Animated blockbuster “Moana 2” put wind into Disney‘s sales for the last three months of 2024. The sequel’s strong showing at the box office, along with another profitable quarter for Disney+ and Hulu, helped the Mouse House beat Wall Street forecasts for revenue and earnings.
Disney’s entertainment streaming business, comprising Disney+ and Hulu, delivered its second straight profitable quarter with operating income of $293 million on revenue of $6.07 billion, up 9%. The flagship Disney+ service lost a net 700,000 customers worldwide (not as bad as analysts anticipated) while Hulu gained 1.6 million (better than expected) coming after price increases went into effect in October.
Overall, Disney reported revenue of $24.69 billion, up 5% year over year, and 31% growth in total segment operating income to $5.1 billion for its first fiscal quarter of 2025 (the three months ended Dec. 28, 2024). The media giant reported net income of $2.55 billion, up 34%, translating to adjusted earnings per share of $1.76, up 44% from a year earlier. Analysts had projected revenue of $24.55 billion and adjusted EPS of $1.43.
“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,” Disney CEO Bob Iger said in prepared remarks. “Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth.”
For full-year fiscal year 2025, Disney reiterated that it expects to deliver high-single digit adjusted EPS growth, along with roughly $15 billion in cash provided by operations. It’s still forecasting the entertainment streaming unit (i.e. Disney+ and Hulu) to turn in about $1 billion of operating income for the year ending September 2025.
A bright spot in Disney’s entertainment division for the year-end 2024 quarter: Content sales and licensing revenue jumped 34% to $2.2 billion and operating income came in at $312 million (versus a loss of $224 million a year ago). Disney said that was driven by the performance of “Moana 2,” which to date has topped $1 billion globally at the box office. The original 2016 “Moana” has been streamed more than 1 billion hours on Disney+ to date; last year, it was the most-streamed film in the U.S. for the second year in a row, per Nielsen.
“The improvement in operating results was due to higher theatrical distribution results reflecting the strong performance of ‘Moana 2’ in the current quarter,” Disney said in announcing earnings. “The current quarter also included ‘Mufasa: The Lion King’ and the prior-year quarter included ‘The Marvels’ and ‘Wish.’”
Iger touted the quarter’s “outstanding box-office performance from our studios,” which he noted produced the top three grossing movies of 2024 — “Inside Out 2,” “Deadpool & Wolverine” and “Moana 2.” In addition to improving the profitability in its entertainment streaming business, Iger said, “we took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+.”
In Disney’s sports division, ESPN revenue rose 8% to $4.81 billion and operating income was up 15% to $228 million. For fiscal Q2, the company said sports segment operating income will be “adversely impacted by approximately $100 million due to college sports” and one additional NFL playoff game, along with about $50 million from exiting the Venu Sports joint venture that Disney had formed with Fox Corp. and Warner Bros. Discovery.
Disney’s Experiences division revenue was up 3%, to $9.4 billion, while operating income of $3.1 billion was flat with fiscal Q1 2024. That reflected about $120 million in costs due to Hurricanes Milton and Helene and pre-opening expenses of $75 million for the launch of the Disney Treasure cruise ship. Domestic Parks & Experiences operating income declined 5%, while International Parks & Experiences operating income increased 28%. In the March quarter, Disney Cruise Line will incur pre-opening expenses of approximately $40 million.
Iger, in his comments, said the Experiences segment “demonstrated its enduring appeal as we continue investing strategically across the globe.”
During the quarter, Disney closed its joint venture with Reliance Industries in India to merge its Star and Hotstar assets with Viacom18’s TV and streaming business. Disney owns 37% of the Star India joint venture — and that has changed how it reports certain parts of the business.
For starters, Disney no longer reports Disney+ Hotstar India as part of its direct-to-consumer streaming business. The company’s Disney+ figures now incorporate subscribers in Southeast Asia that were previously reported with Disney+ Hotstar. In revised numbers for the September 2024 quarter, that shifted 2.6 million customers to Disney+’s international subscriber line.
Disney+ globally closed out last year with 124.6 million subs, down 700,000 sequentially. That included a 1.5 million loss internationally to 67.8 million and an 800,000 gain in the U.S./Canada to 56.8 million. For the March quarter, the company is forecasting another “modest decline” in total Disney+ subscribers compared with fiscal Q1.
Disney’s fiscal Q1 report includes about one and a half months of Star India’s operating results (through Nov. 14, 2024). For fiscal 2025, the India business will contribute a projected $73 million to Disney’s Entertainment segment operating income (compared with $254 million in the prior year) and $9 million to Sports segment operating income (compared with a $636 million loss in the prior year). In the December quarter, Disney recorded a $143 million loss in connection with the Star India transaction.
Meanwhile, Disney’s complete buyout of Comcast’s one-third stake in Hulu remains pending. Hulu had 53.6 million total customers at year-end, up from 52.0 million the prior quarter. The number of Hulu customers with a live TV package remained unchanged at 4.6 million. Last month, Disney announced a deal with pay-TV streaming provider Fubo to combine Hulu + Live TV with Fubo’s operations in a joint venture (70% owned by Disney), set to close in 12-18 months.
With the fiscal Q1 2025 report, Disney is no longer reporting financial info for its combined direct-to-consumer streaming businesses (Disney+, Hulu and ESPN+) as it has up until now. ESPN+ financials are consolidated in Disney’s Sports segment. For the year-end quarter, ESPN+ dropped 700,000 subs to stand at 24.9 million.
