The Walt Disney Company (NYSE: DIS) today reported earnings for
its second fiscal quarter ended March 29, 2025.
Financial Results for the
Quarter:
- Revenues increased 7% for Q2 to $23.6 billion from $22.1
billion in Q2 fiscal 2024
- Income before income taxes increased $2.4 billion for Q2 to
$3.1 billion from $0.7 billion in Q2 fiscal 2024
- Total segment operating income(1) increased 15% for Q2 to $4.4
billion from $3.8 billion in Q2 fiscal 2024
- Diluted earnings per share (EPS) for Q2 improved to $1.81 from
a loss per share of $0.01 in Q2 fiscal 2024, and adjusted EPS(1)
increased 20% for Q2 to $1.45 from $1.21 in Q2 fiscal 2024
(1)
Total segment operating income and diluted
EPS excluding certain items (also referred to as adjusted EPS) are
non-GAAP financial measures. The most comparable GAAP measures are
income before income taxes and diluted EPS, respectively. See the
discussion on pages 17 through 21 for how we define and calculate
these measures and a quantitative reconciliation thereof to the
most directly comparable GAAP measures.
Key Points:
- Entertainment: Segment operating income of $1.3 billion, a $0.5
billion increase versus Q2 fiscal 2024
- Direct-to-Consumer operating income increased $289 million to
$336 million
- 180.7 million Disney+ and Hulu subscriptions, an increase of
2.5 million versus Q1 fiscal 2025
- 126.0 million Disney+ subscribers, an increase of 1.4 million
versus Q1 fiscal 2025
- Linear Networks operating income grew 2%; year-over-year growth
includes a comparison to $89 million of operating income in Q2
fiscal 2024 from Star India
- Sports: Segment operating income of $687 million, a decrease of
$91 million versus Q2 fiscal 2024
- Higher programming and production costs primarily due to airing
three additional College Football Playoff games and an additional
NFL game
- Sports revenue increased 5%, reflecting 7% Domestic ESPN
revenue growth
- Domestic advertising revenue growth of 29%, reflecting a 16 ppt
benefit from a change in format of the College Football Playoff and
airing additional College Football Playoff and NFL games
- Sports operating income was adversely impacted by a write-off
due to exiting the Venu joint venture
- Experiences: Segment operating income of $2.5 billion, an
increase of $0.2 billion versus Q2 fiscal 2024
- Domestic Parks & Experiences operating income grew 13% to
$1.8 billion
- Consumer Products operating income grew 14% to $0.4
billion
- Share Repurchases of $1 billion in the quarter, keeping us on
pace to repurchase $3 billion for the year
Guidance and Outlook:
- Q3 Fiscal 2025:
- Entertainment Direct-to-Consumer: Modest increase in Disney+
subscribers compared to Q2 fiscal 2025
- Fiscal Year 2025:
- Adjusted EPS(1) of $5.75, an increase of 16% over fiscal
2024
- Cash provided by operations of $17 billion, a $2 billion
increase over prior guidance driven by the deferral of tax
payments
- Entertainment: Double-digit percentage segment operating income
growth
- Sports: 18% segment operating income growth
- Experiences: 6% to 8% segment operating income growth
- Disney Cruise Line pre-opening expense of ~$200 million, with
~$40 million in Q3 and ~$50 million in Q4
- Equity loss from India JV of ~$300 million driven by purchase
accounting amortization
- We continue to monitor macroeconomic developments for potential
impacts to our businesses and recognize that uncertainty remains
regarding the operating environment for the balance of the fiscal
year
Message From Our CEO:
“Our outstanding performance this quarter—with adjusted EPS(1)
up 20% from the prior year driven by our Entertainment and
Experiences businesses—underscores our continued success building
for growth and executing across our strategic priorities,” said
Robert A. Iger, Chief Executive Officer, The Walt Disney Company.
“Following an excellent first half of the fiscal year, we have a
lot more to look forward to, including our upcoming theatrical
slate, the launch of ESPN’s new DTC offering, and an unprecedented
number of expansion projects underway in our Experiences segment.
Overall, we remain optimistic about the direction of the company
and our outlook for the remainder of the fiscal year.”
(1)
Diluted EPS excluding certain items (also
referred to as adjusted EPS) is a non-GAAP financial measure. The
most comparable GAAP measure is diluted EPS. See the discussion on
pages 17 through 21 for how we define and calculate this measure, a
historical quantitative reconciliation thereof to the most directly
comparable GAAP measure and why the Company is not providing the
forward-looking quantitative reconciliation of diluted EPS
excluding certain items to the most comparable GAAP measure.
SUMMARIZED FINANCIAL RESULTS
The following table summarizes second quarter results for fiscal
2025 and 2024:
Quarter Ended
Six Months Ended
($ in millions, except per share
amounts)
March 29, 2025
March 30, 2024
Change
March 29, 2025
March 30, 2024
Change
Revenues
$
23,621
$
22,083
7
%
$
48,311
$
45,632
6
%
Income before income taxes
$
3,087
$
657
>100 %
$
6,747
$
3,528
91
%
Total segment operating income(1)
$
4,436
$
3,845
15
%
$
9,496
$
7,721
23
%
Diluted EPS
$
1.81
$
(0.01
)
nm
$
3.21
$
1.03
>100 %
Diluted EPS excluding certain items(1)
$
1.45
$
1.21
20
%
$
3.22
$
2.44
32
%
Cash provided by operations
$
6,753
$
3,666
84
%
$
9,958
$
5,851
70
%
Free cash flow(1)
$
4,891
$
2,407
>100 %
$
5,630
$
3,293
71
%
(1)
Total segment operating income, diluted
EPS excluding certain items and free cash flow are non-GAAP
financial measures. The most comparable GAAP measures are income
before income taxes, diluted EPS and cash provided by operations,
respectively. See the discussion on pages 17 through 21 for how we
define and calculate these measures and a reconciliation thereof to
the most directly comparable GAAP measures.
