The Walt Disney Company has released its earnings for the first fiscal quarter ending December 28, 2024, showing a 5% increase in revenues to US$24.7 billion, up from US$23.5 billion in the same period of the previous fiscal year.

Income before income taxes rose by 27% to US$3.7 billion, compared to US$2.9 billion in Q1 fiscal 2024. Diluted earnings per share (EPS) increased by 35% to US$1.40, up from US$1.04 in the prior year. Total segment operating income saw a 31% rise to US$5.1 billion from US$3.9 billion in the same quarter last year. Adjusted EPS increased by 44% to US$1.76 from US$1.22 in Q1 fiscal 2024.

CEO Robert A. Iger said: "Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years. In fiscal Q1 we saw outstanding box office performance from our studios, which had the top three movies of 2024; we further improved the profitability of our Entertainment DTC streaming businesses; we took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+; and our Experiences segment demonstrated its enduring appeal as we continue investing strategically across the globe. Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth."

The company's Entertainment segment, which includes its linear networks, streaming businesses ad content sales and licensing, reported a 9% increase to US$10.872 billion in revenues, and 95% surge in operating income, reaching US$1.7 billion. Results were driven by improved results in consent sales/ licensing and direct-to-consumer, partially offset by declines in linear.

Revenues in the Direct-to-Consumer streaming business were up 9% to US$6.072 billion, while operating income fell operating income was US$293 million, up from a loss of US$138 million in the 2023 December quarter.

Disney+ saw paid subscribers fall by 1% to 124.6 million globally, however, average monthly revenue per paid subscriber was up 5% to US$7.55 due to pricing increases globally, as well as higher advertising revenues in international markets.

Overall Direct to Consumer advertising revenues were down 2 per cent. Excluding Disney+ Hotstar in India, advertising revenue was up 16% compared to the previous year. Disney+ and Hulu subscriptions increased by 0.9 million to 178 million compared to Q4 fiscal 2024, although Disney+ subscribers decreased by 0.7 million to 125 million.

Content Sales/Licensing and Other operating income increased by $536 million to $312 million, driven by the performance of "Moana 2." The Sports segment operating income increased by $350 million to $247 million, with domestic ESPN advertising revenue rising by 15% compared to the same quarter last year.

The Experiences segment reported operating income of $3.1 billion, comparable to Q1 fiscal 2024, despite a 6 percentage-point adverse impact due to Hurricanes Milton and Helene and pre-opening expenses for Disney Treasure. Domestic Parks & Experiences operating income declined by 5%, influenced by a 9 percentage-point adverse impact from the hurricanes and cruise pre-opening expenses. In contrast, International Parks & Experiences operating income increased by 28% compared to the previous year.

Star India was deconsolidated in Q1 fiscal 2025. The India business is expected to contribute $73 million to the Entertainment segment operating income in fiscal 2025, down from $254 million in the prior year. It is also expected to contribute $9 million to the Sports segment operating income, compared to a $636 million loss in the prior year. The equity loss from the India joint venture was $33 million in Q1, with a full-year expected equity loss of approximately $300 million due to purchase accounting.

For Q2 fiscal 2025, Disney anticipates a modest decline in Disney+ subscribers. The Sports segment operating income is expected to face an adverse impact of approximately $100 million due to college sports and an additional NFL game, and about $50 million from exiting the Venu Sports joint venture. Disney Cruise Line pre-opening expenses of approximately $40 million are expected in Q2 fiscal 2025.

Looking ahead to fiscal year 2025, Disney expects high-single digit adjusted EPS growth compared to fiscal 2024. Approximately $15 billion in cash is expected to be provided by operations in fiscal 2025. The Entertainment segment operating income is projected to grow by double-digit percentages, with an increase in Direct-to-Consumer operating income of approximately $875 million. The Sports segment operating income is expected to grow by 13%, while the Experiences segment operating income is expected to grow by 6% to 8%. Disney Cruise Line pre-opening expenses of approximately $200 million are anticipated for fiscal 2025.