Disney exceeds expectations in Q2 2025 with a 7% revenue rise, driven by domestic parks, Disney+ growth, and cost efficiencies in TV operations.

The Walt Disney Company functions as a publicly traded company. As such, a certain number of meetings occur each year to update the stockholders and others about the direction and state of the company.

Disney Experiences Revenue Continues to Climb

The Walt Disney Company released its second quarter earnings for fiscal year 2025. The Experiences division, which includes the Disney theme parks, cruise line, and products, posted revenue of $8.9 billion with an operating income of $2.5 billion. That represents a 6% increase versus this time last year, and on the operating income front, Disney Experiences saw a 9% year-over-year bump.

Domestically, theme parks recorded $6.5 billion in revenue and $1.8 billion in profit, a 9% and 13% jump, respectively. However, International parks saw a 5% decline in revenue to $1.4 billion and a 23% decline in operating income to just $225 million. Disney explained the situation this way:

Operating results at our domestic parks and experiences increased compared to the prior-year quarter primarily due to growth at our domestic parks and resorts and, to a lesser extent, Disney Vacation Club and Disney Cruise Line reflecting:

• Higher volumes attributable to increases in passenger cruise days, theme park attendance, occupied room nights and Disney Vacation Club unit sales. Additional passenger cruise days reflected the launch of the Disney Treasure in the first quarter of the current year
• An increase in guest spending due to higher spending at our theme parks
• Increased costs primarily attributable to the fleet expansion at Disney Cruise Line and inflation

The decrease in operating income at our international parks and experiences was attributable to Shanghai Disney Resort and Hong Kong Disneyland Resort due to lower theme park attendance and increased costs.

Optimism About Streaming Services and Television

Variety reported, “Operating profit in Disney’s streaming business jumped for the first three months of 2025, as Disney+ unexpectedly added 1.4 million subscribers in the quarter. Despite gathering economic storm clouds, chief Bob Iger said the Mouse House remains “optimistic” about its current fiscal year guidance.” These quotes from the earnings call sound positive in a time when economic indicator are less than positive.

Streaming service Hulu subs also rose by 1.1 million, to 54.7 million in the quarter. Total revenue from Disney+ and Hulu increased 8%, to $6.12 billion, driven in part by higher retail pricing, and operating income shot up more than sevenfold, to $336 million.

The company’s domestic linear TV business, which includes ABC, saw revenue fall 3% to $2.2 billion while operating income grew 20% to $625 million. The company said that the improved profitability was due to lower marketing and programming costs at the company’s cable networks because of “fewer new shows” and decreased technology costs. Domestic TV ad revenue dropped in the quarter because of “lower rates and fewer impressions attributable to lower average viewership.” Affiliate revenue for the quarter was flat, with higher rates offsetting a drop in subscribers.

At ESPN, revenue was up 5%, to $4.53 billion, while operating income fell 16%, which the company attributed to costs associated with airing three additional college football playoff games and one additional NFL game. In addition, a write-off from exiting the Venu Sports joint venture hurt profitability in the sports segment. ESPN’s domestic ad revenue was also up 29% year over year for the period. Paid subscribers to ESPN+ declined by 800,000, to 24.1 million.

Overall Disney Earnings

Overall, the company reported $23.62 billion in revenue, up 7%, for the quarter ended March 29 (Disney’s fiscal Q2 2025). Disney posted net income of $3.28 billion versus a net loss of $20 million in the year-ago period, translating to adjusted earnings per share of $1.41 (up 20%). Fueled by the higher streaming profit, domestic theme parks, and “home video sales of “Moana 2” home video sales, the results easily topped expectations.

Projections

For fiscal year 2025, the “Mouse House” expects adjusted earnings per share of $5.75, which would be up 16% year over year. The media company forecast cash provided by operations of $17 billion (versus $14 billion in fiscal 2024), up $2 billion from prior guidance, driven by a tax payment deferral. They also expect double-digit increases in operating income for its entertainment and sports segments and 6%- 8% growth in operating income for its theme park and consumer products business.

Financial Caution Voiced by Disney

Disney cautioned in announcing the earnings, “We continue to monitor macroeconomic developments for potential impacts to our businesses and recognize that uncertainty remains regarding the operating environment for the balance of the fiscal year,” which ends in late September 2025. Bob Iger, in prepared remarks, sounded an upbeat note. “Overall, we remain optimistic about the direction of the company and our outlook for the remainder of the fiscal year.”

“Our outstanding performance this quarter — with adjusted EPS up 20% from the prior year driven by our Entertainment and Experiences businesses — underscores our continued success building for growth and executing across our strategic priorities,” Iger said. “Following an excellent first half of the fiscal year, we have a lot more to look forward to, including our upcoming theatrical slate, the launch of ESPN’s new DTC offering, and an unprecedented number of expansion projects underway in our Experiences segment.”

For more theme park-related news and information, visit MSM News.

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