SUMMARIZED SEGMENT FINANCIAL RESULTS
The following table summarizes second quarter segment revenue
and operating income for fiscal 2025 and 2024:
Quarter Ended
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
March 29, 2025
March 30, 2024
Change
Revenues:
Entertainment
$
10,682
$
9,796
9
%
$
21,554
$
19,777
9
%
Sports
4,534
4,312
5
%
9,384
9,147
3
%
Experiences
8,889
8,393
6
%
18,304
17,525
4
%
Eliminations(1)
(484
)
(418
)
(16
)%
(931
)
(817
)
(14
)%
Total revenues
$
23,621
$
22,083
7
%
$
48,311
$
45,632
6
%
Segment operating income:
Entertainment
$
1,258
$
781
61
%
$
2,961
$
1,655
79
%
Sports
687
778
(12
)%
934
675
38
%
Experiences
2,491
2,286
9
%
5,601
5,391
4
%
Total segment operating income(2)
$
4,436
$
3,845
15
%
$
9,496
$
7,721
23
%
(1)
Reflects fees paid by (a) Hulu to ESPN and
the Entertainment linear networks business for the right to air
their networks on Hulu Live and (b) ABC Network and Disney+ to ESPN
to program certain sports content on ABC Network and Disney+.
(2)
Total segment operating income is a
non-GAAP financial measure. The most comparable GAAP measure is
income before income taxes. See the discussion on pages 17 through
21.
DISCUSSION OF SECOND QUARTER SEGMENT RESULTS
Star India
On November 14, 2024, the Company and Reliance Industries
Limited (RIL) completed the formation (the Star India Transaction)
of a joint venture (India joint venture) that combines the
Company’s Star-branded and other general entertainment and sports
television channels and direct-to-consumer Disney+ Hotstar service
in India (Star India) with certain media and entertainment
businesses controlled by RIL. RIL has an effective 56% controlling
interest in the joint venture with 37% held by the Company and 7%
held by a third party investment company.
Upon completion of the Star India Transaction, the Company began
recognizing its 37% share of the India joint venture’s results in
“Equity in the income of investees.” Star India results through
November 14, 2024 are consolidated in the Company’s financial
results.
Entertainment
Revenue and operating income for the Entertainment segment were
as follows:
Quarter Ended
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
March 29, 2025
March 30, 2024
Change
Revenues:
Linear Networks
$
2,418
$
2,765
(13
)%
$
5,035
$
5,568
(10
)%
Direct-to-Consumer
6,118
5,642
8
%
12,190
11,188
9
%
Content Sales/Licensing and Other
2,146
1,389
54
%
4,329
3,021
43
%
$
10,682
$
9,796
9
%
$
21,554
$
19,777
9
%
Operating income (loss):
Linear Networks
$
769
$
752
2
%
$
1,867
$
1,988
(6
)%
Direct-to-Consumer
336
47
>100 %
629
(91
)
nm
Content Sales/Licensing and Other
153
(18
)
nm
465
(242
)
nm
$
1,258
$
781
61
%
$
2,961
$
1,655
79
%
The increase in Entertainment operating income in the current
quarter compared to the prior-year quarter was due to improved
results at Direct-to-Consumer and Content Sales/Licensing and
Other.
Linear Networks
Linear Networks revenues and operating income were as
follows:
Quarter Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Revenue
Domestic
$
2,195
$
2,269
(3
)%
International
223
496
(55
)%
$
2,418
$
2,765
(13
)%
Operating income
Domestic
$
625
$
520
20
%
International
15
92
(84
)%
Equity in the income of investees
129
140
(8
)%
$
769
$
752
2
%
Domestic
Domestic operating income in the current quarter increased
compared to the prior-year quarter due to:
- A decrease in marketing costs primarily attributable to fewer
new shows at our cable channels and lower marketing costs at ABC
Network reflecting more season premieres in the prior-year
quarter
- Lower programming and production costs driven by lower average
cost programming at our cable channels, partially offset by a
higher average cost mix of programming at ABC Network
- A decrease in technology costs
- Affiliate revenue was comparable to the prior-year quarter as
higher effective rates were offset by fewer subscribers
- A decrease in advertising revenue due to lower rates and fewer
impressions attributable to lower average viewership
International
The decrease in international operating income was due to the
Star India Transaction.
