Disney continued to make progress in streaming, with Disney+ and Hulu growing their combined profit 39% to $352 million and revenue 8% to $6.25 billion in its fiscal fourth quarter.
The growth in streaming was fueled by price increases, the addition of 12.4 million subscribers across the two services and the absence of Star India, offset by higher programming, production, marketing, technology and distribution costs.
But the company’s overall operating profit fell 5% to $3.48 billion, weighed down by a 21% decline at its linear entertainment networks, a loss in its content, sales & licensing unit, and higher marketing, programming and production costs at ESPN.
Revenue also came in flat at $22.5 billion as growth in sports and experiences was weighed down by a 16% decline at its linear entertainment networks and lower theatrical distribution results, reflecting the releases of “The Fantastic Four: First Steps,” “The Roses” and “Freakier Friday” and the carry-over performance of the live-action “Lilo & Stitch.” The prior-year quarter included the release of “Deadpool & Wolverine” and the carry-over performance of “Inside Out 2.”
Here are the quarter’s results:
Net income: $1.3 billion, compared to $460 million a year ago.
Earnings Per Share: 73 cents per share. Excluding certain items, EPS came in at $1.11, compared to $1.02 per share expected by analysts surveyed by Yahoo Finance.
Revenue: $22.5 billion, flat year over year, compared to $22.78 billion expected by analysts surveyed by Yahoo Finance.
Streaming subscribers: Added 12.4 million subscribers across Disney+ and Hulu for a total of 195.7 million. Disney+ added 3.8 million subscribers for a total of 131.6 million, while Hulu added 8.6 million for a total of 64.1 million.
The company no longer breaks out subscriber or average revenue per user figures for ESPN+ and did not break out figures for its new ESPN streamer. It will stop reporting the metrics for Disney+ and Hulu starting in the first quarter of 2026.
A unified standalone app combining Disney+ and Hulu is also set to launch in 2026. As part of this change, Hulu has replaced the Star brand in international markets and Disney+ has rolled out new homepage updates, including better personalization and improved recommendations.
Looking ahead, Disney expects double digit earnings per share growth in fiscal year 2026 and 2027. It also plans to invest $24 billion in entertainment and sports content and expects $19 billion in cash provided by operations and $9 billion in capital expenditures in fiscal 2026.
Additionally, it is doubling its share repurchase target to $7 billion.The board has declared a dividend of $1.50 per share, payable in two installments on Jan. 15 and July 22, 2026.
Disney Entertainment
Disney’s entertainment segment, which includes Disney+, Hulu and the company’s entertainment linear networks, saw revenue fall 6% to $10.2 billion, while operating profit tumbled 35% to $691 million due to a loss in its content, sales & licensing unit and a 21% decline at its linear networks.
Disney+ reported a total of 59.3 million domestic subscribers and 72.4 million international subscribers, marking increases of 3% and 4% from the previous quarter, respectively. Average revenue per user came in flat at $8.09 domestically as higher advertising revenue was offset by the impact of subscriber mix shifts, while international ARPU grew 4% to $8, due to a favorable impact from foreign exchange rates and subscriber mix shifts.
Hulu SVOD only subscribers grew 17% to 59.7 million, while Hulu + Live TV subscribers grew 2% to 4.4 million. Hulu SVOD only ARPU fell to $12.20 due to the impact of subscriber mix shifts, while Hulu + Live TV ARPU fell to $100.02 due to lower advertising revenue.
The company recently completed the merger of its Hulu + Live TV business with Fubo. Reaching nearly 6 million subscribers in North America, Disney now holds approximately 70% interest in the newly combined company, while Fubo shareholders retain a 30% interest.
Disney’s linear entertainment networks saw revenue drop 16% to $2.06 billion, while operating profit plunged 21% to $391 million.
The segment saw revenue dip 7% to $1.86 billion and profit fall 5% to $329 million domestically, due to lower affiliate revenue from fewer subscribers, declines in average viewership and lower ad revenue from lower political advertising and the comparison to the Emmys in the prior-year period. The lower affiliate revenue was offset by higher rates and lower programming and production costs for non-scripted programming, offset by higher costs for scripted programming, including more original content.
