Disney Q3 Earnings Surpass Estimates, Revenues Increase Y/Y

Core Insights - The Walt Disney Company reported third-quarter fiscal 2025 adjusted earnings of $1.61 per share, exceeding the Zacks Consensus Estimate by 10.3% and reflecting a year-over-year increase of 15.8% [1] - Revenues for the quarter rose 2.1% year over year to $23.6 billion, slightly missing the consensus mark by 0.1% [1] Segment Details - Media and Entertainment Distribution revenues, accounting for 45.3% of total revenues, increased 1.2% year over year to $10.7 billion [2] - Linear Networks revenues declined 14.7% year over year to $2.27 billion, while Direct-to-Consumer revenues grew 6.4% year over year to $6.17 billion [2] - Content Sales/Licensing and Other revenues rose 6.9% year over year to $2.25 billion [2] - Parks, Experiences and Products revenues, making up 38.4% of total revenues, increased 8.3% year over year to $9.08 billion, with domestic revenues up 10% to $6.4 billion and international revenues up 5.6% to $1.69 billion [3] Subscriber Details - As of June 28, 2025, Disney+ had 127.8 million paid subscribers, up from 126 million as of March 29, 2025 [4] - Domestic Disney+ average monthly revenue per paid subscriber increased 0.4% sequentially to $8.09, while international average monthly revenue rose 2% to $7.67 [4] Operating Details - Total costs and expenses increased 1% year over year to $20 billion, with segmental operating income rising 8.3% to $4.57 billion [6] - Media and Entertainment Distribution's segmental operating income fell 14.9% year over year to $1.02 billion, primarily due to lower results in Linear Networks and Content Sales/Licensing [6] - Parks, Experiences and Products' operating income increased 13.2% year over year to $3.51 billion [9] Balance Sheet - As of June 28, 2025, cash and cash equivalents were $5.36 billion, down from $5.85 billion as of March 29, 2025 [11] - Total borrowings were $42.2 billion, a decrease from $42.9 billion as of March 29, 2025 [11] - Free cash flow for the quarter was $1.88 billion [11] Guidance - For the fourth quarter of fiscal 2025, Disney expects total Disney+ and Hulu subscriptions to increase by over 10 million, with most growth coming from Hulu [12] - The company projects adjusted earnings per share of $5.85 for fiscal 2025, an 18% increase over fiscal 2024 [13] - Direct-to-Consumer operating income is expected to reach $1.3 billion, with overall double-digit percentage growth anticipated for the Entertainment segment [13]