Direct-to-Consumer
Direct-to-Consumer revenues and operating income were as
follows:
Quarter Ended
Change
($ in millions)
March 29, 2025
March 30, 2024
Revenue
$
6,118
$
5,642
8
%
Operating income
$
336
$
47
>100 %
The increase in operating income in the current quarter compared
to the prior-year quarter was due to:
- Subscription revenue growth attributable to higher effective
rates, reflecting increases in pricing, and more subscribers,
partially offset by an unfavorable foreign exchange impact and the
absence of Star India subscription revenue in the current quarter
due to the Star India Transaction
- An increase in advertising revenue due to growth in
impressions, partially offset by lower rates
- Higher technology and distribution costs
- An increase in programming and production costs reflecting:
- Higher subscriber-based license fees attributable to rate
increases for programming the Hulu Live TV service and more
subscribers to bundles with third-party offerings, including
premium add-ons
- The absence of Star India programming costs in the current
quarter due to the Star India Transaction
Key Metrics - Second Quarter of Fiscal
2025 Comparison to First Quarter of Fiscal 2025
In addition to revenue, costs and operating income, management
uses the following key metrics(1) to analyze trends and evaluate
the overall performance of our Disney+ and Hulu direct-to-consumer
(DTC) product offerings, and we believe these metrics are useful to
investors in analyzing the business. The following tables and
related discussion are on a sequential quarter basis.
Paid subscribers at:
(in millions)
March 29, 2025
December 28, 2024
Change
Disney+
Domestic (U.S. and Canada)
57.8
56.8
2
%
International
68.2
67.8
1
%
Total Disney+(2)
126.0
124.6
1
%
Hulu
SVOD Only
50.3
49.0
3
%
Live TV + SVOD
4.4
4.6
(4
)%
Total Hulu(2)
54.7
53.6
2
%
Average Monthly Revenue Per Paid Subscriber for the quarter
ended:
March 29, 2025
December 28, 2024
Change
Disney+
Domestic (U.S. and Canada)
$
8.06
$
7.99
1
%
International
7.52
7.19
5
%
Disney+
7.77
7.55
3
%
Hulu
SVOD Only
12.36
12.52
(1
)%
Live TV + SVOD
99.94
99.22
1
%
(1)
See discussion on page 16—DTC Product
Descriptions and Key Definitions
(2)
Total may not equal the sum of the column
due to rounding
Domestic Disney+ average monthly revenue per paid subscriber
increased from $7.99 to $8.06 due to increases in pricing,
partially offset by lower advertising revenue.
International Disney+ average monthly revenue per paid
subscriber increased from $7.19 to $7.52 due to the impact of
subscriber mix shifts and increases in pricing, partially offset by
an unfavorable foreign exchange impact.
Hulu SVOD Only average monthly revenue per paid subscriber
decreased from $12.52 to $12.36 due to lower advertising revenue,
partially offset by increases in pricing.
Hulu Live TV + SVOD average monthly revenue per paid subscriber
increased from $99.22 to $99.94 due to increases in pricing,
partially offset by lower advertising revenue.
Content Sales/Licensing and Other
Content Sales/Licensing and Other revenues and operating income
(loss) were as follows:
Quarter Ended
Change
($ in millions)
March 29, 2025
March 30, 2024
Revenue
$
2,146
$
1,389
54
%
Operating income (loss)
$
153
$
(18
)
nm
The improvement in operating results was due to:
- Higher TV/VOD distribution results due to an increase in sales
of episodic content including an impact from the timing of episodes
delivered
- An increase in home entertainment distribution results driven
by the performance of Moana 2 in the current quarter
- Theatrical distribution results were comparable to the
prior-year quarter, as the carryover performance of first quarter
releases, Mufasa: The Lion King and Moana 2, was largely offset by
the results of second quarter releases, Snow White and Captain
America: Brave New World, including the costs of their initial
marketing campaigns. There were no significant titles released the
prior-year quarter.
Sports
Sports revenues and operating income (loss) were as follows:
Quarter Ended
Change
($ in millions)
March 29, 2025
March 30, 2024
Revenue
ESPN
Domestic
$
4,155
$
3,866
7
%
International
379
341
11
%
4,534
4,207
8
%
Star India
—
105
(100
)%
$
4,534
$
4,312
5
%
Operating income (loss)
ESPN
Domestic
$
648
$
780
(17
)%
International
21
19
11
%
669
799
(16
)%
Star India
—
(27
)
100
%
Equity in the income of investees
18
6
>100 %
$
687
$
778
(12
)%
Domestic ESPN
The decrease in domestic ESPN operating results in the current
quarter compared to the prior-year quarter reflected:
- Higher programming and production costs primarily attributable
to airing three additional College Football Playoff (CFP) games as
well as one additional NFL game due to timing
- Advertising revenue growth due to increases in rates and
average viewership. The increase in advertising revenue included a
benefit from airing additional CFP and NFL games
- A modest increase in affiliate revenue reflecting higher
effective rates, largely offset by fewer subscribers
Star India
The operating loss in Star India in the prior-year quarter
reflected Indian Premier League cricket programming.
Key Metrics - Second Quarter of Fiscal
2025 Comparison to First Quarter of Fiscal 2025
In addition to revenue, costs and operating income, management
uses the following key metrics(1) to analyze trends and evaluate
the overall performance of our ESPN+ DTC product offering, and we
believe these metrics are useful to investors in analyzing the
business. The following table is on a sequential quarter basis.
March 29, 2025
December 28, 2024
Change
Paid subscribers at: (in millions)
24.1
24.9
(3
)%
Average Monthly Revenue Per Paid
Subscriber for the quarter ended:
$
6.58
$
6.36
3
%
(1)
See discussion on page 16—DTC Product
Descriptions and Key Definitions
ESPN+ average monthly revenue per paid subscriber increased from
$6.36 to 6.58 primarily due to increases in pricing and the impact
of subscriber mix shifts.
