DIS · Q4 2025 Earnings

Cautious

Walt Disney Company (The)

Reported November 13, 2025

30-second summary

30-second take: Disney closed FY25 with Q4 revenue of $22.46B (flat YoY) and adjusted EPS of $1.11, while full-year adjusted EPS of $5.93 cleared the $5.85 guide. The real signal is in the FY26 guide: Sports segment OI growth is cut from 18% (FY25 guide) to "low-single digit" with Q4 weighting, Entertainment OI growth is qualified with H2 weighting that implies a soft H1, and Q1 carries a $400M theatrical slate headwind plus $140M lower political ad revenue. Management offsets the operational reset by doubling the buyback to $7B and lifting the dividend 50% — a capital-return story layered over a near-term earnings dip.

Headline numbers

EPS

Q4 FY2025

$1.11

Revenue

Q4 FY2025

$22.46B

+0.0% YoY

Free cash flow

Q4 FY2025

$2.56B

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q2 FY2025	QoQ
Revenue	$22.46B	+0.0%	$23.65B	-5.0%
EPS	$1.11	—	$1.61	-31.1%
Free cash flow	$2.56B	—	$1.89B	+35.4%

Guidance

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Adjusted EPS	FY 2025	$5.85	$5.93	+$0.08 above guide	Beat
Entertainment DTC Operating Income	FY 2025	$1.3 billion	$1.3 billion	in-line	Met
Disney Cruise Line Pre-opening Expenses	Q4 FY 2025	~$50 million in Q4 FY2025	~$50 million	in-line	Met

New guidance

Metric	Period	Guide	YoY
Adjusted EPS Growth	FY 2026	Double digit growth compared to fiscal 2025	—
Entertainment DTC SVOD Operating Margin	FY 2026	10%	—
Content Investment	FY 2026	$24 billion across Entertainment and Sports	—
Operating Cash Flow	FY 2026	$19 billion	—
Capital Expenditures	FY 2026	$9 billion	—
Share Repurchases	FY 2026	$7 billion	—

Changes to prior guidance

Metric	Period	Prior guide	New guide	Δ	Result
Entertainment Segment Operating Income Growth	FY 2025	Double-digit percentage growth	Double digit percentage growth compared to fiscal 2025, weighted to the second half of the year	Guidance now qualified with H2 weighting; implicitly lower delivery in H1	Lowered
Sports Segment Operating Income Growth	FY 2025	18% growth	Low-single digit percentage growth compared to fiscal 2025, with growth weighted to Q4	From 18% to low-single digit — material reduction	Lowered
Experiences Segment Operating Income Growth	FY 2025	8% growth	High-single digit percentage growth compared to fiscal 2025, weighted to the second half of the year	From 8% to high-single digit with H2 weighting; front-loaded expenses imply near-term pressure	Lowered

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Entertainment	$10.208B	-6.0%
Sports	$3.98B	+2.0%
Experiences	$8.766B	+6.0%
Direct-to-Consumer	$6.248B	+8.0%
Linear Networks	$2.058B	-16.0%
Parks & Experiences Domestic	$5.857B	+6.0%
Parks & Experiences International	$1.742B	+10.0%
Consumer Products	$1.167B	+3.0%

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Disney+ Subscribers	131.6 million
Disney+ Domestic Subscribers	59.3 million
Disney+ International Subscribers	72.4 million
Hulu Total Subscribers	64.1 million
Disney+ ARPU	$8.04
Hulu SVOD ARPU	$12.20

Profitability

Q4 FY2025

Segment	Q4 FY2025
DTC Operating Income	$352 million
Total Segment Operating Income	$3.480 billion

Management tone

Q2 FY25 first coverage (bullish setup) → Q3 FY25 confidence on FY guide → Q4 FY25 confident long-term narrative paired with a quietly weaker FY26 operating guide.

The Sports segment guide is the cleanest tone shift in the print. One quarter ago management was anchoring FY25 to 18% Sports OI growth as a marquee figure; this quarter the FY26 guide for the same segment is "low-single digit percentage growth … weighted to Q4." Management's framing — "NBA timing creates bumpiness with material H2 growth for ESPN" (Michael Morris exchange) — recasts a sharp deceleration as a rights-expense calendar issue. Whether the H2 reacceleration materialises is the single most important question into FY26.

DTC has graduated from rehabilitation project to "core growth engine." Three quarters ago DTC was being defended as having swung to profitability; this quarter management opened with: "That is a significant achievement when you consider that just three years ago, our DTC business was running a $4 billion operating loss." The FY26 disclosure of a 10% Entertainment DTC SVOD operating margin target — explicit for the first time — formalises the segment as a margin story, not a turnaround story.

