DIS · Q2 2025 Earnings

Bullish

Walt Disney Company (The)

Reported August 6, 2025

30-second summary

30-second take: Disney delivered $23.65B revenue (+2% YoY) and adjusted EPS of $1.61 (+16% YoY), with Experiences segment OI +13% offsetting Entertainment OI -15% and Sports OI +29% (the latter lapping a $314M Star India loss). The forward setup is the story: FY25 adjusted EPS guided to $5.85 (+18% over FY24), Sports segment OI growth guided to 18% and Experiences to 8%, alongside Entertainment DTC OI guided to $1.3B for the year. Domestic Parks & Experiences OI +22% on revenue +10% is the standout operating result, and DTC swung to $346M of operating income from a $19M loss a year ago — a $365M YoY improvement.

Headline numbers

EPS

Q2 FY2025

$1.61

Revenue

Q2 FY2025

$23.65B

+2.0% YoY

Free cash flow

Q2 FY2025

$1.89B

Key financials

Q2 FY2025

Metric	Q2 FY2025	YoY
Revenue	$23.65B	+2.0%
EPS	$1.61	—
Free cash flow	$1.89B	—

Guidance

Prior quarter data unavailable — comparison not possible.

Segment performance

Q2 FY2025

Segment	Q2 FY2025	YoY
Entertainment	$10.704B	+1.0%
Sports	$4.308B	-5.0%
Experiences	$9.086B	+8.0%
Direct-to-Consumer	$6.176B	+6.0%
Parks & Experiences Domestic	$6.403B	+10.0%

Platform metrics

Q2 FY2025

Segment	Q2 FY2025
Disney+ Total Subscribers	127.8 million
Disney+ Domestic (U.S. & Canada) Subscribers	57.8 million
Disney+ International Subscribers	69.9 million
Total Hulu Subscribers	55.5 million
Disney+ Domestic ARPU	$8.09
ESPN+ ARPU	$6.40

Profitability

Q2 FY2025

Segment	Q2 FY2025
Direct-to-Consumer Operating Income	$346 million
Total Segment Operating Income	$4.575 billion

Other KPIs

Q2 FY2025

Segment	Q2 FY2025	YoY
Parks & Experiences International	$1.691B	+6.0%

Management tone

No tone-shift analysis available for this quarter.

Recurring themes management leaned on this quarter:

Experiences segment resilience and expansionStreaming acceleration and profitability pathEntertainment portfolio strength across movies and sportsInternational growth (Abu Dhabi seventh park)Capital investment in Florida and CaliforniaDirect-to-consumer launches (ESPN DTC)

Risks management surfaced:

Macroeconomic uncertaintyCompetition in entertainment and streamingExecution risks on expansion projectsMarket for advertisingLegal and regulatory developments

Q&A highlights

Ben Swinburne · Morgan Stanley

Is the broader Disney+ content strategy (Hulu, sports content, bundling) driving benefits in engagement, signups, and churn? And does the three-year double-digit earnings growth guidance for 2026-2027 remain intact off the new 2025 EPS base?

Management confirmed engagement is up and churn is down significantly. Three pillars of streaming growth identified: bundling Disney+/Hulu/ESPN (fully integrated experience when ESPN DTC launches), technology improvements (page sharing, personalization), and content investment particularly outside US. Long-term guidance remains intact; 2025 guidance raised from $530M to $575M.

Engagement up, churn down significantly with Hulu/sports bundlingThree growth pillars: bundling, technology, international content investment2025 EPS guidance raised to $575M (from $530M)Long-term guidance unchanged

Stephen Cahill · Wells Fargo

Why Abu Dhabi specifically for the new theme park? What location and partner factors influenced the decision? What drove domestic parks margin improvement of 110 bps—was it cruise mix or underlying park margins?

Abu Dhabi chosen because it reaches 500M income-qualified people within 4 hours and 120M annual visitors to the region; management impressed by partner quality focus, innovation commitment, and architecture. Strong synergies with partner and conviction level was high. Margin improvement was combination of cruise contribution plus margin accretion in parks and experiences segment itself, not solely cruise mix.