Experiences
Experiences revenues and operating income were as follows:
Quarter Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Revenue
Parks & Experiences
Domestic
$
6,499
$
5,958
9
%
International
1,441
1,522
(5
)%
Consumer Products
949
913
4
%
$
8,889
$
8,393
6
%
Operating income
Parks & Experiences
Domestic
$
1,823
$
1,607
13
%
International
225
292
(23
)%
Consumer Products
443
387
14
%
$
2,491
$
2,286
9
%
Domestic Parks and Experiences
Operating results at our domestic parks and experiences
increased compared to the prior-year quarter primarily due to
growth at our domestic parks and resorts and, to a lesser extent,
Disney Vacation Club and Disney Cruise Line reflecting:
- Higher volumes attributable to increases in passenger cruise
days, theme park attendance, occupied room nights and Disney
Vacation Club unit sales. Additional passenger cruise days
reflected the launch of the Disney Treasure in the first quarter of
the current year
- An increase in guest spending due to higher spending at our
theme parks
- Increased costs primarily attributable to the fleet expansion
at Disney Cruise Line and inflation
International Parks and
Experiences
The decrease in operating income at our international parks and
experiences was attributable to Shanghai Disney Resort and Hong
Kong Disneyland Resort due to lower theme park attendance and
increased costs.
Consumer Products
The increase in operating income at consumer products was due to
higher licensing revenue, including a benefit from the release of
the licensed game, Marvel Rivals.
OTHER FINANCIAL INFORMATION
Restructuring and Impairment
Charges
Charges in the current quarter were $109 million for content
impairments. Charges in the prior-year quarter were $2,052 million
primarily for goodwill impairments related to Star India and
entertainment linear networks.
Interest Expense, net
Interest expense, net was as follows:
Quarter Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Interest expense
$
(471
)
$
(501
)
6
%
Interest income, investment income and
other
125
190
(34
)%
Interest expense, net
$
(346
)
$
(311
)
(11
)%
The decrease in interest expense was due to lower average rates
and debt balances, partially offset by a decrease in capitalized
interest.
The decrease in interest income, investment income and other was
due to an unfavorable comparison related to pension and
postretirement benefit costs, other than service cost, the impact
of lower cash and cash equivalent balances and net investment
losses in the current quarter.
Equity in the Income of
Investees
Equity in the income of investees was as follows:
Quarter Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Amounts included in segment results:
Entertainment
$
124
$
138
(10
)%
Sports
18
6
>100 %
Equity in the loss of India joint
venture
(103
)
—
nm
Amortization of TFCF Corporation (TFCF)
intangible assets related to an equity investee
(3
)
(3
)
—
%
Equity in the income of investees
$
36
$
141
(74
)%
Income from equity investees decreased $105 million, to $36
million from $141 million, due to losses from the India joint
venture in the current quarter.
Income Taxes
The effective income tax rate was as follows:
Quarter Ended
March 29, 2025
March 30, 2024
Income before income taxes
$
3,087
$
657
Income tax (benefit) expense
(314
)
441
Effective income tax rate
(10.2
)%
67.1
%
The effective income tax rate in the current quarter reflected a
non-cash tax benefit from the resolution of a prior-year tax
matter.
The effective income tax rate in the prior-year quarter
reflected an unfavorable impact from goodwill impairments, which
are not tax deductible, partially offset by a non-cash tax benefit
in connection with the Star India Transaction.
Excluding the impact of these items, the effective income tax
rate would be 22.7% in the current quarter compared to 20.7% in the
prior-year quarter.
Noncontrolling Interests
Net income attributable to noncontrolling interests was as
follows:
Quarter Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Net income attributable to noncontrolling
interests
$
(126
)
$
(236
)
47
%
The decrease in net income attributable to noncontrolling
interests was due to costs in connection with the purchase of
NBCU’s interest in Hulu in the prior-year quarter and lower results
at ESPN, Shanghai Disney Resort and, to a lesser extent, Hong Kong
Disneyland Resort.
Net income attributable to noncontrolling interests is
determined on income after royalties and management fees, financing
costs and income taxes, as applicable.
Cash from Operations
Cash provided by operations and free cash flow were as
follows:
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
Cash provided by operations
$
9,958
$
5,851
$
4,107
Investments in parks, resorts and other
property
(4,328
)
(2,558
)
(1,770
)
Free cash flow(1)
$
5,630
$
3,293
$
2,337
(1)
Free cash flow is not a financial measure
defined by GAAP. The most comparable GAAP measure is cash provided
by operations. See the discussion on pages 17 through 21.
Cash provided by operations increased $4.1 billion to $10.0
billion in the current period from $5.9 billion in the prior-year
period driven by:
- Lower tax payments in the current period compared to the
prior-year period due to payments in the first half of fiscal 2024
for U.S. federal and California state income taxes related to
fiscal 2023 that had been deferred pursuant to relief related to
2023 winter storms in California. In addition, fiscal 2025 U.S.
federal and California state income tax payments have been deferred
until October 2025 pursuant to relief related to the 2025 wildfires
in California.