Capital return language escalated meaningfully. Q3 framing around buybacks was measured; this quarter management led with "We are targeting $7 billion in share repurchases in 2026, double the $3.5 billion we repurchased in fiscal 2025" alongside the 50% dividend hike. The combination of a doubled buyback and a softer near-term operating guide reads as management front-running shareholder concerns about the H1 FY26 earnings shape with a capital-return cushion.

Studio confidence is the most aggressive in years. Q3's tone on the slate was guarded by strike-related comparisons; this quarter management asserts that "over the past two years, our studios have delivered four global franchise hits that have earned more than $1 billion each. While no other Hollywood studio has achieved a single one during the same period." The slate-confidence framing is what makes the Q1 $400M theatrical headwind palatable in the guide — management is signalling that the dip is timing, not slate weakness.

Streaming strategy shifted from "more apps, more bundles" to "one app, one portal." Robert Fishman's exchange surfaced the clearest articulation yet: Disney+ becoming a "portal" to parks, commerce, games (via the Epic partnership), with AI-enabled personalization. This is the biggest product overhaul since the 2019 launch and represents a structural bet that the next leg of DTC growth comes from engagement depth, not subscriber count.

Recurring themes management leaned on this quarter:

DTC profitability and consolidationFranchise IP strength and box office dominanceStreaming app unification and user experienceShareholder capital return accelerationInternational expansion and local contentExperiences segment record performance

Risks management surfaced:

Economic and geopolitical conditionsCompetitionExecution risksAdvertising market volatilityLegal and regulatory developments

Q&A highlights

Ben Swinburne · Morgan Stanley

What have you learned from ESPN DTC launch regarding adoption, engagement, and package preferences? Does this change long-term business outlook? Also, regarding the $1.7B cash tax swing in guidance, what else explains the strong underlying cash flow growth of 20%+?

ESPN DTC launch has been very successful, attracting new users, enabling deeper engagement for existing subscribers, and signing up substantial numbers to the ultimate/ultra product (mostly cord-nevers). Strong engagement with new features like SportsCenter for You and Verts, working well for advertisers. About 80% of new ESPN app subscribers bundled with Disney+/Hulu Trio. On cash flow: adjusted for tax timing, growth is ~28% YoY driven by strong OI growth and leveled-off investment spending, supporting continued strong free cash flow, enabling doubled share repurchase and 50% dividend increase.

~80% of new ESPN app subscribers signed up to Trio Bundle (Disney+, Hulu, ESPN)Substantial number of subscribers to ultimate/ultra ESPN productAdjusted cash flow growth approximately 28% YoYDoubled share repurchase authorization

Stephen Cahill · Wells Fargo

What growth expectations exist for the studio in 2026 and beyond given the strong slate (Avatar, Moana, Avengers Doomsday)? On YouTube TV carriage dispute, has EPS guidance provisioned for sustained blackout, or is the economic impact minimal if subscribers resubscribe elsewhere including ESPN app?

Very bullish on studio slate for 2026 with Zootopia 2, Avatar Fire and Ash, Toy Story 5, live-action Moana, and Avengers Doomsday. Already crossed substantial global box office with $2B films in fiscal 2025. Slate strength expected similar into 2027-2028. Q1 guide reflects timing overlap rather than slate weakness. On YouTube TV: guidance includes hedge for ongoing negotiations; impacts include both lost payment and gains from subscribers moving elsewhere. Live negotiation, so limited commentary.

Multiple $2B+ films in fiscal 2025Strong slate expected into 2027-2028Q1 slower due to timing overlap, not slate weaknessAvatar at end of Q1 timing impact

Robert Fishman · Moffett Nathanson

How will Disney+ function as a portal to all Disney assets (parks, commerce, games) beyond Hulu/ESPN bundling? What is the path to sustained double-digit DTC revenue growth combining subscriber engagement and advertising?

Disney+ undergoing biggest product/technology changes since 2019 launch, enabling greater personalization and engagement. Rolling out Hulu as global general entertainment brand. Moving toward one-app experience with AI deployment enabling portal capabilities including commerce, park/hotel/cruise engagement, and games (via Epic Games partnership with integration opportunities). AI enabling user-generated content creation. On DTC revenue growth: guided to double-digit margins as expected; achieved double-digit top-line growth on apples-to-apples basis in Q4 and aspiring to continue; growth via revenue acceleration, not cost-cutting; expecting margin gains in chunks beyond 2026.

Biggest Disney+ product overhaul since 2019Global Hulu expansion as general entertainment brandHires including Adam Smith bringing talentEpic Games partnership with integration capabilities

Jessica Reif-Ehrlich · Bank of America Securities

Given M&A activity in media (company breakups), does Disney see M&A opportunities or risks of stronger competitors? On advertising, what is the outlook for fiscal 2026 across DTC and linear in both entertainment and sports?

