The Walt Disney Company Reports First Quarter Earnings for Fiscal 2025
Disney (DIS) reported strong Q1 fiscal 2025 results with revenues increasing 5% to $24.7 billion. The company's diluted EPS rose 35% to $1.40, while adjusted EPS grew 44% to $1.76. Total segment operating income increased 31% to $5.1 billion.
Entertainment segment operating income grew by $0.8 billion to $1.7 billion, with Direct-to-Consumer achieving profitability of $293 million. Disney+ and Hulu reached 178 million total subscriptions, though Disney+ subscribers decreased by 0.7 million. Sports segment operating income improved by $350 million to $247 million, with domestic ESPN advertising revenue up 15%.
The Experiences segment maintained $3.1 billion operating income despite impacts from Hurricanes Milton and Helene ($120 million) and cruise pre-opening expenses ($75 million). The company projects high-single digit adjusted EPS growth for fiscal 2025 and expects approximately $15 billion in cash from operations.
Disney (DIS) ha riportato risultati solidi per il primo trimestre dell'anno fiscale 2025, con ricavi in aumento del 5% a 24,7 miliardi di dollari. L'utile per azione diluito dell'azienda è aumentato del 35% a $1,40, mentre l'utile per azione rettificato è cresciuto del 44% a $1,76. Il reddito operativo totale del segmento è aumentato del 31% a $5,1 miliardi.
Il reddito operativo del segmento intrattenimento è cresciuto di $0,8 miliardi a $1,7 miliardi, con il Direct-to-Consumer che ha raggiunto un utile di $293 milioni. Disney+ e Hulu hanno raggiunto 178 milioni di abbonamenti totali, anche se gli abbonati a Disney+ sono diminuiti di 0,7 milioni. Il reddito operativo del segmento sport è migliorato di $350 milioni, raggiungendo $247 milioni, con le entrate pubblicitarie nazionali di ESPN in aumento del 15%.
Il segmento Esperienze ha mantenuto un reddito operativo di $3,1 miliardi nonostante gli impatti degli uragani Milton e Helene ($120 milioni) e delle spese pre-apertura delle crociere ($75 milioni). L'azienda prevede una crescita dell'utile per azione rettificato a cifra alta per l'anno fiscale 2025 e si aspetta circa $15 miliardi in contante dalle operazioni.
Disney (DIS) reportó sólidos resultados para el primer trimestre del año fiscal 2025, con ingresos aumentando un 5% a $24.7 mil millones. El EPS diluido de la compañía aumentó un 35% a $1.40, mientras que el EPS ajustado creció un 44% a $1.76. Los ingresos operativos totales del segmento aumentaron un 31% a $5.1 mil millones.
El ingreso operativo del segmento de entretenimiento creció en $0.8 mil millones a $1.7 mil millones, con Direct-to-Consumer alcanzando rentabilidad de $293 millones. Disney+ y Hulu alcanzaron un total de 178 millones de suscripciones, aunque los suscriptores de Disney+ disminuyeron en 0.7 millones. El ingreso operativo del segmento deportivo mejoró en $350 millones a $247 millones, con los ingresos publicitarios nacionales de ESPN aumentando un 15%.
El segmento de Experiencias mantuvo un ingreso operativo de $3.1 mil millones a pesar de los impactos de los huracanes Milton y Helene ($120 millones) y los gastos pre-apertura de cruceros ($75 millones). La compañía proyecta un crecimiento del EPS ajustado de un solo dígito alto para el año fiscal 2025 y espera aproximadamente $15 mil millones en efectivo de las operaciones.
디즈니 (DIS)는 2025 회계연도 1분기 실적을 발표하며 수익이 5% 증가한 247억 달러에 이르렀다고 밝혔습니다. 회사의 희석 주당순이익은 35% 증가한 $1.40로, 조정 주당순이익은 44% 증가한 $1.76로 나타났습니다. 전체 세그먼트 운영 소득은 31% 증가한 $51억 달러입니다.
엔터테인먼트 세그먼트 운영 소득은 $8억 달러 증가하여 $17억 달러에 도달했으며, Direct-to-Consumer는 $2억 9천3백만 달러의 수익성을 달성했습니다. Disney+와 Hulu는 총 1억 7천8백만 개의 구독자에 도달했지만, Disney+ 구독자는 70만 명 감소했습니다. 스포츠 세그먼트 운영 소득은 $3억 5천만 달러 증가하여 $2억 4천7백만 달러에 도달했으며, ESPN의 국내 광고 수익은 15% 증가했습니다.
경험 세그먼트는 허리케인 밀턴과 헬렌의 영향을 받았음에도 불구하고 ($1억 2천만 달러) 운영 소득 $31억 달러를 유지했으며, 크루즈 개장 전 비용이 $7천5백만 달러 발생했습니다. 회사는 2025 회계연도에 단일 수치의 조정 주당순이익 성장을 예상하고, 운영에서 약 $150억 달러의 현금을 예상하고 있습니다.
Disney (DIS) a annoncé de solides résultats pour le premier trimestre de l'exercice fiscal 2025, avec des revenus augmentant de 5% pour atteindre 24,7 milliards de dollars. Le bénéfice par action dilué de l'entreprise a augmenté de 35% pour atteindre 1,40 $, tandis que le bénéfice par action ajusté a progressé de 44% pour atteindre 1,76 $. Le revenu d'exploitation total des segments a augmenté de 31% pour atteindre 5,1 milliards de dollars.