- Higher operating income and, to a lesser extent, lower spending
on content at Entertainment
Capital Expenditures
Investments in parks, resorts and other property were as
follows:
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Entertainment
$
(522
)
$
(522
)
Sports
—
(1
)
Experiences
Domestic
(3,022
)
(1,198
)
International
(561
)
(466
)
Total Experiences
(3,583
)
(1,664
)
Corporate
(223
)
(371
)
Total investments in parks, resorts and
other property
$
(4,328
)
$
(2,558
)
Capital expenditures increased to $4.3 billion from $2.6 billion
due to higher spend on cruise ship fleet expansion at the
Experiences segment.
Depreciation Expense
Depreciation expense was as follows:
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Entertainment
$
355
$
332
Sports
21
22
Experiences
Domestic
951
850
International
379
353
Total Experiences
1,330
1,203
Corporate
160
105
Total depreciation expense
$
1,866
$
1,662
THE WALT DISNEY
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(unaudited; $ in millions,
except per share data)
Quarter Ended
Six Months Ended
March 29, 2025
March 30, 2024
March 29, 2025
March 30, 2024
Revenues
$
23,621
$
22,083
$
48,311
$
45,632
Costs and expenses
(20,115
)
(19,204
)
(40,727
)
(39,817
)
Restructuring and impairment charges
(109
)
(2,052
)
(252
)
(2,052
)
Interest expense, net
(346
)
(311
)
(713
)
(557
)
Equity in the income of investees
36
141
128
322
Income before income taxes
3,087
657
6,747
3,528
Income taxes
314
(441
)
(702
)
(1,161
)
Net income
3,401
216
6,045
2,367
Net income attributable to noncontrolling
interests
(126
)
(236
)
(216
)
(476
)
Net income (loss) attributable to The Walt
Disney Company (Disney)
$
3,275
$
(20
)
$
5,829
$
1,891
Earnings (loss) per share attributable to
Disney:
Diluted
$
1.81
$
(0.01
)
$
3.21
$
1.03
Basic
$
1.81
$
(0.01
)
$
3.22
$
1.03
Weighted average number of common and
common equivalent shares outstanding:
Diluted
1,814
1,834
1,816
1,838
Basic
1,808
1,834
1,810
1,833
THE WALT DISNEY
COMPANY
CONDENSED CONSOLIDATED BALANCE
SHEETS
(unaudited; $ in millions,
except per share data)
March 29, 2025
September 28, 2024
ASSETS
Current assets
Cash and cash equivalents
$
5,852
$
6,002
Receivables, net
12,571
12,729
Inventories
1,999
2,022
Content advances
1,063
2,097
Other current assets
1,250
2,391
Total current assets
22,735
25,241
Produced and licensed content costs
31,820
32,312
Investments
8,794
4,459
Parks, resorts and other property
Attractions, buildings and equipment
79,721
76,674
Accumulated depreciation
(47,532
)
(45,506
)
32,189
31,168
Projects in progress
5,740
4,728
Land
1,166
1,145
39,095
37,041
Intangible assets, net
10,006
10,739
Goodwill
73,313
73,326
Other assets
10,070
13,101
Total assets
$
195,833
$
196,219
LIABILITIES AND EQUITY
Current liabilities
Accounts payable and other accrued
liabilities
$
20,729
$
21,070
Current portion of borrowings
6,446
6,845
Deferred revenue and other
6,854
6,684
Total current liabilities
34,029
34,599
Borrowings
36,443
38,970
Deferred income taxes
6,298
6,277
Other long-term liabilities
10,297
10,851
Commitments and contingencies
Equity
Preferred stock
—
—
Common stock, $0.01 par value, Authorized
– 4.6 billion shares, Issued – 1.9 billion shares
59,199
58,592
Retained earnings
53,733
49,722
Accumulated other comprehensive loss
(2,877
)
(3,699
)
Treasury stock, at cost, 63 million shares
at March 29, 2025 and 47 million shares at September 28, 2024
(5,716
)
(3,919
)
Total Disney Shareholders’ equity
104,339
100,696
Noncontrolling interests
4,427
4,826
Total equity
108,766
105,522
Total liabilities and equity
$
195,833
$
196,219
THE WALT DISNEY
COMPANY
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(unaudited; $ in
millions)
Six Months Ended
March 29, 2025
March 30, 2024
OPERATING ACTIVITIES
Net income
$
6,045
$
2,367
Depreciation and amortization
2,600
2,485
Impairments of goodwill, produced and
licensed content and other assets
240
2,038
Deferred income taxes
93
(211
)
Equity in the income of investees
(128
)
(322
)
Cash distributions received from equity
investees
79
300
Net change in produced and licensed
content costs and advances
1,889
1,699
Equity-based compensation
647
675
Other, net
(35
)
(6
)
Changes in operating assets and
liabilities
Receivables
(367
)
(156
)
Inventories
(1
)
26
Other assets
10
(185
)
Accounts payable and other liabilities
(1,025
)
(1,075
)
Income taxes
(89
)
(1,784
)
Cash provided by operations
9,958
5,851
INVESTING ACTIVITIES
Investments in parks, resorts and other
property
(4,328
)
(2,558
)
Other, net
(145
)
5
Cash used in investing activities
(4,473
)
(2,553
)
FINANCING ACTIVITIES
Commercial paper borrowings (payments),
net
(791
)
42
Borrowings
1,057
133
Reduction of borrowings
(2,913
)
(645
)
Dividends
(905
)
(549
)
Repurchases of common stock
(1,785
)
(1,001
)
Acquisition of redeemable noncontrolling
interests
—
(8,610
)
Other, net
(216
)
(194
)
Cash used in financing activities
(5,553
)
(10,824
)
Impact of exchange rates on cash, cash
equivalents and restricted cash
(76
)
17
Change in cash, cash equivalents and
restricted cash
(144
)
(7,509
)
Cash, cash equivalents and restricted
cash, beginning of period
6,102
14,235
Cash, cash equivalents and restricted
cash, end of period
$
5,958
$
6,726
DTC PRODUCT DESCRIPTIONS AND KEY
DEFINITIONS
Product offerings
In the U.S., Disney+, ESPN+ and Hulu SVOD Only are each offered
as a standalone service or as part of various multi-product
offerings. Hulu Live TV + SVOD includes Disney+ and ESPN+. Disney+
is available in more than 150 countries and territories outside the
U.S. Depending on the market, our services can be purchased on our
websites or through third-party platforms/apps or are available via
wholesale arrangements.
