The Walt Disney Company (DIS) Q1 2026 Earnings Call Transcript

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary indicates strong financial performance, strategic expansion, and positive shareholder return plans, with high revenue in the Experiences segment and promising product developments. The Q&A section reinforces this with positive analyst sentiment and strategic insights, despite some uncertainties in management responses. The overall sentiment is positive, suggesting a likely stock price increase.

Key Financial Performance

Global Box Office Revenue $6.5 billion in calendar year 2025, marking the third biggest year ever for Disney and the ninth year as #1 at the global box office over the past decade. This reflects the success of films like Avatar: Fire and Ash, Zootopia 2, and Lilo & Stitch, which collectively contributed to $3 billion in revenue. Zootopia 2 alone earned more than $1.7 billion, becoming Hollywood's highest-grossing animated film ever and one of the top 10 highest-grossing films of all time. The success is attributed to strong storytelling and interconnected business strategies.

Streaming Performance The quarter's performance reflects strong content and technology improvements. Disney+ saw encouraging results from investments in local content and international growth. Product enhancements and new content strategies, such as Sora-generated content and the launch of ESPN Unlimited, contributed to the positive results. ESPN achieved outstanding ratings, including its most-watched college football regular season since 2011 and its second-highest Monday Night Football viewership in 20 years. The acquisition of NFL Network and RedZone channel further bolstered ESPN's offerings.

Experiences Segment Revenue Quarterly revenue exceeded $10 billion for the first time, driven by expansion projects at theme parks and the launch of new attractions like the World of Frozen at Disneyland Paris. The Disney Cruise Line also contributed with the launch of the Disney Destiny and the upcoming Disney Adventure, which will be homeported in Asia. The growth is attributed to strategic investments and global expansion efforts.

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Operating Highlights

Film Studios Revenue: Generated over $6.5 billion at the global box office in 2025, marking the third biggest year ever for Disney.

New Film Releases: Avatar: Fire and Ash, Zootopia 2, and Lilo & Stitch each crossed the $1 billion threshold in 2025. Zootopia 2 became Hollywood's highest-grossing animated film ever, earning over $1.7 billion.

Streaming Enhancements: Introduced product enhancements on Disney+, including new vertical and short-form experiences, and plans for Sora-generated content through a licensing agreement with OpenAI.

ESPN Unlimited: Launched ESPN Unlimited, showing strong adoption and engagement.

International Growth: Invested in local content for Disney+ to drive international growth.

Disney Adventure in Asia: Launching Disney Adventure cruise ship in Asia, expanding global reach.

Theme Park Expansion: Expansion projects underway at all theme parks, including the new World of Frozen at Disneyland Paris, nearly doubling the size of the second park.

Disney Cruise Line: Launched Disney Destiny cruise ship and preparing for Disney Adventure launch.

NFL Media Assets Acquisition: Acquired NFL Network and other media assets, including RedZone channel, to enhance ESPN's offerings.

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Risk or Challenges

Economic and Geopolitical Conditions: The company acknowledges risks related to economic and geopolitical conditions, which could impact its operations and financial performance.

Competition: Competitive pressures in the entertainment and streaming industries are highlighted as potential risks to Disney's market position and profitability.

Execution Risks: Challenges in executing strategic initiatives, such as international growth and product enhancements, are noted as risks that could affect operational success.

Market for Advertising: Uncertainties in the advertising market are identified as a factor that could influence revenue generation.

Legal and Regulatory Developments: Potential legal and regulatory changes are mentioned as risks that could impact the company's operations and strategic plans.

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Guidance & Outlook

Upcoming Film Releases: Disney is excited about numerous titles coming to theaters this year, including The Devil Wears Prada 2, The Mandalorian & Grogu, Toy Story 5, the live-action Moana, and Avengers: Doomsday.

Streaming Enhancements: Disney+ will introduce a curated slate of Sora-generated content following a licensing agreement with OpenAI. The company is also rolling out product enhancements to elevate the user experience and developing new vertical and short-form experiences.

ESPN Unlimited and NFL Acquisition: Disney launched ESPN Unlimited and acquired NFL Network and other media assets, including the linear rights to the league's RedZone channel, enhancing ESPN's content portfolio.

Theme Park Expansion: Expansion projects are underway at every Disney theme park. Next month, Disney will open the new World of Frozen at Disneyland Paris, nearly doubling the size of the second park.