Le revenu d'exploitation du segment divertissement a augmenté de 0,8 milliard de dollars pour atteindre 1,7 milliard de dollars, avec le Direct-to-Consumer atteignant une rentabilité de 293 millions de dollars. Disney+ et Hulu ont atteint un total de 178 millions d'abonnements, bien que le nombre d'abonnés à Disney+ ait diminué de 0,7 million. Le revenu d'exploitation du segment sportif s'est amélioré de 350 millions de dollars pour atteindre 247 millions de dollars, les revenus publicitaires d'ESPN aux États-Unis ayant augmenté de 15%.
Le segment Expériences a maintenu un revenu d'exploitation de 3,1 milliards de dollars malgré les impacts des ouragans Milton et Helene (120 millions de dollars) et les frais de pré-ouverture des croisières (75 millions de dollars). L'entreprise prévoit une croissance du bénéfice par action ajusté à un chiffre à un chiffre élevé pour l'exercice fiscal 2025 et s'attend à environ 15 milliards de dollars de liquidités provenant des opérations.
Disney (DIS) hat im ersten Quartal des Geschäftsjahres 2025 starke Ergebnisse präsentiert, mit einem Umsatzanstieg von 5% auf 24,7 Milliarden Dollar. Der verwässerte Gewinn pro Aktie stieg um 35% auf $1,40, während der bereinigte Gewinn pro Aktie um 44% auf $1,76 wuchs. Das gesamte Segmentbetriebsgewinn erhöhte sich um 31% auf $5,1 Milliarden.
Der Betriebsgewinn des Unterhaltungssegments wuchs um $0,8 Milliarden auf $1,7 Milliarden, wobei Direct-to-Consumer einen Gewinn von $293 Millionen erzielte. Disney+ und Hulu erreichten insgesamt 178 Millionen Abonnements, obwohl die Abonnenten von Disney+ um 0,7 Millionen zurückgingen. Der Betriebsgewinn des Sportsegments verbesserte sich um $350 Millionen auf $247 Millionen, während die Werbeeinnahmen von ESPN in den USA um 15% zunahmen.
Der Bereich Erlebnisse hielt einen Betriebsgewinn von $3,1 Milliarden trotz der Auswirkungen der Hurrikane Milton und Helene ($120 Millionen) sowie der Vorabkosten für Kreuzfahrten ($75 Millionen). Das Unternehmen prognostiziert ein hohes einstellige Wachstum des bereinigten Gewinns pro Aktie für das Geschäftsjahr 2025 und erwartet etwa $15 Milliarden an Bargeld aus den Betriebsabläufen.
- Revenue increased 5% to $24.7 billion
- Diluted EPS grew 35% to $1.40
- Total segment operating income up 31% to $5.1 billion
- Direct-to-Consumer achieved profitability with $293 million operating income
- Sports segment operating income improved by $350 million
- ESPN advertising revenue up 15%
- International Parks & Experiences operating income up 28%
- Disney+ subscribers decreased by 0.7 million vs Q4 2024
- Direct-to-Consumer advertising revenue declined 2%
- Domestic Parks & Experiences operating income declined 5%
- Expected $300 million equity loss from India JV for full year
Insights
Disney's Q1 FY2025 results reveal a company executing effectively on its strategic transformation. The
The breakthrough achievement of
The Sports segment's remarkable turnaround to
The guidance for high-single digit adjusted EPS growth and
Disney's Q1 results showcase a masterful balance between streaming scale and profitability. The achievement of
The Content Sales/Licensing segment's
The integration of ESPN content into Disney+ represents a strategic evolution in sports media distribution, potentially setting the stage for ESPN's direct-to-consumer future. The
Financial Results for the Quarter:
-
Revenues increased
5% for Q1 to$24.7 billion $23.5 billion -
Income before income taxes increased
27% for Q1 to$3.7 billion $2.9 billion -
Diluted earnings per share (EPS) increased
35% for Q1 to$1.40 $1.04 -
Total segment operating income(1) increased
31% for Q1 to$5.1 billion $3.9 billion 44% for Q1 to$1.76 $1.22
Key Points:
-
Entertainment: Segment operating income increased
$0.8 billion $1.7 billion -
Direct-to-Consumer operating income increased
$431 million $293 million -
Direct-to-Consumer advertising revenue declined
2% ; excluding the Disney+ Hotstar service inIndia (2), Direct-to-Consumer advertising revenue was up16% vs. Q1 fiscal 2024 - 178 million Disney+ and Hulu subscriptions, an increase of 0.9 million vs. Q4 fiscal 2024
- 125 million Disney+ subscribers, a decrease of 0.7 million vs. Q4 fiscal 2024
-
Content Sales/Licensing and Other operating income increased
$536 million $312 million
-
Direct-to-Consumer operating income increased
-
Sports: Segment operating income increased
$350 million $247 million -
Domestic ESPN advertising revenue up
15% vs. Q1 fiscal 2024
-
Domestic ESPN advertising revenue up
-
Experiences: Segment operating income of
$3.1 billion ~ impact) and pre-opening expenses ($120 million ~ impact in Q1 fiscal 2025) driven by the launch of the Disney Treasure$75 million -
Domestic Parks & Experiences operating income declined
5% , reflecting a 9 percentage-point adverse impact to year-over-year growth due to the hurricanes and cruise pre-opening expenses -
International Parks & Experiences operating income increased
28% vs. Q1 fiscal 2024
-
Domestic Parks & Experiences operating income declined
(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 20 for how we define and calculate these measures and a quantitative reconciliation thereof to the most directly comparable GAAP measures. | |
(2) |
The Disney+ Hotstar service in |
Guidance and Outlook:
-
Star
India deconsolidated in Q1(1):-
Our
India business will contribute$73 million $254 million $9 million $636 million -
Equity loss from the India JV of
$33 million $300 million
-
Our
-
Q2 Fiscal 2025:
- Entertainment Direct-to-Consumer: Modest decline in Disney+ subscribers compared to Q1
-
Sports: Segment operating income adversely impacted by approximately
$100 million $50 million -
Experiences: Disney Cruise Line pre-opening expense of approximately
$40 million
-
Fiscal Year 2025:
- High-single digit adjusted EPS(2) growth compared to fiscal 2024
-
Approximately
$15 billion -
Entertainment: Double-digit percentage segment operating income growth, with an increase in Entertainment Direct-to-Consumer operating income of approximately
$875 million -
Sports:
13% segment operating income growth -
Experiences:
6% to8% segment operating income growth -
Disney Cruise Line pre-opening expense of
~ $200 million
Message From Our CEO:
“Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years,” said Robert A. Iger, Chief Executive Officer, The Walt Disney Company. “In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024; we further improved the profitability of our Entertainment DTC streaming businesses; we took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+; and our Experiences segment demonstrated its enduring appeal as we continue investing strategically across the globe. Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth.”