Paid subscribers
Paid subscribers reflect subscribers for which we recognized
subscription revenue. Certain product offerings provide the option
for an extra member to be added to an account (extra member
add-on). These extra members are not counted as paid subscribers.
Subscribers cease to be a paid subscriber as of their effective
cancellation date or as a result of a failed payment method.
Subscribers to multi-product offerings in the U.S. are counted as a
paid subscriber for each of the Company's services included in the
multi-product offering, and subscribers to Hulu Live TV + SVOD are
counted as one paid subscriber for each of the Hulu Live TV + SVOD,
Disney+ and ESPN+ services. Subscribers include those who receive
an entitlement to a service through wholesale arrangements,
including those for which the service is available to each
subscriber of an existing content distribution tier. When we
aggregate the total number of paid subscribers across our DTC
streaming services, we refer to them as paid subscriptions.
International Disney+
International Disney+ includes the Disney+ service outside the
U.S. and Canada.
Average Monthly Revenue Per Paid
Subscriber
Hulu and ESPN+ average monthly revenue per paid subscriber is
calculated based on the average of the monthly average paid
subscribers for each month in the period. The monthly average paid
subscribers is calculated as the sum of the beginning of the month
and end of the month paid subscriber count, divided by two. Disney+
average monthly revenue per paid subscriber is calculated using a
daily average of paid subscribers for the period. Revenue includes
subscription fees, advertising (excluding revenue earned from
selling advertising spots to other Company businesses), premium and
feature add-on revenue and extra member add-on revenue but excludes
Pay-Per-View revenue. Advertising revenue generated by content on
one DTC streaming service that is accessed through another DTC
streaming service by subscribers to both streaming services is
allocated between both streaming services. The average revenue per
paid subscriber is net of discounts on offerings that carry more
than one service. Revenue is allocated to each service based on the
relative retail or wholesale price of each service on a standalone
basis. Hulu Live TV + SVOD revenue is allocated to the SVOD
services based on the wholesale price of the Hulu SVOD Only,
Disney+ and ESPN+ multi-product offering. In general, wholesale
arrangements have a lower average monthly revenue per paid
subscriber than subscribers that we acquire directly or through
third-party platforms.
NON-GAAP FINANCIAL
MEASURES
This earnings release presents diluted EPS excluding certain
items (also referred to as adjusted EPS), total segment operating
income and free cash flow. Diluted EPS excluding certain items,
total segment operating income and free cash flow are important
financial measures for the Company but are not financial measures
defined by GAAP.
These measures should be reviewed in conjunction with the most
comparable GAAP financial measures and are not presented as
alternative measures of diluted EPS, income before income taxes or
cash provided by operations as determined in accordance with GAAP.
Diluted EPS excluding certain items, total segment operating income
and free cash flow as we have calculated them may not be comparable
to similarly titled measures reported by other companies.
Our definitions and calculations of diluted EPS excluding
certain items, total segment operating income and free cash flow,
as well as quantitative reconciliations of each of these measures
to the most directly comparable GAAP financial measure, are
provided below.
The Company is not providing the forward-looking measure for
diluted EPS, which is the most directly comparable GAAP measure to
diluted EPS excluding certain items, or a quantitative
reconciliation of forward-looking diluted EPS excluding certain
items to that most directly comparable GAAP measure. The Company is
unable to predict or estimate with reasonable certainty the
ultimate outcome of certain significant items required for such
GAAP measure without unreasonable effort. Information about other
adjusting items that is currently not available to the Company
could have a potentially unpredictable and significant impact on
future GAAP financial results.
Diluted EPS excluding certain
items
The Company uses diluted EPS excluding (1) certain items
affecting comparability of results from period to period and (2)
amortization of TFCF and Hulu intangible assets, including purchase
accounting step-up adjustments for released content, to facilitate
the evaluation of the performance of the Company’s operations
exclusive of these items, and these adjustments reflect how senior
management is evaluating segment performance.
The Company believes that providing diluted EPS exclusive of
certain items impacting comparability is useful to investors,
particularly where the impact of the excluded items is significant
in relation to reported earnings and because the measure allows for
comparability between periods of the operating performance of the
Company’s business and allows investors to evaluate the impact of
these items separately.
