Financial Performance - Total revenues for the quarter ended March 29, 2025, increased to $23,621 million, up 7% from $22,083 million in the same quarter of 2024[13] - Net income attributable to The Walt Disney Company for the quarter was $3,275 million, compared to a net loss of $20 million in the prior year quarter[13] - Earnings per share (diluted) for the quarter was $1.81, a significant increase from $(0.01) in the same quarter last year[13] - Comprehensive income attributable to Disney for the six months ended March 29, 2025, was $6,651 million, compared to $1,674 million in the same period of 2024[15] - Net income attributable to Disney for the current six-month period increased $3.9 billion, to $5.8 billion; EPS increased to $3.21 from $1.03 in the prior-year period[143] - Income before income taxes for the six months ended March 29, 2025, was $6,747 million, a 91% increase from $3,528 million in the prior year[151] Assets and Equity - Total current assets decreased to $22,735 million as of March 29, 2025, down from $25,241 million at September 28, 2024[18] - Total assets as of March 29, 2025, were $195,833 million, slightly down from $196,219 million at September 28, 2024[18] - As of March 29, 2025, total equity attributable to Disney is $104,339 million, an increase from $100,696 million at September 28, 2024, representing a growth of approximately 3.3%[25] - The company’s total equity, including non-controlling interests, stands at $108,766 million as of March 29, 2025, compared to $105,522 million at September 28, 2024, reflecting an increase of approximately 3.1%[25] Cash Flow and Investments - Cash provided by operations for the six months ended March 29, 2025, was $9,958 million, compared to $5,851 million for the same period in 2024[20] - Investments in parks, resorts, and other property for the six months ended March 29, 2025, totaled $4,328 million, an increase from $2,558 million in the prior year[20] - The company repurchased common stock worth $1,785 million during the six months ended March 29, 2025, compared to $1,001 million in the previous year, reflecting a 78.1% increase in stock repurchases[25] Segment Performance - Total segment revenues for the quarter ended March 29, 2025, were $23,621 million, an increase of 7.0% compared to $22,083 million for the same quarter in 2024[37] - Segment operating income for the quarter ended March 29, 2025, was $4,436 million, up 15.4% from $3,845 million in the same quarter of the previous year[38] - Subscription fees in the Entertainment segment reached $5,215 million for the quarter ended March 29, 2025, a 8.5% increase from $4,805 million in the same quarter of 2024[39] - The Sports segment generated revenues of $4,534 million for the quarter ended March 29, 2025, compared to $4,312 million in the same quarter of 2024, reflecting a growth of 5.1%[39] - Experiences segment revenues were $8,889 million for the quarter ended March 29, 2025, an increase of 5.9% from $8,393 million in the same quarter of 2024[39] Restructuring and Impairment - The company reported a restructuring and impairment charge of $109 million for the quarter, significantly lower than $2,052 million in the same quarter of the previous year[13] - The company incurred restructuring and impairment charges of $109 million in the quarter ended March 29, 2025, compared to $2,052 million in the same quarter of 2024[38] Tax and Deferred Revenue - The company expects to recognize a non-cash tax benefit of approximately $3.3 billion concurrent with the expected completion of the acquisition of NBCU's interest in Hulu in the third quarter of fiscal 2025[32] - Future revenue from unsatisfied performance obligations is estimated at $15 billion, with $3 billion expected to be recognized in the remainder of fiscal 2025[42][43] - Deferred revenues increased to $6.347 billion in the current period from $5.587 billion in the prior period[45] Borrowings and Interest Expense - The Company's total borrowings decreased from $45.815 billion on September 28, 2024, to $42.889 billion on March 29, 2025, reflecting a reduction of $2.926 billion[58] - Interest expense for the quarter ended March 29, 2025, was $346 million, an increase from $311 million in the same quarter of 2024[38] - Interest expense, net decreased 28% to $713 million due to lower average rates and debt balances[148] Legal Matters - The company intends to vigorously defend against ongoing legal matters, including a securities class action lawsuit filed against it[92] - The Company is involved in multiple antitrust lawsuits, including the Biddle Action and Fendelander Action, with claims under Section 1 of the Sherman Act and various state antitrust laws, seeking unspecified money damages and injunctive relief[95] - A new lawsuit, the Unger Action, was filed against the Company, alleging improper bundling of ESPN with other networks and seeking damages and injunctive relief, including a requirement to divest interests in Fubo and Hulu[96] Derivative Instruments and Fair Value - The fair value of the Company's borrowings as of March 29, 2025, is reported at $39.401 billion, with Level 2 borrowings valued at $37.182 billion[101] - The total recorded fair value of liabilities as of March 29, 2025, is $(1.209) billion, with significant liabilities in derivatives related to interest rates and foreign exchange[101] - The Company’s derivative positions measured at fair value show a net derivative position of $46 million as of March 29, 2025[106]

