Disney Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

The Walt Disney Company DIS reported third-quarter fiscal 2025 adjusted earnings of $1.61 per share, which beat the Zacks Consensus Estimate by 10.3% and increased 15.8% year over year.

Revenues rose 2.1% year over year to $23.6 billion but missed the consensus mark by 0.1%.

Segment Details

Media and Entertainment Distribution revenues (45.3% of revenues) increased 1.2% year over year to $10.7 billion.

Revenues from Linear Networks declined 14.7% year over year to $2.27 billion. Direct-to-Consumer revenues increased 6.4% year over year to $6.17 billion. Content Sales/Licensing and Other revenues grew 6.9% year over year to $2.25 billion.

Parks, Experiences and Products revenues (38.4% of revenues) rose 8.3% year over year to $9.08 billion. Domestic revenues were $6.4 billion, up 10% year over year. International revenues increased 5.6% year over year to $1.69 billion in the reported quarter. 

Meanwhile, revenues from Disney’s Consumer Products increased 2.9% year over year to $992 million.

Subscriber Details

As of June 28, 2025, Disney+ had 127.8 million paid subscribers compared with 126 million as of March 29, 2025. 

Domestic Disney+ average monthly revenue per paid subscriber increased 0.4% sequentially to $8.09 as higher advertising revenues were offset by the impact of subscriber mix shifts.

International Disney+ (excluding Disney+ Hotstar) average monthly revenue per paid subscriber rose 2% sequentially to $7.67 due to increases in prices and subscriber mix shifts.

Hulu SVOD Only average monthly revenue per paid subscriber increased 0.3% sequentially to $12.4, as higher advertising revenues were offset by the impact of subscriber mix shifts.

Operating Details

Costs & expenses increased 1% year over year to $20 billion in the reported quarter.

Segmental operating income was $4.57 billion, up 8.3% year over year.

Media and Entertainment Distribution’s segmental operating income declined 14.9% year over year to $1.02 billion due to lower results at Linear Networks and Content Sales/Licensing, partially offset by an improvement in Direct-to-Consumer.

Linear Networks’ operating income declined 27.8% to $697 million. Domestic operating income fell 13.9% year over year to $587 million due to a decline in advertising revenues attributable to a decrease in rates and average viewership.

Direct-to-Consumer operating income was $346 million against the year-ago quarter’s loss of $19 million, primarily owing to subscription revenue growth attributable to higher effective rates, reflecting increases in prices and subscriber growth. The increase was also driven by the absence of Star India subscription revenues in the current quarter due to the Star India transaction. 

Content Sales/Licensing and Other operating loss came in at $21 million against an operating income of $254 million reported in the year-ago quarter. The decrease in operating results was due to lower theatrical distribution results and higher cost impairments in the current quarter. The current quarter reflected to release of Elio, Thunderbolts and Lilo & Stitch, while the prior-year quarter included Inside Out 2.

Parks, Experiences and Products’ operating income was $3.51 billion, up 13.2% year over year. 

The Domestic segment reported an operating income of $1.65 billion, up 22.5% year over year, due to growth in domestic parks and resorts and, to a lesser extent, Disney Cruise Line, reflecting an increase in guest spending and higher volumes attributable to increases in passenger cruise days and occupied room nights.

The International segment reported an operating income of $422 million, down 3% year over year.

Consumer Products’ operating profit increased 0.9% year over year to $444 million.

Balance Sheet

As of June 28, 2025, cash and cash equivalents were $5.36 billion compared with $5.85 billion as of March 29, 2025.

Total borrowings (including the current portion of borrowings) were $42.2 billion as of March 29, 2025, compared with $42.9 billion as of March 29, 2025.

Free cash flow was $1.88 billion in the reported quarter.

Guidance

In the fourth quarter of fiscal 2025, Disney expects total Disney+ and Hulu subscriptions to increase by more than 10 million compared to third-quarter fiscal 2025, with the majority of the rise coming from Hulu as a result of an expanded Charter deal. For Disney+ subscribers specifically, the company anticipates a modest increase compared to third-quarter fiscal 2025 levels.

Disney provided comprehensive guidance for fiscal 2025, projecting adjusted earnings per share of $5.85, representing an 18% increase over fiscal 2024. For the Entertainment segment, the company expects Direct-to-Consumer operating income of $1.3 billion and double-digit percentage segment operating income growth overall. The Sports segment is projected to achieve 18% segment operating income growth, while the Experiences segment is expected to deliver 8% segment operating income growth.

The company also provided specific guidance on operational expenses, projecting Disney Cruise Line pre-opening expenses of approximately $185 million for the full fiscal year, with roughly $50 million of that amount expected in fourth-quarter fiscal 2025. Additionally, Disney anticipates an equity loss from their India joint venture of approximately $200 million, which is primarily driven by purchase accounting amortization related to the joint venture formation completed in November 2024.

This guidance reflects Disney's expectations as management continues to execute on its strategic priorities across streaming services, traditional entertainment, sports programming, and theme park experiences, while managing the integration costs and impacts from recent strategic transactions and business expansions.

Zacks Rank & Other Stocks to Consider

Disney currently carries a Zacks Rank #2 (Buy).

Amer Sports, Inc. AS, Afya AFYA and ADTALEM GBL EDU ATGE are some other top-ranked stocks that investors can consider in the broader Consumer Discretionary sector. Afya currently sports a Zacks Rank #1 (Strong Buy). Afya is set to report its second-quarter 2025 results on Aug. 21. You can see the complete list of today’s Zacks #1 Rank stocks here.

Amer Sports currently carries a Zacks Rank #2. Amer Sports is set to report its second-quarter 2025 results on Aug.19.

ADTALEM GBL EDU currently carries a Zacks Rank #2. ADTALEM GBL EDU is set to report its fourth-quarter fiscal 2025 results on Aug.7.

Zacks' Research Chief Picks Stock Most Likely to "At Least Double"

Our experts have revealed their Top 5 recommendations with money-doubling potential – and Director of Research Sheraz Mian believes one is superior to the others. Of course, all our picks aren’t winners but this one could far surpass earlier recommendations like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

Source Zacks-com