Growth at Disney’s streaming and parks and experiences were the highlights of a third quarter that saw generally solid numbers while 2% overall revenue increase to $23.7bn was slightly behind expectations.
The company also said that after it acquired Comcast’s 33% share in Hulu last month, Hulu will be fully integrated into the Disney+ app in 2026, and, starting this autumn, will replace the Star tile on Disney+ internationally.
It also emerged that starting later this year Disney will stop reporting subscriber numbers for Disney+, Hulu, and ESPN+ – similar to Netflix –in its Q1 fiscal year 2026 report.
Across all segments, adjusted earnings per share increased 16% to $1.61 from $1.39 one year ago. Operating income grew 8% to $4.6bn from $4.2bn a year ago.
Streaming
Streaming revenue for the period ending June 28 climbed 6% over the year-ago quarter to $6.2bn and the company swung to a $346m profit compared to a $19m loss one year ago. Global Disney+ subscribers increased 1% or by 1.8m over Q2 to $127.8m. Factoring in Hulu, members gained 2.6m over Q2 to reach 183m.
Streaming profit gains were attributed to price increases, subscriber growth, and the absence of Star India subscription revenue after Disney and Reliance’s JioCinema created a stand-alone joint venture in an $8.5bn merger in November 2024. A drop in programming and production costs also played a role in the profit increase, in part because in the year-ago period Star India-owned Disney+ Hotstar carried International Cricket Council (ICC) programming.
As Disney’s streaming business grows and executives seek to cut down on churn – the number of people who terminate their memberships – CEO Bob Iger said the company will probably invest in selective international markets where there is potential to grow subscriptions, advertising revenue, and bottom line. He said he did not expect content spend to increase significantly.
Studios results
Operating income at the Entertainment segment encompassing streaming, studios and linear TV amounted to $1bn, marking a $179m year-on-year drop.
Studio operating income fell by $275m to a $21m loss compared to one year ago when Inside Out 2 was in its early days and racing towards the $1.7bn global box office. However Iger noted “renewed momentum” at the studio after shifting the focus to quality over quantity.
The Disney CEO namechecked the studio’s $1bn perfomer Lilo & Stitch, a live-action adaptation of an animated property that has seen a 70% rise in merchandise and is the second-highest merchandise seller this year behind Mickey Mouse.
“We continue to be focused on creating new IP […] but the value of our older IP remains significant,” Iger told analysts on a call after the Q3 numbers were published early on Wednesday. “The opportunity is to either create sequels or to bring them forward in a modern way, or convert what was previously animation to live-action, like we’re doing with Moana in 2026.”
Iger said the company was developing original property at 20th Century Studios and Searchlight Pictures. He hailed strong reviews for Marvel’s The Fantastic Four: First Steps – which has grossed a so-so $371.9m worldwide after two weekends – and pointed out upcoming 2025 releases Zootopia 2 and Avatar: Fire And Ash.
At the linear networks, operating income fell 14% against the year-ago period to $587m, which Disney executives attributed to a decline in advertising revenue due to lower viewership and rates, and the aforementioned international Star India transaction.
Experiences
Revenue at the domestic Parks & Experiences segment increased by 10% to $6.4bn, and gained 6% internationally to reach $1.7bn. Domestic operating income grew by 22% to $1.7bn while international fell 3% to $422m.
Sports
In the Sports segment there has been a lot of activity around ESPN as media titans vie for significant landgrabs. On Tuesday Disney said ESPN and the NFL (American Football’s National Football League) had struck a deal to bring NFL programming to ESPN’s upcoming enhanced stand-alone streaming service as well as to Disney+ that will see NFL take a 10% ownership stake in ESPN.
The streaming service will launch on August 21 at $29.99 a month for the unlimited plan (and will be bundled with Disney+ and Hulu with ads for an initial $29.99, rising to $35.99 after one year) and includes betting and multi-view options, among other enhancements. Disney is looking at potential bundles with other sports offerings.
Domestic revenue at ESPN gained 1% to $3.9bn and international climbed by 2% to $379m. Domestic operating income fell 7% to $1bn due to an increase in programming and production costs.
Disney stock fell 2.7% to $115.17 by close of trading.
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