The Company further believes that providing diluted EPS
exclusive of amortization of TFCF and Hulu intangible assets
associated with the acquisition in 2019 is useful to investors
because the TFCF and Hulu acquisition was considerably larger than
the Company’s historic acquisitions with a significantly greater
acquisition accounting impact.
The following table reconciles reported diluted EPS to diluted
EPS excluding certain items for the second quarter:
($ in millions except EPS)
Pre-Tax Income/
Loss
Tax Benefit/
Expense(1)
After-Tax Income/
Loss(2)
Diluted EPS(3)
Change vs. prior-year period
Quarter Ended March 29, 2025
As reported
$
3,087
$
314
$
3,401
$
1.81
nm
Exclude:
Resolution of a prior-year tax matter
—
(1,016
)
(1,016
)
(0.56
)
Amortization of TFCF and Hulu intangible
assets and fair value step-up on film and television costs(4)
396
(92
)
304
0.16
Restructuring and impairment
charges(5)
109
(25
)
84
0.05
Excluding certain items
$
3,592
$
(819
)
$
2,773
$
1.45
20
%
Quarter Ended March 30, 2024
As reported
$
657
$
(441
)
$
216
$
(0.01
)
Exclude:
Restructuring and impairment
charges(5)
2,052
(121
)
1,931
1.06
Amortization of TFCF and Hulu intangible
assets and fair value step-up on film and television costs(4)
434
(101
)
333
0.17
Excluding certain items
$
3,143
$
(663
)
$
2,480
$
1.21
(1)
Tax benefit/expense is determined using
the tax rate applicable to the individual item.
(2)
Before noncontrolling interest share.
(3)
Net of noncontrolling interest share,
where applicable. Total may not equal the sum of the column due to
rounding.
(4)
For the current quarter, intangible asset
amortization was $327 million, step-up amortization was $66 million
and amortization of intangible assets related to a TFCF equity
investee was $3 million. For the prior-year quarter, intangible
asset amortization was $362 million, step-up amortization was $69
million and amortization of intangible assets related to a TFCF
equity investee was $3 million.
(5)
Amounts for the current quarter reflect
content impairments ($109 million). Amounts for the prior-year
quarter include impairments of goodwill ($2,038 million).
The following table reconciles reported diluted EPS to diluted
EPS excluding certain items for the six-month period:
($ in millions except EPS)
Pre-Tax Income/
Loss
Tax Benefit/
Expense(1)
After-Tax Income/
Loss(2)
Diluted EPS(3)
Change vs. prior year
Six Months Ended March 29, 2025:
As reported
$
6,747
$
(702
)
$
6,045
$
3.21
>100 %
Exclude:
Amortization of TFCF and Hulu intangible
assets and fair value step-up on film and television costs(4)
793
(184
)
609
0.32
Restructuring and impairment
charges(5)
252
188
440
0.25
Resolution of a prior-year tax matter
—
(1,016
)
(1,016
)
(0.56
)
Excluding certain items
$
7,792
$
(1,714
)
$
6,078
$
3.22
32
%
Six Months Ended March 30, 2024:
As reported
$
3,528
$
(1,161
)
$
2,367
$
1.03
Exclude:
Restructuring and impairment
charges(5)
2,052
(121
)
1,931
1.06
Amortization of TFCF and Hulu intangible
assets and fair value step-up on film and television costs(4)
885
(206
)
679
0.36
Excluding certain items
$
6,465
$
(1,488
)
$
4,977
$
2.44
(1)
Tax benefit/expense is determined using
the tax rate applicable to the individual item.
(2)
Before noncontrolling interest share.
(3)
Net of noncontrolling interest share,
where applicable. Total may not equal the sum of the column due to
rounding.
(4)
For the current period, intangible asset
amortization was $654 million, step-up amortization was $133
million and amortization of intangible assets related to a TFCF
equity investee was $6 million. For the prior-year period,
intangible asset amortization was $742 million, step-up
amortization was $137 million and amortization of intangible assets
related to a TFCF equity investee was $6 million.
(5)
Amounts for the current period include
impairment charges related to the Star India Transaction ($143
million) and content ($109 million). Tax expense in the current
period includes the estimated tax impact of these charges and a
non-cash tax charge of $244 million related to the Star India
Transaction. Amounts for the prior-year period include impairments
of goodwill ($2,038 million).
Total segment operating income
The Company evaluates the performance of its operating segments
based on segment operating income, and management uses total
segment operating income (the sum of segment operating income from
all of the Company’s segments) as a measure of the performance of
operating businesses separate from non-operating factors. The
Company believes that information about total segment operating
income assists investors by allowing them to evaluate changes in
the operating results of the Company’s portfolio of businesses
separate from non-operational factors that affect net income, thus
providing separate insight into both operations and other factors
that affect reported results.
The following table reconciles income before income taxes to
total segment operating income:
Quarter Ended
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
March 29, 2025
March 30, 2024
Change
Income before income taxes
$
3,087
$
657
>100 %
$
6,747
$
3,528
91
%
Add (subtract):
Corporate and unallocated shared
expenses
395
391
(1
)%
855
699
(22
)%
Equity in the loss of India joint
venture
103
—
nm
136
—
nm
Restructuring and impairment charges
109
2,052
95
%
252
2,052
88
%
Interest expense, net
346
311
(11
)%
713
557
(28
)%
Amortization of TFCF and Hulu intangible
assets and fair value step-up on film and television costs
396
434
9
%
793
885
10
%
Total segment operating income
$
4,436
$
3,845
15
%
$
9,496
$
7,721
23
%
Free cash flow
The Company uses free cash flow (cash provided by operations
less investments in parks, resorts and other property), among other
measures, to evaluate the ability of its operations to generate
cash that is available for purposes other than capital
expenditures. Management believes that information about free cash
flow provides investors with an important perspective on the cash
available to service debt obligations, make strategic acquisitions
and investments and pay dividends or repurchase shares.