500M income-qualified people within 4 hours of Abu Dhabi120M annual visitors to Dubai/Abu Dhabi regionAbu Dhabi projects 39M tourists by 2030Domestic parks margins up 110 basis points in quarter

Robert Fishman · Moffitt Nathanson

Can you detail upcoming theatrical slate excitement and multiplier effects? What is confidence that Marvel can still drive the Disney flywheel with renewed focus on theatrical and reduced Disney+ series?

Management expressed high confidence in slate: Lilo & Stitch (Memorial Day), Elio (Pixar/June), Fantastic Four (July), Tron/Zootopia/Avatar (year-end), plus 2026 with Avengers/Mandalorian/Toy Story/Moana. Described as strongest since 2019. Acknowledged Marvel over-production for streaming hurt quality; consolidating Marvel to focus on theatrical will improve quality, with Thunderbolts as successful example.

Lilo & Stitch tracking 'enormous', management personally endorsed the filmUpcoming slate: Elio, Fantastic Four, Tron, Zootopia, Avatar, Avengers, Mandalorian, Toy Story, MoanaSlate described as strongest since 2019Acknowledged Marvel produced too much content for streaming, diluting quality

Jessica Reef-Ehrlich · BofA Securities

What's happening in the advertising market? Impact of programmatic on market share and sports? Why was Disney+ advertising lower? For Abu Dhabi, is there any ownership or just royalty?

Advertising market currently healthy; live sports advertising up over 20%. Robust demand continues despite consumer concerns; healthcare and restaurants showing strong demand. DTC advertising challenged by supply (new entrants) not demand. Overall advertising growth now expected to exceed initial guidance (was 3%, now expected higher). Abu Dhabi is royalty-only with no ownership—Disney licenses IP, handles design/development, and maintains operational oversight.

ESPN advertising up over 20% in quarterRobust upfront demand continuingHealthcare and restaurant advertising particularly strongDTC advertising soft due to supply, not demand

David Kronofsky · JP Morgan

How will ESPN Flagship approach programming and critical mass of rights vs. linear? How are betting/fantasy features handled? Will subscribers be kept in Flagship vs. Disney Plus ecosystem?

Linear ESPN subscribers automatically receive DTC service. Service will have different name (to be revealed next week with pricing). Strategy is consumer-agnostic to preserve multi-channel ecosystem while growing DTC. Linear service will lack DTC 'bells and whistles' (betting, fantasy features). Disney+ and Hulu users will get 'taste' of live sports to upsell to DTC service. Three-service bundle (Disney+/Hulu/ESPN DTC) will be seamlessly integrated. Limited SKU approach planned at launch.

Service name and pricing to be revealed next week by Jimmy PitaroLinear ESPN subscribers automatically get DTC equivalentDTC service will have additional features: betting, fantasyDisney+ and Hulu will offer 'taste' of live sports content

What to watch into next quarter

ESPN DTC launch execution — pricing strategy, SKU structure, and early subscriber traction following launch; watch whether pricing implies materially incremental ARPU vs. ESPN+ ($6.40 today) or is positioned to defend the linear bundle.

Hulu subscriber adds in Q4 — guide is for the "majority" of the >10M Disney+/Hulu combined net adds to come from Hulu via the expanded Charter deal. Watch whether this is one-time technical onboarding (low quality) or whether ARPU holds.

Sports segment OI trajectory — FY guide is 18% growth; with Star India lap providing the bulk of the YoY tailwind in the current quarter, watch underlying domestic ESPN profitability against rising NBA / college sports rights costs.

Domestic parks margins — Q3 saw Domestic P&E OI +22% on revenue +10%. Watch whether underlying parks margin expansion sustains as ~$50M of Disney Cruise Line pre-opening expense hits Q4.

Entertainment DTC trajectory — $346M of OI this quarter against a $1.3B FY guide implies continued sequential improvement; watch pricing realization, churn, and the cadence into the ESPN DTC launch and Hulu-into-Disney+ integration.

Sources

Walt Disney Company Q3 FY2025 Press Release / Form 8-K Exhibit 99.1, August 6, 2025 — https://www.sec.gov/Archives/edgar/data/1744489/000174448925000135/fy2025_q3xprxex991.htm

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