(1) |
Q1 fiscal 2025 included approximately one and a half months of Star India operating results, whereas fiscal 2024 included a full year of results. After November 14, 2024, we began recognizing our share of the India JV in “Equity in the income of investees.” |
|
(2) |
Diluted EPS excluding certain items (also referred to as adjusted EPS) is a non-GAAP financial measure. The most comparable GAAP measure is diluted EPS. See the discussion on pages 17 through 20 for how we define and calculate this measure and why the Company is not providing the forward-looking quantitative reconciliation of diluted EPS excluding certain items to the most comparable GAAP measure. |
|
(3) |
Including a comparison to an adverse impact of the Disney+ Hotstar service in |
SUMMARIZED FINANCIAL RESULTS
The following table summarizes first quarter results for fiscal 2025 and 2024:
|
Quarter Ended |
|
|
||||||
($ in millions, except per share amounts) |
December 28,
|
|
December 30,
|
|
Change |
||||
Revenues |
$ |
24,690 |
|
$ |
23,549 |
|
5 |
% |
|
Income before income taxes |
$ |
3,660 |
|
$ |
2,871 |
|
27 |
% |
|
Total segment operating income(1) |
$ |
5,060 |
|
$ |
3,876 |
|
31 |
% |
|
Diluted EPS |
$ |
1.40 |
|
$ |
1.04 |
|
35 |
% |
|
Diluted EPS excluding certain items(1) |
$ |
1.76 |
|
$ |
1.22 |
|
44 |
% |
|
Cash provided by operations |
$ |
3,205 |
|
$ |
2,185 |
|
47 |
% |
|
Free cash flow(1) |
$ |
739 |
|
$ |
886 |
|
(17 |
)% |
|
(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 20 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 first quarter segment revenue and operating income for fiscal 2025 and 2024:
|
Quarter Ended |
|
|
||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
||||||
Revenues: |
|
|
|
|
|
||||||
Entertainment |
$ |
10,872 |
|
|
$ |
9,981 |
|
|
9 |
% |
|
Sports |
|
4,850 |
|
|
|
4,835 |
|
|
— |
% |
|
Experiences |
|
9,415 |
|
|
|
9,132 |
|
|
3 |
% |
|
Eliminations(1) |
|
(447 |
) |
|
|
(399 |
) |
|
(12 |
)% |
|
Total revenues |
$ |
24,690 |
|
|
$ |
23,549 |
|
|
5 |
% |
|
Segment operating income: |
|
|
|
|
|
|
|
|
|||
Entertainment |
$ |
1,703 |
|
|
$ |
874 |
|
|
95 |
% |
|
Sports |
|
247 |
|
|
|
(103 |
) |
|
nm |
||
Experiences |
|
3,110 |
|
|
|
3,105 |
|
|
— |
% |
|
Total segment operating income(2) |
$ |
5,060 |
|
|
$ |
3,876 |
|
|
31 |
% |
|
(1) |
Reflects fees paid by Hulu to ESPN and the Entertainment linear networks business for the right to air their networks on Hulu Live and fees paid by 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 20. |
DISCUSSION OF FIRST QUARTER SEGMENT RESULTS
Star
On November 14, 2024, the Company and Reliance Industries Limited (RIL) completed a transaction (the Star India Transaction) to form a joint venture (
Upon completion of the Star India Transaction, the Company began recognizing its
Entertainment
Revenue and operating income for the Entertainment segment were as follows:
|
Quarter Ended |
|
Change |
|||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
||||||
Revenues: |
|
|
|
|
|
|||||
Linear Networks |
$ |
2,617 |
|
$ |
2,803 |
|
|
(7 |
)% |
|
Direct-to-Consumer |
|
6,072 |
|
|
5,546 |
|
|
9 |
% |
|
Content Sales/Licensing and Other |
|
2,183 |
|
|
1,632 |
|
|
34 |
% |
|
|
$ |
10,872 |
|
$ |
9,981 |
|
|
9 |
% |
|
Operating income (loss): |
|
|
|
|
|
|||||
Linear Networks |
$ |
1,098 |
|
$ |
1,236 |
|
|
(11 |
)% |
|
Direct-to-Consumer |
|
293 |
|
|
(138 |
) |
|
nm |
||
Content Sales/Licensing and Other |
|
312 |
|
|
(224 |
) |
|
nm |
||
|
$ |
1,703 |
|
$ |
874 |
|
|
95 |
% |
|
The increase in Entertainment operating income in the current quarter compared to the prior-year quarter was due to improved results at Content Sales/Licensing and Other and Direct-to-Consumer, partially offset by a decrease at Linear Networks.