Meanwhile, revenue fell 56% to $202 million and the segment swung to an operating loss of $33 million internationally due to the $8.5 billion Star India transaction with Reliance Industries.
The content sales, licensing and other unit also swung to a loss of $52 million, compared to a profit of $316 million a year ago, while revenue fell 26% to $1.9 billion. The results reflected the disappointing performance of “The Fantastic Four: First Steps” and “The Roses,” as well as difficult comparisons to last year’s smash hit “Deadpool & Wolverine” and carryover of “Inside Out 2.”
In the first quarter of 2026, Disney is expecting a streaming profit of $375 million, adverse impacts of $400 million due to theatrical slate comparisons and higher costs, including marketing for “Avatar: Fire and Ash,” and $73 million from Star India, and lower political ad revenue of $140 million. For full year 2026, Disney expects double-digit entertainment profit growth weighed to the second half of the year and a streaming operating margin of 10%.
Disney Sports
Disney’s sports segment, which includes the ESPN linear network, ESPN+ and its new standalone ESPN streaming service, saw revenue climb 2% to $3.98 billion, while profits fell 2% to $911 million.
ESPN saw domestic revenue grow 2% to $3.58 billion and profit fall 3% to $908 million. Impacting the results were higher marketing costs due to the launch of ESPN’s standalone streamer, higher programming and production costs from rate increases and new sports rights, ad revenue growth due to higher impressions and rates, and higher subscription and affiliate revenue from higher rates and the comparison to the temporary suspension of carriage with an affiliate in the prior year period, offset by fewer subscribers.
International ESPN grew revenue 10% to $401 million and narrowed its losses 75% to $10 million. The results were attributable to higher affiliate revenue due to a rate increase offset by fewer subscribers.
ESPN+, which is still marketed and sold in part due to contractual rights commitments with several leagues both domestically and internationally, no longer reports quarterly subscriber and average revenue per user metrics. The network’s content is also available through a tile in Disney+.
ESPN has agreed to acquire the NFL Network, the linear RedZone channel and NFL Fantasy, subject to regulatory approval, in exchange for the league taking a 10% stake. Disney currently owns 80% of ESPN, while Hearst owns the remaining 20%. It also struck a new sports betting partnership with DraftKings and is dropping its previous partner PENN Entertainment.
For full year 2026, Disney expects low-single digit sports profit growth weighted to the fourth quarter due to the timing of rights expenses, which will hurt the second and third quarters.
Disney Experiences
Disney’s experiences segment, which includes its theme parks, hotels, Disney Cruise Line and consumer products, saw revenue rise 6% to $8.8 billion and profits jump 13% to $1.9 billion.
Domestic revenue increased 6% to $5.86 billion and profits climb 9% to $920 million due to growth at Disney Cruise Line offset by higher fleet expansion costs from the launch of the Disney Treasure. International revenue jumped 10% to $1.74 billion and profits surged 25% to $375 million, due to volume, attendance and guest spending growth at Disneyland Paris, offset by higher costs from new guest offerings. Consumer products revenue grew revenue 3% to $1.17 billion and profits 14% to $583 million due to higher licensing revenue.
In the first quarter of fiscal 2026, Disney expects to incur $90 million in pre-opening expenses at Disney Cruise Line, driven by the Disney Destiny and Adventure ships launching on Nov. 20 and in March, respectively, and $60 million in dry dock expenses. For the full year, it expects high-single digit growth in profit weighed to the second half of the year, $160 million in pre-opening expenses driven by the Disney Adventure and Destiny ships and $120 million in dry dock expenses. Five additional cruise ships are scheduled for launch beyond fiscal 2026.
Disney will open World of Frozen at Disneyland Paris this spring and has expansion projects underway at all of its theme parks across the globe. It also has a new theme park planned for Abu Dhabi, which will expand its global reach.
