The Walt Disney Company (DIS) Q3 2024 earnings summary

Executive summary

• Q3 FY24 revenue rose 4% year-over-year to $23.2B, with net income of $2.6B and diluted EPS of $1.43, compared to a loss in the prior-year quarter.

• Combined streaming businesses achieved profitability for the first time, one quarter ahead of guidance, with DTC operating loss improving to $19M from $505M.

• Entertainment segment operating income nearly tripled, driven by DTC and Content Sales/Licensing, with Inside Out 2 becoming the highest-grossing animated film ever at over $1.5B.

• Experiences segment saw modest revenue growth but a 3% decline in operating income due to higher costs and softer domestic demand, though international parks and consumer products remained strong.

• Record 183 Emmy nominations and significant box office success, including Deadpool & Wolverine's $850M+ opening.

Financial highlights

• Q3 revenue rose to $23.2B from $22.3B in Q3'23, with net income up to $2.6B from a loss of $0.5B.

• Total segment operating income grew 19% to $4.2B; adjusted EPS was $1.39, up 35% year-over-year.

• DTC streaming revenue up 14% year-over-year to $18.6B for the first nine months.

• Free cash flow for nine months rose 208% to $4.5B; cash provided by operations up 67% to $8.5B.

• Quarterly service revenues rose 4% to $20.8B, led by higher DTC subscription and advertising revenue.

Outlook and guidance

• Full-year adjusted EPS growth target raised to 30%, with combined streaming businesses expected to remain profitable in Q4.

• Fiscal 2024 content spend, including sports rights, is expected to be $24B, down from $27B in fiscal 2023.

• Fiscal 2024 capital expenditures projected at $6B, up from $5B in fiscal 2023.

• Experiences segment Q4 operating income expected to decline mid-single digits year-over-year due to demand moderation and Olympic/China impacts.

• Cruise ship startup costs will more than double in 2025, but ships are expected to pay back quickly.