Linear Networks
Linear Networks revenues and operating income were as follows:
|
Quarter Ended |
|
Change |
||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
|||||
Revenue |
|
|
|
|
|
||||
Domestic |
$ |
2,206 |
|
$ |
2,210 |
|
— |
% |
|
International |
|
411 |
|
|
593 |
|
(31 |
)% |
|
|
$ |
2,617 |
|
$ |
2,803 |
|
(7 |
)% |
|
Operating income |
|
|
|
|
|
||||
Domestic |
$ |
837 |
|
$ |
838 |
|
— |
% |
|
International |
|
138 |
|
|
225 |
|
(39 |
)% |
|
Equity in the income of investees |
|
123 |
|
|
173 |
|
(29 |
)% |
|
|
$ |
1,098 |
|
$ |
1,236 |
|
(11 |
)% |
|
Domestic
Domestic operating income in the current quarter was comparable to the prior-year quarter due to:
- An increase in programming and production costs primarily due to a higher average cost mix of programming at the ABC Network, reflecting the impact of the 2023 guild strikes on the prior- year quarter
- A decrease in affiliate revenue attributable to fewer subscribers, partially offset by higher effective rates
- Lower technology costs
- Higher advertising revenue reflecting an increase in rates, due to more political advertising at the owned television stations, partially offset by fewer impressions due to lower average viewership at our networks.
International
The decrease in international operating income was primarily due to the Star India Transaction.
Equity in the Income of Investees
Income from equity investees decreased due to lower income from A+E Television Networks (A+E) attributable to decreases in advertising and affiliate revenue and the comparison to a gain on the sale of an investment in the prior-year quarter.
Direct-to-Consumer
Direct-to-Consumer revenues and operating income (loss) were as follows:
|
Quarter Ended |
|
Change |
|||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
||||||
Revenue |
$ |
6,072 |
|
$ |
5,546 |
|
|
9 |
% |
|
Operating income (loss) |
$ |
293 |
|
$ |
(138 |
) |
|
nm |
||
The improvement in operating results 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
- Higher technology and distribution costs
-
An increase in programming and production costs reflecting:
- Higher subscriber-based fees for programming the Hulu Live TV service due to rate increases
- Lower costs for sports programming on Disney+, reflecting the comparison to the International Cricket Council (ICC) Cricket World Cup, which was carried on Disney+ Hotstar in the prior-year quarter. There were no significant cricket events in the current quarter prior to the Star India Transaction.
- Lower advertising revenue as the comparison to ICC Cricket World Cup programming in the prior-year quarter on Disney+ Hotstar was largely offset by higher advertising revenue at Disney+ Core and Hulu. The increase in advertising revenue at Disney+ Core and Hulu was due to more impressions, partially offset by lower rates.
Key Metrics - First Quarter of Fiscal 2025 Comparison to Fourth Quarter of Fiscal 2024
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) |
December 28,
|
|
September 28,
|
|
Change |
||
Disney+ |
|
|
|
|
|
||
Domestic ( |
56.8 |
|
56.0 |
|
1 |
% |
|
International(2) |
67.8 |
|
69.3 |
|
(2 |
)% |
|
Total Disney+(2)(3) |
124.6 |
|
125.3 |
|
(1 |
)% |
|
|
|
|
|
|
|
||
Hulu |
|
|
|
|
|
||
SVOD Only |
49.0 |
|
47.4 |
|
3 |
% |
|
Live TV + SVOD |
4.6 |
|
4.6 |
|
— |
% |
|
Total Hulu(3) |
53.6 |
|
52.0 |
|
3 |
% |
|
Average Monthly Revenue Per Paid Subscriber for the quarter ended:
|
December 28,
|
|
September 28,
|
|
Change |
||||
Disney+ |
|
|
|
|
|
||||
Domestic ( |
$ |
7.99 |
|
$ |
7.70 |
|
4 |
% |
|
International(2) |
|
7.19 |
|
|
6.78 |
|
6 |
% |
|
Disney+(2) |
|
7.55 |
|
|
7.20 |
|
5 |
% |
|
|
|
|
|
|
|
||||
Hulu |
|
|
|
|
|
||||
SVOD Only |
|
12.52 |
|
|
12.54 |
|
— |
% |
|
Live TV + SVOD |
|
99.22 |
|
|
95.82 |
|
4 |
% |
|
(1) |
See discussion on page 16—DTC Product Descriptions and Key Definitions |
|
(2) |
The sequential prior quarter Paid Subscribers and Average Monthly Revenue per Paid Subscriber have been adjusted to include Disney+ subscribers in |
|
(3) |
Total may not equal the sum of the column due to rounding |
Domestic Disney+ average monthly revenue per paid subscriber increased from
International Disney+ average monthly revenue per paid subscriber increased from
Hulu SVOD Only average monthly revenue per paid subscriber was comparable to the prior sequential quarter as lower advertising revenue was offset by increases in pricing and a higher mix of subscribers to higher priced multi-product offerings.
Hulu Live TV + SVOD average monthly revenue per paid subscriber increased from
Content Sales/Licensing and Other
Content Sales/Licensing and Other revenues and operating income (loss) were as follows:
|
Quarter Ended |
|
Change |
|||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
||||||
Revenue |
$ |
2,183 |
|
$ |
1,632 |
|
|
34 |
% |
|
Operating income (loss) |
$ |
312 |
|
$ |
(224 |
) |
|
nm |
||
The improvement in operating results was due to higher theatrical distribution results reflecting the strong performance of Moana 2 in the current quarter. The current quarter also included Mufasa: The Lion King and the prior-year quarter included The Marvels and Wish.
