Disney(DIS) - 2026 Q1 - Quarterly Results

Financial Performance - Revenues increased 5% for the quarter to $26.0 billion from $24.7 billion in Q1 fiscal 2025[6] - Total segment operating income decreased 9% for the quarter to $4.6 billion from $5.1 billion in Q1 fiscal 2025[6] - Diluted EPS for Q1 decreased to $1.34 from $1.40 in Q1 fiscal 2025, while adjusted EPS decreased to $1.63 from $1.76[6] - Net income attributable to The Walt Disney Company was $2,402 million, a decrease of 5.9% from $2,554 million in the prior year[32] - Net income for the quarter ended December 27, 2025, was $2,484 million, a decrease of 6% compared to $2,644 million for the same quarter in 2024[36] Segment Performance - Entertainment segment revenue increased 7% to $11.6 billion, but operating income declined 35% to $1.1 billion[14] - SVOD revenue increased 11% to $5.3 billion, with operating income rising 72% to $450 million[16] - Sports segment revenue increased 1% to $4.9 billion, but operating income decreased 23% to $191 million[17] - Experiences segment achieved record quarterly revenue of $10.0 billion and operating income of $3.3 billion, with attendance up 1% and per capita spending up 4%[6] - Operating income for Parks & Experiences increased by 6% to $3,309 million, compared to $3,110 million in the prior year[19] Cash Flow and Expenditures - Cash provided by operations decreased significantly by $2,470 million to $735 million, primarily due to higher tax payments[28] - Free cash flow was negative at $(2,278) million, a decline of $3,017 million from $739 million in the prior year[28] - Capital expenditures increased to $3,013 million from $2,466 million, driven by higher spending on cruise ship fleet expansion and new theme park attractions[29] - Cash, cash equivalents, and restricted cash at the end of the period totaled $5,786 million, a slight decrease from $5,582 million in the previous year[48] - The company experienced a net change in cash, cash equivalents, and restricted cash of $(13) million, compared to a decrease of $(520) million in the prior year[48] Guidance and Future Expectations - Fiscal 2026 guidance includes expected double-digit adjusted EPS growth compared to fiscal 2025 and $19 billion in cash provided by operations[9] - The company is on track to repurchase $7 billion of stock in fiscal 2026[9] - The company expects Entertainment segment operating income for Q2 fiscal 2026 to be comparable to Q2 2025, with other Entertainment businesses operating income projected at approximately $0.7 billion[50] Market and Operational Challenges - The Fubo Transaction and the Star India Transaction impacted revenue and operating income across segments[10][11] - The company faces pressures from competitive conditions, including content creation and advertising revenue competition[56] - Consumer preferences and acceptance of content offerings are critical for subscriber additions and churn rates[56] - The advertising market for streaming services and linear networks is a significant focus for the company[56] - Health concerns and their impact on business operations and productions are being monitored[56] - International trade policies and political developments may affect the company's operations[56] - Technological developments are crucial for maintaining competitive advantage[56] - Labor market conditions, including potential work stoppages, could impact business plans[56] - Adverse weather conditions or natural disasters may pose risks to operations[56] Conference Call Information - The Walt Disney Company will host a conference call on February 2, 2026, at 8:30 AM EST to discuss earnings[57] - Prepared management remarks will be available on the company's investor relations website[57]