Disney Quarterly Revenue Flat and Operating Income Drops 5%, but Company Affirms Bullish Earnings Outlook on Streaming Momentum

Disney‘s revenue for the September quarter was roughly flat year over year — coming in short of Wall Street estimates — and adjusted earnings per share declined 3%. But Disney+ and Hulu subscriber additions were better than expected, and the company says it’s still on track to deliver double-digit earnings growth over the next two years.

The company reported revenue of $22.46 billion for its fourth quarter of fiscal 2025, which ended Sept. 27, shy of analyst average expectations for $22.75 billion. Adjusted earnings per share of $1.11 beat the Street by 6 cents. Overall segment operating income was $3.5 billion, down 5% year over year, on declines in its linear TV and theatrical businesses offset by strong streaming results and a good quarter for parks and experiences. For its full-year fiscal ’25, revenue was $94.43 billion (up 3%) and adjusted EPS increased 19% to $5.93.

Looking ahead, Disney reiterated its prior guidance of double-digit adjusted EPS growth for fiscal ’26 and again in fiscal 2027. The company announced it is doubling its share repurchases target to $7 billion next year compared with fiscal 2025. And Disney’s board declared a cash dividend of $1.50 per share (payable in January and July 2026), up from $1/share in 2025.

“This was another year of great progress as we strengthened the company by leveraging the value of our creative and brand assets and continued to make meaningful progress in our direct-to-consumer businesses,” Disney CEO Bob Iger said in prepared remarks. “Our strategy, coupled with our portfolio of complementary businesses and a strong balance sheet, enables us to continue investing in high-quality offerings for our consumers and increasing our returns to shareholders, and I’m pleased with our many achievements this fiscal year to position Disney for the future.”

In the September quarter, Disney+ and Hulu revenue increased 8% to $6.25 billion and operating income hit $352 million, up 39%. After investor concerns that streaming subscriptions would get crimped by a backlash over Jimmy Kimmel’s controversial Charlie Kirk remarks, Disney+ notched a net gain of 3.8 million subscribers and Hulu netted 8.6 million (largely due to the expansion of its distribution deal with Charter to bundle Hulu with Spectrum TV Select). It’s the last quarter Disney is disclosing those subscriber numbers, following the lead of Netflix.

Disney’s domestic linear networks business, which includes ABC, saw revenue slide 7% to $1.86 billion. Operating income decreased 5% due to lower advertising stemming from decreases in TV viewership and lower political ad spending (which was $40 million lower than in Q4 fiscal 2024). In addition, the decrease in ad revenue reflected a comparison to the prior-year quarter’s airing of the 2024 Emmy Awards show on ABC.

Revenue in the Disney entertainment group’s Content Sales/Licensing and Other business fell 26% in the quarter, to $1.9 billion, and it posted an operating loss of -$52 million (vs. operating income of $316 million a year prior). Disney chalked that up to a tough compare with record theatrical performances of “Inside Out 2” and “Deadpool & Wolverine” in the prior-year quarter. The most recent quarter included the box-office take for Marvel’s “The Fantastic Four: First Steps,” as well as “The Roses” and “Freakier Friday” and the carry-over performance of the live-action “Lilo & Stitch.”

ESPN domestic revenue for fiscal Q4 2025 was $3.58 billion, up 2%, while operating income declined 3% on higher marketing and programming and production costs. Domestic ad revenue increased 8%. In August, Disney launched ESPN Unlimited, the $29.99/month standalone streaming service that includes everything on ESPN, but the company isn’t providing subscriber numbers for the product.

Disney’s Experiences segment revenue was up 6% to $8.77 billion, inclusive of domestic and international parks, cruises and consumer products. Domestic Parks & Experiences operating income grew 9% to $920 million and International Parks & Experiences operating income grew 25% to $375 million.

In the September quarter, Disney took a $450 million impairment charge for its investment in A+E Global Media, owned as a 50-50 venture with Hearst. This summer, Disney and Hearst tapped Wells Fargo to shop A+E, parent of cable networks A&E Network, History and Lifetime.

For the first quarter of fiscal 2026 (the last three months of calendar 2025), Disney projected direct-to-consumer entertainment operating income of about $375 million. It also forecast lower political advertising revenue of $140 million compared with the year-earlier quarter.

In the December 2025 quarter, Disney said, “theatrical slate comparisons” are expected to drive “an adverse impact to segment operating income of $400 million compared to Q1 fiscal 2025.” That partly reflects more theatrical releases in the period this year, including additional 20th Century Studios and Searchlight titles, and a comparison to the strong performances of “Moana 2” and “Mufasa: The Lion King” in the prior-year quarter. The current quarter releases include 20th Century Studios’ “Predator: Badlands” and box-office disappointment “Tron: Ares”; Disney’s upcoming holiday theatrical releases include “Zootopia 2” and “Avatar: Fire and Ash.”

For full-year fiscal 2026, Disney forecast double-digit percentage segment operating income growth for its entertainment segment (streaming, TV and film) “weighted to the second half of the year,” and operating margin of 10% for Disney+ and Hulu — fueled by continued streaming growth and recent price hikes. For parks and experiences, it expects high single-digit operating income growth, while ESPN will see low single-digit growth reflecting the “timing of rights expenses, which adversely impacts year-over-year comparability in Q2 and Q3.”

In fiscal 2026, Disney expects to spend $24 billion on content across entertainment and sports (vs. approximately $23 billion in FY25) and forecast $9 billion in capital expenditures. The company projected $19 billion in cash provided by operations for FY26, up 7% year over year; that includes the impact of $1.7 billion in taxes Disney deferred from fiscal 2025 to fiscal 2026 as a result of tax relief granted due to the California wildfires.

Disney executives took some time during an investor call to discuss the company’s vision for use of A.I. Iger suggested the technology would help make Disney’s streaming services more “sticky” and “dynamic,” because they are likely to be able to find and discover more content that they like. He also said Disney was engaged in discussions with many A.I. companies to ensure not only that the company’s intellectual property remained protected but also that Disney could find new ways to engage with consumers.

Iger, meanwhile, is about to enter the final year of his contract as CEO, which is up at the end of 2026. The Disney board has said it expects to announce a successor early next year. Earlier this week, Disney extended the employment agreement of CFO Hugh Johnston through 2029.