Sports
Sports revenues and operating income (loss) were as follows:
|
Quarter Ended |
|
Change |
||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
|||||||
Revenue |
|
|
|
|
|
||||||
ESPN |
|
|
|
|
|
||||||
Domestic |
$ |
4,422 |
|
|
$ |
4,073 |
|
|
9 |
% |
|
International |
|
389 |
|
|
|
363 |
|
|
7 |
% |
|
|
|
4,811 |
|
|
|
4,436 |
|
|
8 |
% |
|
Star |
|
39 |
|
|
|
399 |
|
|
(90 |
)% |
|
|
$ |
4,850 |
|
|
$ |
4,835 |
|
|
— |
% |
|
Operating income (loss) |
|
|
|
|
|
||||||
ESPN |
|
|
|
|
|
||||||
Domestic |
$ |
231 |
|
|
$ |
255 |
|
|
(9 |
)% |
|
International |
|
(3 |
) |
|
|
(56 |
) |
|
95 |
% |
|
|
|
228 |
|
|
|
199 |
|
|
15 |
% |
|
Star |
|
9 |
|
|
|
(315 |
) |
|
nm |
||
Equity in the income of investees |
|
10 |
|
|
|
13 |
|
|
(23 |
)% |
|
|
$ |
247 |
|
|
$ |
(103 |
) |
|
nm |
||
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 expanded college football programming rights including one additional College Football Playoff (CFP) game
- The CFP format was revised starting with the 2024-2025 season, which added four first round games in the current quarter, two of which aired on our networks and two of which were sub-licensed.
- In the prior-year quarter, we aired three host games, which under the new format are now quarterfinal and semifinal games that aired in the second quarter of the current fiscal year.
- An increase in advertising revenue primarily due to higher rates
- Fees from sub-licensing CFP programming rights
- Affiliate revenue was comparable to the prior-year quarter as effective rate increases were offset by fewer subscribers
International ESPN
The decrease in operating loss at international ESPN in the current quarter compared to the prior-year quarter was driven by:
- Higher fees received from the Entertainment segment to program sports content on Disney+
- An increase in programming and production costs attributable to higher soccer rights costs reflecting contractual rate increases
- Lower affiliate revenue due to fewer subscribers
Star
The improvement in Star India’s operating results reflected the comparison to the ICC Cricket World Cup in the prior-year quarter, as there were no significant cricket events aired in the current quarter prior to the Star India Transaction.
Key Metrics - First Quarter of Fiscal 2025 Comparison to Fourth Quarter of Fiscal 2024
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.
|
December 28,
|
|
September 28,
|
|
Change |
||||
Paid subscribers at: (in millions) |
|
24.9 |
|
|
25.6 |
|
(3 |
)% |
|
Average Monthly Revenue Per Paid Subscriber for the quarter ended: |
$ |
6.36 |
|
$ |
5.94 |
|
7 |
% |
|
(1) |
See discussion on page 16—DTC Product Descriptions and Key Definitions |
ESPN+ average monthly revenue per paid subscriber increased from
Experiences
Experiences revenues and operating income were as follows:
|
Quarter Ended |
|
Change |
||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
|||||
Revenue |
|
|
|
|
|
||||
Parks & Experiences |
|
|
|
|
|
||||
Domestic |
$ |
6,432 |
|
$ |
6,297 |
|
2 |
% |
|
International |
|
1,646 |
|
|
1,476 |
|
12 |
% |
|
Consumer Products |
|
1,337 |
|
|
1,359 |
|
(2 |
)% |
|
|
$ |
9,415 |
|
$ |
9,132 |
|
3 |
% |
|
Operating income |
|
|
|
|
|
||||
Parks & Experiences |
|
|
|
|
|
||||
Domestic |
$ |
1,982 |
|
$ |
2,077 |
|
(5 |
)% |
|
International |
|
420 |
|
|
328 |
|
28 |
% |
|
Consumer Products |
|
708 |
|
|
700 |
|
1 |
% |
|
|
$ |
3,110 |
|
$ |
3,105 |
|
— |
% |
|
Domestic Parks and Experiences
Domestic parks and experiences’ operating results for the current quarter were unfavorably impacted by Hurricane Milton and, to a lesser extent, Hurricane Helene. As a result of Hurricane Milton, Walt Disney World Resort was closed for a day and we canceled a cruise itinerary.
Operating results at our domestic parks and experiences decreased compared to the prior-year quarter due to:
- Higher costs primarily due to the fleet expansion at Disney Cruise Line and inflation
- Lower volumes attributable to declines in attendance, reflecting the impact of the hurricanes
- Increased guest spending
International Parks and Experiences
The increase in operating income at our international parks and experiences was primarily attributable to:
- Growth in guest spending
- Higher volumes primarily attributable to an increase in attendance
- An increase in costs primarily due to new guest offerings
OTHER FINANCIAL INFORMATION
Corporate and Unallocated Shared Expenses
Corporate and unallocated shared expenses increased
Restructuring and Impairment Charges
In the current quarter, the Company recorded a
Interest Expense, net
Interest expense, net was as follows:
|
Quarter Ended |
|
|
||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
||||||
Interest expense |
$ |
(487 |
) |
|
$ |
(528 |
) |
|
8 |
% |
|
Interest income, investment income and other |
|
120 |
|
|
|
282 |
|
|
(57 |
)% |
|
Interest expense, net |
$ |
(367 |
) |
|
$ |
(246 |
) |
|
(49 |
)% |
|
The decrease in interest expense was primarily 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 reflected the impact of lower cash and cash equivalent balances, an unfavorable comparison related to pension and postretirement benefit costs, other than service cost, and investment losses in the current quarter compared to investment gains in the prior-year quarter.
