (2H‑weighted)	Stronger than FY25
Cash from operations	FY26	$17B FY25 guide	~$19B (ex‑53rd week benefit)	New FY26 target
Capex	FY26	n/a	~$9B	Introduced
Content investment	FY26	n/a	~$24B	Introduced
Share repurchases	FY26	$3.5B FY25 actual target	Target $7B	Raised
Dividend	FY26	$1.00 FY25 total (implied)	$1.50 (two $0.75 payments)	Raised

Earnings Call Themes & Trends

Topic	Previous Mentions (Q‑2 and Q‑1)	Current Period (Q4 FY25)	Trend
ESPN DTC launch	Announced/“upcoming” launch; sports mix drove higher costs in Q2; domestic ESPN ad strength (+29% CFP/NFL format effects)	Successful launch; strong adoption/engagement; advertiser appeal; feature set (Multiview, SportsCenter for You); 80% of new sign‑ups on Trio bundle	Positive ramp; ecosystem synergy
Bundling strategy	Integration of Hulu into Disney+; single‑app experience plan	Trio bundle reduces churn; openness to broader 3rd‑party bundles (e.g., Max)	Broadening bundles; churn tailwinds
DTC growth/Profit path	DTC OI inflected positive in FY25; double‑digit growth aspiration	Targeting double‑digit DTC revenue growth and margin expansion via operating leverage, not cost‑cuts	Sustained profitable growth focus
Experiences demand	Strong domestic parks; cruise expansion (Disney Treasure)	Bookings +3% for Q1; cruise demand “very strong” despite capacity adds	Healthy demand into FY26
Advertising/Distribution	Q2: strong sports ads;	Expect ad growth in FY26; YouTube TV carriage negotiations hedged in guidance	Cautious near‑term; managed risk

Management Commentary

CEO message: “Another year of great progress… meaningful progress in our direct‑to‑consumer businesses… our strategy… enables us to continue investing… and increasing our returns to shareholders.”
Capital returns: “Targeting $7B in share repurchases in 2026… the board has declared a cash dividend of $1.50 per share, a 50% increase over the dollar paid to shareholders in fiscal 2025.”
ESPN app traction: “We’re very encouraged… features… are being used… attracting both more advertising and new advertisers.”
Bundling: “About 80% [of ESPN app subscribers] have signed up to the Trio bundle (Disney+, Hulu, ESPN).”
DTC margin path: “We’re going to get there through revenue growth and operating leverage… grow the top line double digits.”
AI/product roadmap: Disney+ moving toward a “portal to all things Disney” with personalization, commerce, gaming tie‑ins (Epic), and user‑generated content features enabled by AI .

Q&A Highlights

ESPN DTC adoption/churn: Strong uptake with high Trio bundle attach (~80%) reducing churn; features and data improve advertiser appeal .
Experiences outlook: FY26 growth driven by cruise (Destiny/Adventure), pricing and attendance; Q1 bookings up ~3% .
Sports cost cadence: NBA rights timing creates mid‑year OI lumpiness; growth more weighted to Q4 FY26 .
Distribution risk management: YouTube TV dispute hedged in guidance; expects offset from subscriber migration .
DTC model: Emphasis on double‑digit revenue growth and margin expansion via leverage, not cost cuts .

Estimates Context

Q4 FY25 vs S&P Global consensus: Adjusted/Primary EPS $1.11 vs $1.02 (beat); revenue $22.46B vs $22.78B (slight miss); EBITDA ~$4.06B vs ~$4.04B (inline) (S&P Global).
Prior quarters: Q3 EPS $1.61 vs $1.45 est (beat); Q2 EPS $1.45 vs $1.21 est (beat); revenue was roughly in line in Q3 and ahead in Q2 (S&P Global).
Potential estimate revisions: FY26 double‑digit adjusted EPS growth, DTC SVOD 10% margin target, higher capital returns ($7B buybacks, $1.50 dividend), and ~2H‑weighted contribution (Entertainment/Sports/Experiences) could lift FY26 EPS/CFO trajectories, while Q1 headwinds (theatrical comps, political ad lap) may temper near‑term quarters .

Key Takeaways for Investors

The quarter was operationally mixed but strategically constructive: Experiences strength and DTC profitability offset tough Entertainment comps; EPS beat even as revenue missed modestly (S&P Global).
ESPN’s DTC launch and high Trio bundle attach are early proof points of Disney’s integrated flywheel; expect lower churn and monetization upside across apps .
FY26 guide implies sustained EPS/CFO growth with clearer DTC margin targets; capital returns accelerate meaningfully (buybacks double; dividend +50%) .
Near‑term (Q1 FY26) caution on Entertainment and ad comps is well‑telegraphed; growth is back‑half weighted across Entertainment, Sports, and Experiences .
Experiences remains a durable earnings engine into FY26, with cruise capacity additions and healthy booking trends .
Watch distribution negotiations (e.g., YouTube TV) and NBA rights cost timing for ESPN’s intra‑year cadence .
For trading: Capital return announcements and DTC profitability milestones are likely positive sentiment drivers; any incremental ESPN DTC KPIs or resolution of carriage disputes are potential catalysts .

Footnotes: Quantitative “actuals” cited from company filings/press releases/8‑K. Consensus/estimate figures and margin metrics marked with an asterisk are from S&P Global.

Walt Disney Co (DIS)·Q4 2025 Earnings Summary