Disney(DIS) - 2025 Q3 - Quarterly Report

Financial Performance - Total revenues for the quarter ended June 28, 2025, were $23,650 million, an increase of 2.1% from $23,155 million in the same quarter of 2024[14] - Net income attributable to The Walt Disney Company for the quarter was $5,262 million, compared to $2,621 million in the prior year, representing a 100% increase[14] - Earnings per share (diluted) for the quarter was $2.92, up from $1.43 in the same quarter last year, reflecting a 104% increase[14] - Comprehensive income for the nine months ended June 28, 2025, was $11,741 million, up from $11,091 million in the same period last year, indicating a growth of 5.85%[25] - The company reported an income before income taxes of $3,211 million for the quarter ended June 28, 2025, compared to $3,093 million for the same quarter in 2024, reflecting an increase of 3.8%[36] - The company reported a 50% increase in income before income taxes for the nine months ended June 28, 2025, totaling $9,958 million compared to $6,621 million in the prior year[167] Cash Flow and Assets - Cash provided by operations for the nine months ended June 28, 2025, was $13,627 million, compared to $8,453 million for the same period in 2024, indicating a 61% increase[20] - Total assets as of June 28, 2025, were $196,612 million, slightly up from $196,219 million as of September 28, 2024[18] - The company has $5.4 billion in cash and cash equivalents as of June 28, 2025, down from $6.0 billion as of September 28, 2024[60] - The company has a total borrowing of $42.3 billion as of June 28, 2025, down from $45.8 billion as of September 28, 2024[61] Equity and Liabilities - The total equity attributable to Disney shareholders increased to $109,145 million as of June 28, 2025, from $100,696 million as of September 28, 2024[18] - The company’s current liabilities decreased to $32,972 million as of June 28, 2025, from $34,599 million as of September 28, 2024[18] - The balance of retained earnings as of June 28, 2025, was $59,109 million, up from $49,273 million in the previous year, reflecting an increase of 19.56%[25] Segment Performance - Total segment revenues for the quarter ended June 28, 2025, reached $23,650 million, an increase from $23,155 million in the same quarter of the previous year, representing a growth of 2.14%[34] - Segment operating income for the quarter was $4,575 million, compared to $4,225 million in the prior year, reflecting an increase of 8.27%[34] - The Entertainment segment reported revenues of $10,704 million for the quarter, a slight increase from $10,580 million year-over-year, while operating income decreased to $1,022 million from $1,201 million[34] - The Sports segment generated revenues of $4,308 million, down from $4,558 million in the previous year, with operating income increasing to $1,037 million from $802 million[34] - The Experiences segment achieved revenues of $9,086 million, up from $8,386 million, with operating income rising to $2,516 million from $2,222 million[34] Shareholder Actions - Common stock repurchases totaled $711 million in the quarter ended June 28, 2025, compared to $1,522 million in the same quarter of the previous year[25] - The company declared dividends of $0.50 per share amounting to $0.9 billion on July 23, 2025, and January 16, 2025[81] - During the quarter ended June 28, 2025, the company repurchased 7.2 million shares for $0.7 billion, while 23.7 million shares were repurchased for $2.5 billion in the nine months ended June 28, 2025[82] Legal Matters - The company faced multiple legal challenges, including a securities class action lawsuit alleging misstatements regarding subscriber growth for the Disney+ platform[92] - The company intends to vigorously defend against the lawsuits, which are in early stages and cannot reasonably estimate potential losses at this time[94] - The company reached a settlement in principle for the Biddle/Fendelander Action, which is not expected to be material for the company[98] Tax and Deferred Revenue - The effective income tax rate was negative 85.1% in the current quarter, primarily due to a $3.3 billion non-cash tax benefit from the change in Hulu's U.S. income tax classification[144] - The company expects to recognize $16 billion in revenue from unsatisfied performance obligations, with $2 billion in fiscal 2025, $6 billion in fiscal 2026, $3 billion in fiscal 2027, and $5 billion thereafter[43] Subscriber Metrics - Disney+ domestic paid subscribers increased to 57.8 million, a 5% increase year-over-year, while international subscribers rose to 69.9 million, a 6% increase[184] - Hulu's total paid subscribers reached 55.5 million, reflecting a 9% increase year-over-year, with SVOD only subscribers at 51.2 million, a 10% increase[184] - Average monthly revenue per paid subscriber for domestic Disney+ increased to $8.09, a 5% increase from the previous year, and international revenue rose to $7.67, a 17% increase[185][187] Costs and Expenses - Cost of services decreased by 2%, or $0.2 billion, to $13.0 billion, impacted by a 7 percentage point decrease from the Star India Transaction[137] - Selling, general, administrative and other costs increased by 7%, or $0.3 billion, to $4.1 billion, driven by higher marketing costs[138] - Interest expense, net decreased by 5% to $324 million, attributed to lower average debt balances and rates[141]