Disney Cruise Line: Disney is preparing for the launch of the Disney Adventure next month, its first ship homeported in Asia, aimed at expanding its global reach.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Does the value ascribed to Warner Bros. and HBO impact Disney's strategies to monetize its premium IP?

A:Robert Iger emphasized the tremendous value of Disney's assets, including its IP, brands, franchises, and ESPN. He highlighted Disney's successful IP deals, such as the Fox acquisition, and the value generated from Disney's movies and parks. He stated that Disney does not feel the need to buy more IP and will focus on creating its own.

Q:What are the drivers of SVOD's 13% subscription revenue growth?

A:Hugh Johnston attributed the growth to pricing, growth in both North America and international markets, and successful bundling of packages like the duo, trio, and Max bundle, which drove engagement and revenue.

Q:How did Walt Disney World perform, and what are the trends in bookings?

A:Hugh Johnston reported a strong quarter for Walt Disney World, with improved attendance and pricing. Bookings for the full year are up 5%, with stronger performance expected in the back half of the year.

Q:What steps can Disney's next CEO take to drive long-term business growth?

A:Robert Iger highlighted the importance of preparing the company for the future and creating growth opportunities. He mentioned investments in the Experiences business and emphasized the need for the company to continue evolving in a changing world.

Q:How does Disney view its relationship with the NFL and the potential for early renewal?

A:Robert Iger expressed satisfaction with the NFL deal, highlighting opportunities for ESPN, including the upcoming Super Bowl. He declined to speculate on the future of the NFL relationship, noting the current agreement's opt-out clause in 2030.

Q:What progress has Disney made on new bundle initiatives and Hulu integration?

A:Robert Iger noted significant progress in making streaming profitable and improving user experience. He mentioned reduced churn with integrated Disney+ and Hulu experiences and plans for a unified app experience by the end of the calendar year.

Q:How does Disney plan to use user-generated AI content from the OpenAI agreement?

A:Robert Iger explained that the agreement allows users to create 30-second videos with Disney characters using Sora. Disney plans to curate these videos on Disney+ and enable subscribers to create short-form videos on the platform, enhancing engagement.

Q:What is the impact of investments in streaming and international content on operating leverage?

A:Hugh Johnston stated that Disney has significantly improved streaming profitability and aims for double-digit margins. He emphasized balancing growth with operating leverage while continuing investments in international content and technology.

Q:What are the drivers of the Entertainment segment's operating income guidance?

A:Hugh Johnston attributed differences in quarterly performance to product launches and a strong theatrical slate in the back half of the year, including major releases like "Devil Wears Prada 2" and "Toy Story 5."

Q:What is the rationale behind the new Entertainment segment disclosure?

A:Hugh Johnston explained that the change reflects how Disney manages the business as a single entity, focusing on content creation and distribution across all channels rather than separating linear networks, streaming, and theatrical.

Q:What is Disney's outlook for the Parks and Experiences business and its EBIT mix?

A:Robert Iger expressed optimism about the Parks and Experiences business, citing expansion projects and strong returns on invested capital. He also highlighted the potential for growth in the entertainment business, creating healthy competition between the two segments.

Q:Review of Unclear Management Responses

A:Management avoided providing specific details on the timing of user-generated AI content on Disney+ and its potential expansion beyond 30-second videos. Additionally, they declined to speculate on the future of the NFL relationship beyond the current agreement's opt-out clause in 2030.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

DIS Transcript

The Walt Disney Company (DIS) Q1 2026 Earnings Call Transcript

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The earnings call highlights strong financial performance with increased operating income across segments and successful strategic initiatives like the ESPN direct-to-consumer launch. The Q&A session reveals optimism for future cash flow and growth in various business areas, despite some uncertainties like the YouTube TV dispute. The integration of Hulu into Disney+ and partnerships like the NFL deal are positive indicators. However, the lack of detailed guidance on certain issues tempers the overall sentiment slightly. Given these factors, a positive stock price movement between 2% to 8% is expected.

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The earnings call highlights several positive developments: 20% EPS growth, strong performance in the Experiences segment, and increased sports viewership. The Q&A section reveals optimistic management sentiment, especially regarding ESPN's NFL deal and the integration of Hulu into Disney+. Despite some deferred guidance, the overall outlook is positive, with strong domestic park performance and new cruise line expansions. These factors suggest a likely stock price increase, aligning with positive sentiment.

DIS Report

Frequently Asked Questions

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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.