Disney(DIS) - 2024 Q4 - Annual Results

Financial Performance - Revenues increased 6% in Q4 to $22.6 billion from $21.2 billion in the prior-year quarter, and 3% for the year to $91.4 billion from $88.9 billion[2] - Income before income taxes declined 6% to $0.9 billion in Q4 from $1.0 billion in the prior-year quarter, but increased 59% for the year to $7.6 billion from $4.8 billion[2] - Diluted EPS for Q4 increased 79% to $0.25 from $0.14 in the prior-year quarter, and for the year more than doubled to $2.72 from $1.29[2] - Total segment operating income grew 23% in Q4 to $3.7 billion and 21% for the year to $15.6 billion[3] - Net income attributable to The Walt Disney Company increased to $460 million for the quarter ended September 28, 2024, compared to $264 million in the prior year[49] - Net income for the year ended September 2024 was $5,773 million, compared to $3,390 million for the year ended September 30, 2023, an increase of approximately 70.5%[54] - Reported diluted EPS for the quarter ended September 28, 2024, was $0.25, a 79% increase compared to the prior year[67] - Excluding certain items, diluted EPS for the same quarter was $1.14, reflecting a 39% increase year-over-year[67] - Total segment operating income for the year ended September 28, 2024, was $15,601 million, a 21% increase from $12,863 million in the prior year[72] - Cash provided by operations increased to $13,971 million in September 2024 from $9,866 million in September 2023, reflecting a growth of about 41.3%[54] Subscriber Growth - Disney+ Core and Hulu subscriptions reached 174 million, with over 120 million Disney+ Core paid subscribers, an increase of 4.4 million over the prior quarter[3] - Total paid subscribers for Disney+ reached 122.7 million, up 4% from the previous quarter[21] - ESPN+ paid subscribers increased by 3% to 25.6 million, but average monthly revenue per subscriber decreased by 5% to $5.94[29] - The company anticipates continued subscriber growth in its DTC services, although actual results may vary due to various market conditions and competitive pressures[80] Direct-to-Consumer Segment - Direct-to-Consumer operating income improved to $253 million from a loss of $420 million in the prior year, driven by subscription revenue growth and lower marketing costs[17][18] - DTC streaming businesses reported revenue of $6,296 million for the quarter ended September 28, 2024, a 13% increase from $5,553 million in the prior year[33] - DTC streaming businesses generated $253 million in revenue for the quarter, a significant drop from $321 million year-over-year, reflecting a decline of 21.2%[78] - DTC streaming businesses reported an operating loss of $143 million for the year, a deterioration from a profit of $134 million the previous year[78] - The company is focusing on strategic initiatives to enhance content offerings and improve profitability in its direct-to-consumer segment[80] Capital Expenditures and Investments - Targeting $3 billion in stock repurchases and approximately $8 billion of capital expenditures for fiscal 2025[6] - Total investments in parks, resorts, and other property increased to $5,412 million from $4,969 million, reflecting higher spending on cruise ship fleet expansion and new attractions[45] - Investments in parks, resorts, and other property amounted to $5,412 million in September 2024, compared to $4,969 million in September 2023, an increase of approximately 8.9%[54] - Future capital expenditures will be directed towards growth opportunities and market expansion, with an emphasis on new product development and technology advancements[80] Operating Income and Revenue Breakdown - Entertainment segment operating income improved significantly to $1.1 billion in Q4, up from $0.3 billion in the prior-year quarter[3] - Entertainment segment revenues increased by 14% year-over-year to $10,829 million, with Direct-to-Consumer revenues growing by 15% to $5,783 million[12] - Linear Networks revenues decreased by 6% to $2,461 million, with domestic revenues down 5% to $1,997 million and international revenues down 12% to $464 million[13] - ESPN segment revenues increased by 1% to $3,856 million, with domestic revenues slightly up by 1% to $3,492 million[26] - Parks & Experiences revenues grew by 1% to $8,240 million, with domestic parks revenue increasing by 3% to $5,521 million[30] - Domestic parks and experiences saw an increase in operating income driven by guest spending growth, despite lower sales of Disney Vacation Club units and higher costs due to inflation and new offerings[31] - International parks and experiences experienced a decrease in operating results due to lower attendance and increased costs, with a decline in per capita guest spending partially offset by higher per room spending at resorts[32][33] Cash Flow and Financial Position - Cash provided by operations increased by $4.1 billion to $14.0 billion, driven by lower production spending and higher operating income at Entertainment[43] - Total current assets decreased from $32,763 million in September 2023 to $25,241 million in September 2024, a decline of approximately 22.9%[52] - Cash and cash equivalents dropped significantly from $14,182 million to $6,002 million, representing a decrease of about 57.7%[52] - Total liabilities decreased from $101,622 million in September 2023 to $90,697 million in September 2024, a reduction of approximately 10.8%[52] - The company reported a total equity of $105,522 million as of September 28, 2024, up from $103,957 million a year earlier, indicating an increase of about 1.5%[52] Restructuring and Impairment Charges - Restructuring and impairment charges totaled $1,543 million, up from $1,021 million in the prior year, with significant impairments related to goodwill and content[35] - The company incurred restructuring and impairment charges of $1,543 million in the quarter ended September 28, 2024, compared to $965 million in the prior year, a 60% increase[72] - Charges for impairments included $1,545 million related to Star India and $1,287 million for goodwill in the current year[70] Future Outlook - Fiscal 2025 guidance includes high-single digit adjusted EPS growth and approximately $15 billion in cash provided by operations[6] - The company anticipates double-digit adjusted EPS growth for fiscal 2026 and 2027[6] - The company is committed to evaluating its performance metrics, particularly in the DTC segment, to provide clearer insights for investors[79] - The company will host a conference call on November 14, 2024, to discuss these results and future outlooks, accessible via their investor relations website[81]