Equity in the Income of Investees
Equity in the income of investees was as follows:
|
Quarter Ended |
|
|
||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
||||||
Amounts included in segment results: |
|
|
|
|
|
||||||
Entertainment |
$ |
118 |
|
|
$ |
171 |
|
|
(31 |
)% |
|
Sports |
|
10 |
|
|
|
13 |
|
|
(23 |
)% |
|
Equity in the loss of |
|
(33 |
) |
|
|
— |
|
|
nm |
||
Amortization of TFCF Corporation (TFCF) intangible assets related to an equity investee |
|
(3 |
) |
|
|
(3 |
) |
|
— |
% |
|
Equity in the income of investees |
$ |
92 |
|
|
$ |
181 |
|
|
(49 |
)% |
|
Income from equity investees decreased
Income Taxes
The effective income tax rate was as follows:
|
Quarter Ended |
|||||||
|
December 28,
|
|
December 30,
|
|||||
Income before income taxes |
$ |
3,660 |
|
|
$ |
2,871 |
|
|
Income tax expense |
|
1,016 |
|
|
|
720 |
|
|
Effective income tax rate |
|
27.8 |
% |
|
|
25.1 |
% |
|
The increase in the effective income tax rate in the current quarter compared to the prior-year quarter was due to a non-cash tax charge in connection with the Star India Transaction. This increase was partially offset by the comparison to an unfavorable effect of employee share-based awards in the prior-year quarter, the impact of adjustments related to prior years and a lower foreign effective tax rate. Adjustments related to prior years were favorable in the current quarter and unfavorable in the prior-year quarter.
Noncontrolling Interests
Net income attributable to noncontrolling interests was as follows:
|
Quarter Ended |
|
|
||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
||||||
Net income attributable to noncontrolling interests |
$ |
(90 |
) |
|
$ |
(240 |
) |
|
63 |
% |
|
The decrease in net income attributable to noncontrolling interests was due to the comparison to accretion of NBC Universal’s interest in Hulu in the prior-year quarter.
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:
|
Quarter Ended |
|
|
|||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
|||||||
Cash provided by operations |
$ |
3,205 |
|
|
$ |
2,185 |
|
|
$ |
1,020 |
|
|
Investments in parks, resorts and other property |
|
(2,466 |
) |
|
|
(1,299 |
) |
|
|
(1,167 |
) |
|
Free cash flow(1) |
$ |
739 |
|
|
$ |
886 |
|
|
$ |
(147 |
) |
|
(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 20. |
Cash provided by operations increased
-
Lower tax payments in the current quarter compared to the prior-year quarter due to payment of fiscal 2023 U.S. federal and
California state income taxes in the prior-year quarter that had been deferred pursuant to relief provided by the Internal Revenue Service andCalifornia Board of Equalization as a result of the 2023 winter storms inCalifornia - Higher operating income at Entertainment
- Higher film and television production spending and the timing of payments for sports rights
Capital Expenditures
Investments in parks, resorts and other property were as follows:
|
Quarter Ended |
|||||||
($ in millions) |
December 28,
|
|
December 30,
|
|||||
Entertainment |
$ |
(268 |
) |
|
$ |
(309 |
) |
|
Sports |
|
(1 |
) |
|
|
— |
|
|
Experiences |
|
|
|
|||||
Domestic |
|
(1,786 |
) |
|
|
(571 |
) |
|
International |
|
(293 |
) |
|
|
(244 |
) |
|
Total Experiences |
|
(2,079 |
) |
|
|
(815 |
) |
|
Corporate |
|
(118 |
) |
|
|
(175 |
) |
|
Total investments in parks, resorts and other property |
$ |
(2,466 |
) |
|
$ |
(1,299 |
) |
|
Capital expenditures increased to
Depreciation Expense
Depreciation expense was as follows:
|
Quarter Ended |
|||||
($ in millions) |
December 28,
|
|
December 30,
|
|||
Entertainment |
$ |
165 |
|
$ |
163 |
|
Sports |
|
10 |
|
|
11 |
|
Experiences |
|
|
|
|||
Domestic |
|
461 |
|
|
424 |
|
International |
|
191 |
|
|
171 |
|
Total Experiences |
|
652 |
|
|
595 |
|
Corporate |
|
82 |
|
|
54 |
|
Total depreciation expense |
$ |
909 |
|
$ |
823 |
|
THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited; $ in millions, except per share data) |
||||||||
|
Quarter Ended |
|||||||
|
December 28,
|
|
December 30,
|
|||||
Revenues |
$ |
24,690 |
|
|
$ |
23,549 |
|
|
Costs and expenses |
|
(20,612 |
) |
|
|
(20,613 |
) |
|
Restructuring and impairment charges |
|
(143 |
) |
|
|
— |
|
|
Interest expense, net |
|
(367 |
) |
|
|
(246 |
) |
|
Equity in the income of investees |
|
92 |
|
|
|
181 |
|
|
Income before income taxes |
|
3,660 |
|
|
|
2,871 |
|
|
