The Walt Disney Company (DIS) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenues rose 5% year-over-year to $24.7 billion, with net income up 34% to $2.6 billion and diluted EPS up 35% to $1.40, driven by higher Entertainment segment operating income and strong box office, DTC, and ESPN performance.

• Adjusted EPS increased 44% to $1.76, and total segment operating income grew 31% to $5.1 billion compared to Q1 FY2024.

• Star India was deconsolidated after a joint venture with Reliance Industries, resulting in a $143 million impairment and $213 million non-cash tax charge.

• Direct-to-Consumer (DTC) segment returned to profitability, and Experiences segment maintained strong results despite mixed domestic and international park trends.

• Strategic initiatives over the past two years and ongoing community support for Southern California wildfires contributed to the quarter's success.

Financial highlights

• Operating income increased 27% year-over-year to $3.7 billion; net income attributable to Disney rose to $2.6 billion from $1.9 billion.

• Cash provided by operations was $3.2 billion, up 47% year-over-year; capital expenditures rose to $2.5 billion, mainly for cruise ship expansion.

• DTC operating profit grew by $300 million in Q1, with full-year expectations set at over $1 billion.

• Content budget trimmed to $23 billion from $24 billion, with 2025 spend projected to be comparable.

• Share repurchases totaled $0.8 billion for 7 million shares; $3 billion in repurchases targeted for fiscal 2025.

Outlook and guidance

• Experiences segment guidance remains for 6–8% growth for the year, with easier comps expected in the back half.

• DTC subscriber growth expected to accelerate in the second half of the year, driven by new content and paid sharing initiatives.

• Management maintains high confidence in delivering high single-digit earnings growth for the year, despite macroeconomic uncertainties.

• FY2025 capital expenditures expected to be ~$8 billion, up from $5 billion in 2024, driven by Experiences investments.

• Q2 guidance: modest Disney+ subscriber decline, $100 million Sports headwind from college sports/NFL, $40 million Disney Cruise Line pre-opening expense.