The following table presents a summary of the Company’s
consolidated cash flows:
Quarter Ended
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
March 29, 2025
March 30, 2024
Cash provided by operations
$
6,753
$
3,666
$
9,958
$
5,851
Cash used in investing activities
(1,898
)
(1,307
)
(4,473
)
(2,553
)
Cash used in financing activities
(4,556
)
(2,818
)
(5,553
)
(10,824
)
Impact of exchange rates on cash, cash
equivalents and restricted cash
77
(62
)
(76
)
17
Change in cash, cash equivalents and
restricted cash
376
(521
)
(144
)
(7,509
)
Cash, cash equivalents and restricted
cash, beginning of period
5,582
7,247
6,102
14,235
Cash, cash equivalents and restricted
cash, end of period
$
5,958
$
6,726
$
5,958
$
6,726
The following table reconciles the Company’s consolidated cash
provided by operations to free cash flow:
Quarter Ended
Six Months Ended
($ in millions)
March 29, 2025
March 30, 2024
Change
March 29, 2025
March 30, 2024
Change
Cash provided by operations
$
6,753
$
3,666
$
3,087
$
9,958
$
5,851
$
4,107
Investments in parks, resorts and other
property
(1,862
)
(1,259
)
(603
)
(4,328
)
(2,558
)
(1,770
)
Free cash flow
$
4,891
$
2,407
$
2,484
$
5,630
$
3,293
$
2,337
FORWARD-LOOKING STATEMENTS
Certain statements and information in this earnings release may
constitute “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995, including
statements regarding our expectations, beliefs, plans, financial
prospects, trends or outlook and guidance; financial or performance
estimates and expectations (including estimated or expected
revenues, earnings, operating income, cash position, costs,
expenses and impact of certain items) and expected drivers;
direct-to-consumer prospects, including expectations for
subscribers; prospects and consumer demand for our travel and
entertainment offerings; business and other plans; strategic
priorities and initiatives and other statements that are not
historical in nature. Any information that is not historical in
nature included in this earnings release is subject to change.
These statements are made on the basis of management’s views and
assumptions regarding future events and business performance as of
the time the statements are made. Management does not undertake any
obligation to update these statements.
Actual results may differ materially from those expressed or
implied. Such differences may result from actions taken by the
Company, including restructuring or strategic initiatives
(including capital investments, asset acquisitions or dispositions,
new or expanded business lines or cessation of certain operations),
our execution of our business plans (including the content we
create and IP we invest in, our pricing decisions, our cost
structure and our management and other personnel decisions), our
ability to quickly execute on cost rationalization while preserving
revenue, the discovery of additional information or other business
decisions, as well as from developments beyond the Company’s
control, including:
- the occurrence of subsequent events;
- deterioration in domestic and global economic conditions or
failure of conditions to improve as anticipated;
- deterioration in or pressures from competitive conditions,
including competition to create or acquire content, competition for
talent and competition for advertising revenue;
- consumer preferences and acceptance of our content, offerings,
pricing model and price increases, and corresponding subscriber
additions and churn, and the market for advertising sales on our
DTC streaming services and linear networks;
- health concerns and their impact on our businesses and
productions;
- international, including tariffs and other trade policies,
political or military developments;
- regulatory and legal developments;
- technological developments;
- labor markets and activities, including work stoppages;
- adverse weather conditions or natural disasters; and
- availability of content.
Such developments may further affect entertainment, travel and
leisure businesses generally and may, among other things, affect
(or further affect, as applicable):
- our operations, business plans or profitability, including
direct-to-consumer profitability;
- demand for our products and services;
- the performance of the Company’s content;
- our ability to create or obtain desirable content at or under
the value we assign the content;
- the advertising market for programming;
- taxation; and
- performance of some or all Company businesses either directly
or through their impact on those who distribute our products.
Additional factors are set forth in the Company’s most recent
Annual Report on Form 10-K, including under the captions “Risk
Factors,” “Management’s Discussion and Analysis of Financial
Condition and Results of Operations,” and “Business,” quarterly
reports on Form 10-Q, including under the captions “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations,” and subsequent filings with the
Securities and Exchange Commission.
The terms “Company,” “we,” and “our” are used in this report to
refer collectively to the parent company and the subsidiaries
through which our various businesses are actually conducted.
PREPARED EARNINGS REMARKS AND CONFERENCE CALL
INFORMATION
In conjunction with this release, The Walt Disney Company will
post prepared management remarks (Executive Commentary) at
www.disney.com/investors and will host a conference call today, May
7, 2025, at 8:30 AM EDT/5:30 AM PDT via a live Webcast. To access
the Webcast go to www.disney.com/investors. The Webcast replay will
also be available on the site.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250507798805/en/
David Jefferson Corporate Communications 818-560-4832
Carlos Gomez Investor Relations 818-560-1933
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