Income taxes |
|
(1,016 |
) |
|
|
(720 |
) |
|
Net income |
|
2,644 |
|
|
|
2,151 |
|
|
Net income attributable to noncontrolling interests |
|
(90 |
) |
|
|
(240 |
) |
|
Net income attributable to The Walt Disney Company (Disney) |
$ |
2,554 |
|
|
$ |
1,911 |
|
|
|
|
|
|
|||||
Earnings per share attributable to Disney: |
|
|
|
|||||
Diluted |
$ |
1.40 |
|
|
$ |
1.04 |
|
|
Basic |
$ |
1.41 |
|
|
$ |
1.04 |
|
|
|
|
|
|
|||||
Weighted average number of common and common equivalent shares outstanding: |
|
|
|
|||||
Diluted |
|
1,818 |
|
|
|
1,835 |
|
|
Basic |
|
1,812 |
|
|
|
1,832 |
|
|
THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited; $ in millions, except per share data) |
||||||||
|
December 28,
|
|
September 28,
|
|||||
ASSETS |
|
|
|
|||||
Current assets |
|
|
|
|||||
Cash and cash equivalents |
$ |
5,486 |
|
|
$ |
6,002 |
|
|
Receivables, net |
|
13,767 |
|
|
|
12,729 |
|
|
Inventories |
|
2,018 |
|
|
|
2,022 |
|
|
Content advances |
|
1,157 |
|
|
|
2,097 |
|
|
Other current assets |
|
1,239 |
|
|
|
2,391 |
|
|
Total current assets |
|
23,667 |
|
|
|
25,241 |
|
|
Produced and licensed content costs |
|
32,505 |
|
|
|
32,312 |
|
|
Investments |
|
8,902 |
|
|
|
4,459 |
|
|
Parks, resorts and other property |
|
|
|
|||||
Attractions, buildings and equipment |
|
78,328 |
|
|
|
76,674 |
|
|
Accumulated depreciation |
|
(45,898 |
) |
|
|
(45,506 |
) |
|
|
|
32,430 |
|
|
|
31,168 |
|
|
Projects in progress |
|
4,581 |
|
|
|
4,728 |
|
|
Land |
|
1,129 |
|
|
|
1,145 |
|
|
|
|
38,140 |
|
|
|
37,041 |
|
|
Intangible assets, net |
|
10,372 |
|
|
|
10,739 |
|
|
Goodwill |
|
73,312 |
|
|
|
73,326 |
|
|
Other assets |
|
10,148 |
|
|
|
13,101 |
|
|
Total assets |
$ |
197,046 |
|
|
$ |
196,219 |
|
|
LIABILITIES AND EQUITY |
|
|
|
|||||
Current liabilities |
|
|
|
|||||
Accounts payable and other accrued liabilities |
$ |
21,635 |
|
|
$ |
21,070 |
|
|
Current portion of borrowings |
|
6,620 |
|
|
|
6,845 |
|
|
Deferred revenue and other |
|
6,591 |
|
|
|
6,684 |
|
|
Total current liabilities |
|
34,846 |
|
|
|
34,599 |
|
|
Borrowings |
|
38,688 |
|
|
|
38,970 |
|
|
Deferred income taxes |
|
6,336 |
|
|
|
6,277 |
|
|
Other long-term liabilities |
|
10,437 |
|
|
|
10,851 |
|
|
Commitments and contingencies |
|
|
|
|||||
Equity |
|
|
|
|||||
Preferred stock |
|
— |
|
|
|
— |
|
|
Common stock, |
|
58,868 |
|
|
|
58,592 |
|
|
Retained earnings |
|
50,468 |
|
|
|
49,722 |
|
|
Accumulated other comprehensive loss |
|
(2,688 |
) |
|
|
(3,699 |
) |
|
Treasury stock, at cost, 54 million shares at December 28, 2024 and 47 million shares at September 28, 2024 |
|
(4,715 |
) |
|
|
(3,919 |
) |
|
Total Disney Shareholders’ equity |
|
101,933 |
|
|
|
100,696 |
|
|
Noncontrolling interests |
|
4,806 |
|
|
|
4,826 |
|
|
Total equity |
|
106,739 |
|
|
|
105,522 |
|
|
Total liabilities and equity |
$ |
197,046 |
|
|
$ |
196,219 |
|
|
THE WALT DISNEY COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited; $ in millions) |
||||||||
|
Quarter Ended |
|||||||
|
December 28,
|
|
December 30,
|
|||||
OPERATING ACTIVITIES |
|
|
|
|||||
Net income |
$ |
2,644 |
|
|
$ |
2,151 |
|
|
Depreciation and amortization |
|
1,276 |
|
|
|
1,243 |
|
|
Deferred income taxes |
|
25 |
|
|
|
(51 |
) |
|
Equity in the income of investees |
|
(92 |
) |
|
|
(181 |
) |
|
Cash distributions received from equity investees |
|
33 |
|
|
|
153 |
|
|
Net change in produced and licensed content costs and advances |
|
1,141 |
|
|
|
2,642 |
|
|
Equity-based compensation |
|
317 |
|
|
|
308 |
|
|
Other, net |
|
206 |
|
|
|
(64 |
) |
|
Changes in operating assets and liabilities |
|
|
|
|||||
Receivables |
|
(1,277 |
) |
|
|
(1,554 |
) |
|
Inventories |
|
4 |
|
|
|
8 |
|
|
Other assets |
|
(116 |
) |
|
|
30 |
|
|
Accounts payable and other liabilities |
|
(1,533 |
) |
|
|
(1,396 |
) |
|
Income taxes |
|
577 |
|
|
|
(1,104 |
) |
|
Cash provided by operations |
|
3,205 |
|
|
|
2,185 |
|
|
|
|
|
|
|||||
INVESTING ACTIVITIES |
|
|
|
|||||
Investments in parks, resorts and other property |
|
(2,466 |
) |
|
|
(1,299 |
) |
|
Other, net |
|
(109 |
) |
|
|
53 |
|
|
Cash used in investing activities |
|
(2,575 |
) |
|
|
(1,246 |
) |
|
|
|
|
|
|||||
FINANCING ACTIVITIES |
|
|
|
|||||
Commercial paper borrowings (payments), net |
|
(169 |
) |
|
|
1,046 |
|
|
Borrowings |
|
1,057 |
|
|
|
— |
|
|
Reduction of borrowings |
|
(951 |
) |
|
|
(309 |
) |
|
Repurchases of common stock |
