Revenue and Financial Performance - Revenues for the quarter increased to $22.1 billion from $21.8 billion in the prior-year quarter, a 1% increase[2] - Revenues for the quarter ended March 30, 2024, increased to $22.1 billion from $21.8 billion in the prior-year quarter[57] - Net income attributable to The Walt Disney Company decreased to a loss of $20 million from a profit of $1.3 billion in the prior-year quarter[57] - Net income for the six months ended March 30, 2024, was $2.367 billion, compared to $2.849 billion in the same period last year[62] - Pre-tax income for the six months ended March 30, 2024, was $3,528 million, a 9% decrease compared to $3,896 million in the prior year[79] - Excluding certain items, pre-tax income for the six months ended March 30, 2024, was $6,465 million, a 28% increase compared to $5,147 million in the prior year[79] - Total segment operating income for the six months ended March 30, 2024, was $7,721 million, a 22% increase compared to $6,328 million in the prior year[82] Earnings Per Share (EPS) - Diluted EPS excluding certain items increased to $1.21 from $0.93 in the prior-year quarter, a 30% increase[2][7] - Diluted EPS excluding certain items for the quarter ended March 30, 2024, was $1.21, a 30% increase compared to the prior year period[76] - The new full year adjusted EPS growth target is now 25% due to outperformance in the second quarter[3] Streaming and Subscriber Metrics - Disney+ Core subscribers increased by more than 6 million in the second quarter, and Disney+ Core ARPU increased sequentially by 44 cents[3] - Disney+ Domestic (U.S. and Canada) paid subscribers increased by 17% to 54.0 million, while International (excluding Disney+ Hotstar) subscribers decreased by 2% to 63.6 million[22] - Disney+ Core average monthly revenue per paid subscriber increased by 6% to $7.28, driven by higher retail pricing and a lower mix of promotional subscribers[22][23] - Hulu SVOD Only average monthly revenue per paid subscriber decreased by 4% to $11.84 due to lower advertising revenue, partially offset by higher retail pricing[22][23] - ESPN+ average monthly revenue per paid subscriber increased by 3% to $6.30, driven by higher retail pricing and advertising revenue[32] - DTC streaming businesses revenue increased by 12% to $6.188 billion, with operating loss improving by 97% to $18 million, reflecting cost efficiencies and revenue growth[38] - DTC streaming businesses operating loss for the six months ended March 30, 2024, was $234 million, a significant improvement compared to a loss of $1,712 million in the prior year[89] - Disney+ is available in over 150 countries and territories outside the U.S. and Canada[64] - In Latin America, subscribers to either Disney+ or Star+ standalone services or Combo+ are counted as one Disney+ paid subscriber[65] - International Disney+ (excluding Disney+ Hotstar) includes the Disney+ service outside the U.S. and Canada and the Star+ service in Latin America[66] Experiences and Parks - The Experiences business revenue grew by 10%, segment operating income grew by 12%, and margin expanded by 60 basis points versus the prior year[3] - Domestic Parks and Experiences revenue increased by 7% to $5.958 billion, with operating income up 6% to $1.607 billion, driven by higher guest spending and ticket prices[33][34] - International Parks and Experiences revenue surged by 29% to $1.522 billion, with operating income up 87% to $292 million, benefiting from higher attendance and guest spending[33][35] - The company expects robust operating income growth at Experiences for the full year, despite a roughly comparable third quarter[3] - Investments in parks, resorts, and other property totaled $2.558 billion for the six months ended March 30, 2024[62] Sports and ESPN - Sports operating income declined slightly versus the prior year, reflecting the timing impact of College Football Playoff games at ESPN[3] - ESPN Domestic revenue increased by 4% to $3.866 billion, driven by higher advertising revenue and subscription growth, despite lower affiliate revenue[27][28] Cash Flow and Capital Allocation - The company expects to generate approximately $14 billion of cash provided by operations and over $8 billion of free cash flow this fiscal year[3] - Cash provided by operations increased by $3.6 billion to $5.9 billion, driven by lower film and television production spending and timing of sports rights payments[51] - Free cash flow improved significantly to $3.3 billion from a negative $168 million in the prior-year period[50] - Cash provided by operations for the six months ended March 30, 2024, was $5,851 million, a significant increase compared to $2,262 million in the prior year[84] - Free cash flow for the six months ended March 30, 2024, was $3,293 million, compared to a negative $168 million in the prior year[86] - Estimated free cash flow for full year fiscal 2024 is projected to be $8 billion, with cash provided by operations estimated at $14 billion[87] - The company repurchased $1 billion worth of shares in the second quarter[3] - The company repurchased $1.001 billion of common stock during the six months ended March 30, 2024[62] - Capital expenditures increased to $2.6 billion from $2.4 billion, primarily due to higher spend on new attractions and cruise ship fleet expansion[53] - Cash used in financing activities for the six months ended March 30, 2024, was $10,824 million, compared to $1,126 million in the prior year[84] Restructuring and Impairment Charges - Restructuring and impairment charges totaled $2.052 billion, primarily related to goodwill impairments for Star India and entertainment linear networks[40][42] - Restructuring and impairment charges for the quarter ended March 30, 2024, included goodwill impairments of $2.038 billion[76] - Restructuring and impairment charges for the six months ended March 30, 2024, were $2,052 million, compared to $221 million in the prior year[82] Corporate and Other Expenses - Corporate and unallocated shared expenses increased by $112 million to $391 million, primarily due to higher proxy solicitation costs and compensation expenses[39] - Equity in the income of investees decreased by 18% to $141 million from $173 million, primarily due to lower income from A+E[45] - The effective income tax rate increased to 67.1% from 29.9%, driven by goodwill impairments that are not tax deductible[46] - Net income attributable to noncontrolling interests increased by 9% to $236 million, mainly due to improved results at Hong Kong Disneyland Resort[48] - Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs totaled $434 million for the quarter ended March 30, 2024[76] - Amortization of TFCF and Hulu intangible assets and fair value step-up on film and television costs for the six months ended March 30, 2024, was $885 million, a 22% decrease compared to $1,137 million in the prior year[82] Assets and Liabilities - Total assets decreased to $195.1 billion from $205.6 billion, primarily due to reductions in cash and cash equivalents and goodwill[59] - Total current liabilities increased to $32.9 billion from $31.1 billion, driven by higher accounts payable and accrued liabilities[59] Forward-Looking Statements and Risks - Forward-looking statements include financial performance, earnings expectations, and future operating income, adjusted EPS, free cash flow, and capital allocation plans[91] - The company's future performance may be impacted by domestic and global economic conditions, competitive pressures, and consumer preferences[91] - Factors such as health concerns, international developments, regulatory changes, and technological advancements could affect the company's operations and profitability[91] - The company's ability to create or obtain desirable content at or under the assigned value is a key factor in future performance[91] - The advertising market for programming and income tax expense are also significant considerations for the company's future outlook[91] - The company's Annual Report on Form 10-K for the year ended September 30, 2023, provides additional details on risk factors and financial condition[91] Investor Relations and Communications - The Walt Disney Company will host a conference call on May 7, 2024, at 8:30 AM EDT/5:30 AM PDT, accessible via live webcast[92] - The earnings presentation and webcast replay will be available on the company's investor relations website[92] - Contact information for corporate communications and investor relations is provided for further inquiries[93]
Disney(DIS) - 2024 Q2 - Quarterly Results