Core Insights - The Walt Disney Company has announced plans to build a new theme park and resort in Abu Dhabi, marking its seventh theme park resort globally [1][2] - The project will be developed by Miral, with Disney's imagineers overseeing creative design and operations, while Disney will not invest capital but will earn royalties [2][3] - The park aims to blend contemporary architecture with advanced technology to provide immersive entertainment experiences [3] Financial Performance - Disney reported a top- and bottom-line beat for its fiscal second quarter, with a 6% year-over-year revenue growth in its experiences business, which includes parks, cruises, and resorts [4] - The Abu Dhabi development is not included in Disney's $60 billion investment pledge for theme parks over the next decade [2] Market Potential - Approximately one-third of the world's population lives within a four-hour flight of the UAE, presenting a significant tourism market of around 500 million potential visitors [4] - The new park will enhance Disney's presence in the UAE, which has seen the company gradually entering the market through retail locations and entertainment shows [4] Unique Features - The resort will feature themed accommodations, unique dining, and retail experiences that reflect both Disney's storytelling heritage and the cultural essence of Abu Dhabi [6] - Yas Island, where the park will be located, is already a hub for entertainment, housing attractions like Ferrari World, Yas Waterworld, and SeaWorld Abu Dhabi [5]

Core Insights - Disney's fiscal second quarter results exceeded expectations, driven by strong performance in its Sports and Experiences divisions, with revenue reaching $23.6 billion, a 7% increase year-over-year [1][2] - Earnings per share rose to $1.45 from $1.21 in the previous year, indicating solid financial health [1] Revenue Performance - The Sports division saw a significant boost from the expanded College Football Playoff and an additional NFL game, leading to a 29% increase in domestic ad revenue [2] - Revenue from Domestic Parks and Experiences increased by 13%, while Consumer Products revenue climbed by 14% [3] Streaming Growth - Direct-to-consumer operating profit in streaming rose by $289 million to $336 million, marking a positive trend after a challenging five-year rollout of Disney+ [3] - Disney+ subscribers reached 126 million, an increase of 1.4 million from the previous quarter, while the Disney+-Hulu bundle grew by 2.5 million to 180.7 million [4] Future Outlook - CEO Bob Iger expressed optimism about the company's growth trajectory, highlighting upcoming theatrical releases, the launch of ESPN's new direct-to-consumer offering, and numerous expansion projects in the Experiences segment [4]

FOR IMMEDIATE RELEASE Exhibit 99.1 May 7, 2025 Total segment operating income and diluted EPS excluding certain items (also referred to as adjusted EPS) are non-GAAP financial measures. The most comparable GAAP measures are income before income taxes and diluted EPS, respectively. See the discussion on pages 17 through 21 for how we define and calculate these measures and a quantitative reconciliation thereof to the most directly comparable GAAP measures. (1) "Our outstanding performance this quarter—with a ...

Core Insights - The earnings season is currently very active, with decent overall performance, but recent tariff discussions have led to downward revisions in earnings expectations for Q2 and future periods [1] - Disney is set to report earnings this week, with a focus on its streaming performance in light of Netflix's recent strong results [2] Company Performance - Netflix has shown impressive results, with a 90% stock increase over the past year and reaffirmation of FY25 guidance, which has positively impacted investor sentiment [3] - Netflix has maintained subscriber growth, reporting only one quarter of negative growth in the last 12 quarters, and the introduction of ad-supported tiers has been successful despite initial consumer resistance [4] - A crackdown on password sharing has also proven beneficial for Netflix, allowing the company to capture revenue from previously unmonetized viewers [5] Disney Outlook - Analysts have a bearish outlook for Disney's upcoming quarter, with the Zacks Consensus EPS estimate at $1.18, reflecting a 3% decline since February and a projected 3% year-over-year pullback, while sales are expected to grow by 5% to $23.1 billion [6][8] - Disney's subscriber growth is slower compared to Netflix, with 174 million total subscriptions and 120 million paid Disney+ Core subscribers, marking an increase of 4.4 million from the previous quarter [10] - The overall sentiment for Disney remains negative, with a Zacks Rank of 4 (Sell) indicating widespread negative revisions [11][13]

Group 1 - The focus is on long-term growth and dividend growth investing, emphasizing the importance of profitability over low valuation [1] - The analysis includes a thorough examination of margins, free cash flow stability and growth, and returns on invested capital [1] - The approach involves researching stocks within specific areas of competence, with a preference for high-quality companies that warrant deeper investigation [1]

Core Viewpoint - President Trump has allowed government agencies to impose a 100% levy on movies made outside the U.S., significantly increasing costs for entertainment companies, leading to a decline in shares of Netflix, Disney, and Warner Bros Discovery [1] Company Summaries - **Netflix Inc (NFLX)**: Shares are down 2% to $1,132.96, ending an 11-day winning streak that peaked at $1,159.44 on May 2. The stock has a 95.1% year-over-year increase but is facing pressure after breaking above the $1,000 level [2] - **Walt Disney Co (DIS)**: Shares are down 0.3% to $92.19, extending a 17.3% year-to-date deficit. The stock is on track for its third loss in four sessions and remains below $96 since a bear gap last month, which pushed it to a 52-week low of $80.10 on April 7 [3] - **Warner Bros Discovery Inc (WBD)**: Shares are down 1% to $8.46, struggling with resistance at the $9 level. The stock has only slightly recovered from April lows and has already decreased by 20.3% in 2025 [3] Options Activity - There is significant put volume for NFLX and WBD, with NFLX's most active contract being the weekly 5/9 1,100-strike put, while WBD's is the weekly 5/9 9-strike call, indicating new positions being opened for both [4]

