Disney’s September quarter revenue was roughly flat from a year ago, missing Wall Street expectations, and adjusted earnings per share fell 3%. However, subscriber growth for Disney+ and Hulu has exceeded expectations, and the company says it is on track to achieve double-digit profit growth over the next two years.
The company reported revenue of $22.46 billion for the fourth quarter of its fiscal year 2025, which ended Sept. 27, below the average analyst estimate of $22.75 billion. Adjusted earnings per share were $1.11, beating the Street by 6 cents. Operating income for the segment as a whole was $3.5 billion, down 5% from the same period last year. This was as declines in linear TV and theater businesses were offset by strong streaming performance and a strong quarter in Parks and Experiences. For the fiscal year 2025, sales were $94.43 billion (up 3%) and adjusted EPS was $5.93, up 19%.
Looking forward, Disney reiterated its previous guidance to achieve double-digit adjusted EPS growth in fiscal years 2026 and 2027. The company announced that it will double its share buyback target for next year to $7 billion compared to 2025. Disney’s board of directors also announced a cash dividend of $1.50 per share, up from $1 per share in 2025 (to be paid in January and July 2026).
“This year has been another year of great progress as we leveraged the value of our creative and brand assets to strengthen our company and continue to make meaningful progress in our direct-to-consumer business,” Disney CEO Bob Iger said in a prepared remarks. “Our strategy, combined with our portfolio of complementary businesses and strong balance sheet, allows us to continue to invest in high-quality products for consumers and increase returns for our shareholders. We are also pleased with the many accomplishments this year that position Disney for the future.”
In the September quarter, Disney+ and Hulu’s revenue rose 8% to $6.25 billion, and operating profit rose 39% to $352 million. Disney+ gained 3.8 million net subscribers and Hulu 8.6 million, largely due to an expanded distribution deal with Charter that bundles Hulu and Spectrum TV Select, as investors worried that backlash over Jimmy Kimmel’s controversial Charlie Kirk comments would cause streaming subscriptions to shrink. This is the last quarter that Disney will follow Netflix in reporting subscriber numbers.
Revenue from Disney’s domestic linear network business, which includes ABC, fell 7% to $1.86 billion. Operating income decreased 5% due to lower advertising due to lower television viewership and lower political ad spending ($40 million lower than the fourth quarter of fiscal 2024). Additionally, the decrease in advertising revenue reflects a year-over-year comparison for the 2024 Emmy Awards show aired on ABC.
Disney Entertainment Group’s Content Sales/Licensing and Other businesses’ revenue for the quarter decreased 26% to $1.9 billion, resulting in an operating loss of -$52 million (compared to operating income of $316 million in the same period last year). Disney claimed that the box office performance was poor compared to the box office performance of “Inside Head 2” and “Deadpool & Wolverine” in the same period last year. The most recent quarter includes box office revenue from the Marvel movie “Fantastic Four: First Steps,” as well as “The Roses” and “Freaky Friday,” as well as carryover revenue from the live-action “Lilo & Stitch.”
ESPN’s domestic revenue for the fourth quarter of 2025 increased 2% to $3.58 billion, but operating income decreased 3% due to higher marketing and programming costs. Domestic advertising revenue increased by 8%. Disney launched ESPN Unlimited in August, a standalone streaming service that includes all of ESPN for $29.99 a month, but the company has not provided subscriber numbers for the product.
Revenue from Disney’s Experiences division, which includes domestic and international parks, cruises and consumer products, rose 6% to $8.77 billion. Domestic Parks & Experiences operating income increased 9% to $920 million, while International Parks & Experiences operating income increased 25% to $375 million.
In the September quarter, Disney took a $450 million impairment charge on its investment in A+E Global Media, which it owns 50-50 with Hearst. This summer, Disney and Hearst used Wells Fargo as a shop for A+E, the parent company of cable networks A&E Networks, History and Lifetime.
Disney projected direct-to-consumer entertainment operating income of approximately $375 million for the first quarter of fiscal 2026 (the last three months of calendar 2025). It also predicted that political advertising revenue would decline by $140 million compared to the same period last year.
Disney said that in the December 2025 quarter, “comparisons to theatrical releases” are expected to result in a “$400 million negative impact on segment operating income compared to the first quarter of fiscal 2025.” This partly reflects an increase in theatrical releases this year, including additional titles from 20th Century Studios and Searchlight, and a comparison with the strong performance of Moana 2 and Mufasa: The Lion King in the same period last year. This quarter’s releases include 20th Century Studios’ “Predator: Badlands” and the box office disappointing “Tron: Ares.” Disney’s upcoming holiday theatrical releases include “Zootopia 2” and “Avatar: Fire and Ash.”
For the full year of 2026, Disney expects double-digit operating profit growth for its entertainment division (streaming, TV, movies) on a “second-half weighted” basis, with Disney+ and Hulu forecasting operating margins of 10%. This is driven by continued growth in streaming and recent price increases. Parks and Experiences is expected to see low-single-digit operating income growth, while ESPN said it expects low-single-digit growth, reflecting “the timing of rights costs that negatively impacted second-quarter and third-quarter year-over-year comparisons.”
Disney expects to spend $24 billion on entertainment and sports content in fiscal year 2026 (compared to approximately $23 billion in fiscal year 2025), with capital expenditures of $9 billion. The company expects cash proceeds from operations to increase 7% year over year to $19 billion in fiscal 2026. This includes the impact of $1.7 billion in taxes that Disney deferred from fiscal year 2025 to fiscal year 2026 as a result of California wildfire tax cuts.
Meanwhile, Iger is entering the final year of his contract as CEO, which runs through the end of 2026. Disney’s board said it plans to announce a replacement early next year. Earlier this week, Disney extended CFO Hugh Johnston’s employment contract through 2029.