|
(794 |
) |
|
|
— |
|
|
Acquisition of redeemable noncontrolling interests |
|
— |
|
|
|
(8,610 |
) |
|
Other, net |
|
(140 |
) |
|
|
(133 |
) |
|
Cash used in financing activities |
|
(997 |
) |
|
|
(8,006 |
) |
|
|
|
|
|
|||||
Impact of exchange rates on cash, cash equivalents and restricted cash |
|
(153 |
) |
|
|
79 |
|
|
|
|
|
|
|||||
Change in cash, cash equivalents and restricted cash |
|
(520 |
) |
|
|
(6,988 |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
6,102 |
|
|
|
14,235 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
5,582 |
|
|
$ |
7,247 |
|
|
DTC PRODUCT DESCRIPTIONS AND KEY DEFINITIONS
Product offerings
In the
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
International Disney+
International Disney+ includes the Disney+ service outside the
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 first 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 December 28, 2024 |
|
|
|
|
|
|
|
|
|
|||||||
As reported |
$ |
3,660 |
|
$ |
(1,016 |
) |
|
$ |
2,644 |
|
$ |
1.40 |
|
35 |
% |
|
Exclude: |
|
|
|
|
|
|
|
|
|
|||||||
Restructuring and impairment charges(4) |
|
143 |
|
|
213 |
|
|
|
356 |
|
|
0.20 |
|
|
||
Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs(5) |
|
397 |
|
|
(93 |
) |
|
|
304 |
|
|
0.16 |
|
|
||
Excluding certain items |
$ |
4,200 |
|
$ |
(896 |
) |
|
$ |
3,304 |
|
$ |
1.76 |
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Quarter Ended December 30, 2023 |
|
|
|
|
|
|
|
|
|
|||||||
As reported |
$ |
2,871 |
|
$ |
(720 |
) |
|
$ |
2,151 |
|
$ |
1.04 |
|
|
||
Exclude: |
|
|
|
|
|
|
|
|
|
|||||||
Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs(5) |
|
451 |
|
|
(106 |
) |
|
|
345 |
|
|
0.18 |
|
|
||
Excluding certain items |
$ |
3,322 |
|
$ |
(826 |
) |
|
$ |
2,496 |
|
$ |
1.22 |
|
|
||
(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) |
Amounts relate to the Star India Transaction. |
|
(5) |
For the current quarter, intangible asset amortization was |
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 |
|
|
||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
||||
Income before income taxes |
$ |
3,660 |
|
$ |
2,871 |
|
27 |
% |
|
Add (subtract): |
|
|
|
|
|
||||
Corporate and unallocated shared expenses |
|
460 |
|
|
308 |
|
(49 |
)% |
|
Equity in the loss of |
|
33 |
|
|
— |
|
nm |
||
Restructuring and impairment charges |
|
143 |
|
|
— |
|
nm |
||
Interest expense, net |
|
367 |
|
|
246 |
|
(49 |
)% |
|
Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs |
|
397 |
|
|
451 |
|
12 |
% |
|
Total segment operating income |
$ |
5,060 |
|
$ |
3,876 |
|
31 |
% |
|
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 |
|||||||
($ in millions) |
December 28,
|
|
December 30,
|
|||||
Cash provided by operations |
$ |
3,205 |
|
|
$ |
2,185 |
|
|
Cash used in investing activities |
|
(2,575 |
) |
|
|
(1,246 |
) |
|
Cash used in financing activities |
|
(997 |
) |
|
|
(8,006 |
) |
|
Impact of exchange rates on cash, cash equivalents and restricted cash |
|
(153 |
) |
|
|
79 |
|
|
Change in cash, cash equivalents and restricted cash |
|
(520 |
) |
|
|
(6,988 |
) |
|
Cash, cash equivalents and restricted cash, beginning of period |
|
6,102 |
|
|
|
14,235 |
|
|
Cash, cash equivalents and restricted cash, end of period |
$ |
5,582 |
|
|
$ |
7,247 |
|
|
The following table reconciles the Company’s consolidated cash provided by operations to free cash flow:
|
Quarter Ended |
|
|
|||||||||
($ in millions) |
December 28,
|
|
December 30,
|
|
Change |
|||||||
Cash provided by operations |
$ |
3,205 |
|
|
$ |
2,185 |
|
|
$ |
1,020 |
|
|
Investments in parks, resorts and other property |
|
(2,466 |
) |
|
|
(1,299 |
) |
|
|
(1,167 |
) |
|
Free cash flow |
$ |
739 |
|
|
$ |
886 |
|
|
$ |
(147 |
) |
|
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; value of our intellectual property, content offerings, businesses and assets; business and other plans; strategic priorities and initiatives; consumer sentiment, behavior or demand 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, 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, February 5, 2025, at 8:30 AM EST/5:30 AM PST 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/20250205352004/en/
David Jefferson
Corporate Communications
818-560-4832
Carlos Gomez
Investor Relations
818-560-1933
Source: The Walt Disney Company
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