On M&A: Disney has strong IP portfolio from past acquisitions (Fox, Lucasfilm, Pixar) and doesn't need additional moves; comfortable with current hand and unlikely to make significant moves as industry consolidates. On advertising: 2025 saw 5% ad growth with sports particularly strong; DTC had supply pressure but CPMs improved last two quarters trending positively; linear driven by subscriber trends; expect advertising growth in 2026 despite overlapping political advertising in Q1.

5% advertising growth in 2025Sports advertising particularly strongDTC CPM improvement in last two quartersPolitical advertising overlap in Q1 2026

Michael Morris · Guggenheim

What are the drivers of experiences segment growth in 2026 (high single-digit operating income growth)? How much from revenue vs. margin? What about NBA investment cost pressures in Q2-Q3 and how does NBA drive long-term growth?

Experiences drivers: cruise meaningful contributor (especially H2 after launch costs and dry docks in H1), mix of pricing and attendance growth, consumer products from film slate. Sports: NBA timing creates bumpiness with material H2 growth for ESPN. NBA is phenomenal property with scale audience attractive to advertisers and strategically beneficial. Parks bookings up 3% in Q1 and up for year; demand tracking well despite Q4 attendance in line with expectations (Epic University impact expected).

Cruise meaningful contributor to growth, especially H2Bookings up 3% in Q1, up for full yearNBA timing creates mid-year content cost pressuresMaterial ESPN growth in H2 from NBA investment

Answers to last quarter's watch list

ESPN DTC launch execution — Management disclosed ~80% of new ESPN app subscribers bundled into the Disney+/Hulu/ESPN trio, with a "substantial" number signing up to the ultimate/ultra tier (mostly cord-nevers). No headline subscriber count was given for the standalone ESPN DTC service. Engagement features (SportsCenter for You, Verts) flagged as working with advertisers.

Resolved positively

Hulu subscriber adds in Q4 — Hulu ended Q4 at 64.1M (vs 55.5M at end of Q3), a +8.6M sequential add — broadly consistent with the prior guide framing. ARPU at $12.20 holds; no churn or quality flag from management.

Resolved positively

Sports segment OI trajectory — FY25 Sports segment OI growth came in below the 18% guide trajectory; the FY26 guide collapses to "low-single digit" growth with Q4 weighting. NBA rights timing is management's explanation, but the magnitude of the cut (18% → low-single digit) is the biggest negative signal in the print.

Resolved negatively

Domestic parks margins — Domestic P&E revenue +6% in Q4 (vs +10% in Q3), and the full Experiences segment posted +6% revenue with international parks +10%. Cruise pre-opening expenses ($50M in Q4 as guided) hit as expected. No headline domestic parks operating margin disclosed in the press release; underlying trajectory looks softer than Q3's +22% OI growth.

Continue monitoring

Entertainment DTC trajectory — DTC operating income $352M in Q4, bringing FY25 Entertainment DTC OI to the $1.3B guide (met). FY26 guide of 10% SVOD operating margin formalises the next leg. Q1 FY26 guide of ~$375M Entertainment DTC SVOD OI implies continued sequential progress.

Resolved positively

What to watch into next quarter

Sports segment OI growth pacing through H1 FY26 — guide is "low-single digit" full-year, weighted to Q4. Watch whether Q1 and Q2 actuals show negative growth (consistent with the H2 weighting story) or whether the cut runs deeper than NBA-timing framing suggests.

Q1 FY26 Entertainment OI bridge — disclosed Q1 headwinds total ~$613M ($400M theatrical comp + $140M political ad + $73M Star India). Watch whether reported Entertainment OI declines align with that bridge or exceeds it.

YouTube TV negotiation outcome — management has hedged FY26 EPS but won't quantify. Watch for a resolution announcement and the implied impact to linear/affiliate revenue and DTC subscriber migration economics.

Entertainment DTC SVOD operating margin trajectory — FY26 guide of 10%; Q1 implied via ~$375M OI guide. Watch the actual Q1 margin print and any forward commentary on the "in chunks beyond 2026" margin path.

Operating cash flow Q1 print — FY26 guide of $19B vs FY25 $10.08B is largely tax-timing per management; underlying growth ~28%. Watch whether Q1 cash flow tracks that 28% underlying rate after isolating tax effects.

Capital return execution cadence — $7B buyback target for FY26 is the most aggressive capital return signal in years. Watch the Q1 pace of repurchase against the $1.75B quarterly run-rate implied.

Sources

Walt Disney Company Q4 FY2025 Press Release / Form 8-K Exhibit 99.1, November 13, 2025 — https://www.sec.gov/Archives/edgar/data/1744489/000174448925000154/fy2025_q4xprxex991.htm

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