Disney’s Streaming and Experiences Businesses Deliver Gains While EPS Guidance Signals Growth Ahead

Disney’s fiscal 2025 results underscore continued growth in key segments such as streaming and parks, setting the stage for double-digit earnings-per-share gains in 2026 and 2027—even as linear TV faces ongoing challenges.

Streaming Subscriber Surge and Experiences Drive Top-Line Growth

For the full year, Disney’s total revenues climbed 3% to $94.43 billion, with segment operating income up 12% to $17.55 billion. Diluted EPS leapt to $6.85, while adjusted EPS improved 19% to $5.93, reflecting substantial progress in both operations and cost management. Notably, Disney+ and Hulu added a combined 12.4 million subscriptions during Q4—now totaling 196 million—pointing to robust momentum in Disney’s Direct-to-Consumer (DTC) strategy.

Record operating income in Experiences, up 8% to $9.99 billion for the year, also underpinned results. Both domestic and international parks contributed—international up 25% and domestic up 9% for Q4—benefiting from volume growth, higher guest spending, and the expansion of cruise lines.

Entertainment Streaming Profits Accelerate Despite Linear TV Headwinds

The DTC business shined with a 39% year-over-year Q4 operating income gain to $352 million, thanks to rising subscribers and effective price increases. While entertainment’s total operating income for Q4 fell 35% due to difficult theatrical comparisons, the full year still saw a strong 19% rise, ending at $4.67 billion.

Linear Networks (traditional TV) remained a weak spot, with Q4 revenues and operating income declining 16% and 21% respectively, as advertising and subscriber counts shrank. Management flagged lower political advertising and a more challenging comparison after major events in the prior-year quarter. Content sales also dipped as box office slates normalized following last year’s hits like Inside Out 2 and Deadpool & Wolverine.

Cash Flow Strengthens, Shareholder Returns Expand

Free cash flow for the year reached $10.08 billion—an 18% increase over FY2024—driven by higher segment profits, lower content spend (partly from the India JV), and a $4.13 billion surge in cash from operations. Despite a sizable jump in capital expenditures to $8 billion (mostly for cruise ships and new theme park attractions), Disney’s balance sheet and cash generation remained robust. The company doubled its share repurchase target to $7 billion for fiscal 2026 and announced a $1.50 per share cash dividend payable in two installments for the coming year.

Guidance: Disney Projects Double-Digit EPS Growth and Higher Investments

Looking to 2026, Disney forecasts double-digit adjusted EPS growth and similar gains for 2027, underscoring management’s confidence in operational momentum. The outlook includes $24 billion earmarked for content investments, $19 billion in operating cash flow, and continued share buybacks. Streaming is set for double-digit segment income growth (weighted toward H2 2026), and Experiences is projected to grow at a high-single-digit rate—despite higher pre-opening expenses for new cruise ships. Meanwhile, sports should see low-single-digit income growth, primarily in the latter half of the year as timing of rights expenses stabilizes.

Takeaway: Disney’s Results Highlight Streaming and Parks as Core Growth Engines

While legacy TV and film face structural headwinds, Disney’s expansion in streaming, experiences, and cash generation has positioned the company for sustained shareholder returns. Double-digit EPS guidance and strong capital return commitments show that management is confident in their playbook—even as parts of the business adapt to shifting industry realities.

Investors may want to track Disney’s ability to maintain momentum in streaming subscriber additions, execute on park expansions, and manage cost pressures in traditional TV. As capital spending ramps up for new ships and attractions, and DTC competition remains intense, Disney’s results suggest that the company is focusing on growth areas while not ignoring operational discipline.

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