Core Viewpoint - The Walt Disney Company is expected to report second-quarter fiscal 2025 results on May 7, with revenue estimates at $23.14 billion, reflecting a 4.78% year-over-year growth, while earnings per share (EPS) are projected to decline by 2.48% to $1.18 [1][2]. Financial Performance - The consensus estimate for the current quarter's EPS has decreased by a penny over the past 30 days, indicating a downward trend [2]. - In the last reported quarter, Disney achieved an earnings surprise of 22.22%, with an average surprise of 12.67% over the last four quarters [2]. Earnings Expectations - Current estimates show an Earnings ESP of -1.48% and a Zacks Rank of 4 (Sell), suggesting a low probability of an earnings beat this time [3]. - Management anticipates high-single digit adjusted EPS growth for fiscal 2025 compared to fiscal 2024, contingent on successful execution across various fronts [13]. Segment Performance - The Entertainment segment reported strong performance in the fiscal first quarter, generating $1.7 billion in operating income, a 95% increase year-over-year, but faces challenges in sustaining this momentum [5]. - The Experiences segment, including theme parks and cruise lines, is expected to incur over $40 million in pre-opening expenses for Disney Cruise Line, with total expenses projected to exceed $200 million for the fiscal year [7][8]. - The streaming services, particularly Disney+, are experiencing uncertainty with expected subscriber declines compared to the fiscal first quarter [9]. Strategic Developments - Disney's recent ventures into original programming for Disney+ and the acquisition of a 70% stake in Fubo introduce both strategic opportunities and execution risks, with regulatory approvals required for the Fubo transaction [10][11]. - The combination of Hulu+ Live TV assets with fuboTV adds complexity to integration efforts [10]. Valuation and Market Position - Disney shares have declined 16.9% year-to-date, underperforming the broader Zacks Consumer Discretionary sector [14]. - The company is trading at a forward 12-month P/S ratio of 1.72X, higher than the industry average of 1.39X, indicating a stretched valuation [16]. - Disney's debt stands at $45.3 billion, contrasting unfavorably with its cash and cash equivalents of $6 billion [16]. Investment Considerations - The premium valuation of Disney appears increasingly difficult to justify given the anticipated headwinds in the Sports segment, Cruise Line expenses, and subscriber challenges in streaming [19][20]. - Investors may consider reducing exposure to the stock ahead of the fiscal second-quarter results to mitigate potential risks associated with operational pressures [22].

Core Insights - The summer box office has been revitalized by Disney and Marvel's "Thunderbolts," which earned an estimated $76 million domestically during its opening weekend, marking the third highest debut of 2025 [1] - The film's global earnings, including international ticket sales, reached approximately $162.1 million [1] - Analysts suggest that May is on track to become one of the best months on record for box office performance [1] Group 1 - Last year's summer box office faced challenges, with Universal's "The Fall Guy" only generating $28 million in its opening weekend, marking the first year since 2009 without a Marvel film to kick off the season [2] - Marvel films have struggled to match the success of "Avengers: Endgame" from 2019, with mixed performances in recent releases such as "The Marvels" and "Captain America: Brave New World," while "Deadpool & Wolverine" exceeded expectations [3][4] - "Thunderbolts" has received positive reviews, holding an 88% "Fresh" rating on Rotten Tomatoes from 257 reviews and a 94% audience rating, indicating strong word-of-mouth support [5] Group 2 - The opening weekend performance of "Thunderbolts" is seen as a promising start, with expectations for long-term success similar to other recent films like "A Minecraft Movie" and "Sinners," which have shown consistent audience interest [6]

Core Insights - Walt Disney's shares are underperforming the market for the fourth time in five years, with a critical financial update and two major movie releases expected in May [1] Financial Performance - Disney is set to announce its fiscal second-quarter results on May 7, with analysts projecting a revenue increase of nearly 5% to $23.1 billion and a profit of $1.21 per share, unchanged from the previous year [3] - Despite challenges, Disney has exceeded analyst profit targets over the past year, and continued growth in Disney+ could lead to a positive surprise in earnings [5] Theme Park Developments - Disneyland is celebrating its 70th anniversary starting May 16, with events and attractions planned through summer 2026 [7][8] - Comcast is opening Epic Universe on May 22, the first major theme park in the U.S. since 1999, which may impact Disney World [9][10] - Disney is introducing new attractions at its parks shortly after the opening of Epic Universe to attract visitors [13][14] Movie Releases - Disney has two significant movie releases in May: Thunderbots, which has started strong, and a live-action adaptation of Lilo & Stitch on May 23, expected to perform well [11][12]