Disney’s first earnings with Josh D’Amaro as CEO are out — and he has generally good news to report in his Wall Street debut.
The Mouse House pulled in revenue of $25.17 billion, up 7%, for the three months ended March 28 (Disney’s Q2 of fiscal 2026). Net income fell 31% to $2.25 billion largely on a higher tax bill, translating to adjusted earnings per share of $1.57 (up 8%). That topped analysts consensus estimates for revenue of $24.85 billion and adjusted earnings per share of $1.50.
Revenue from Disney+ and Hulu accelerated in the period, up 13% to $5.49 billion, and operating income soared 88% to $582 million. Those results were driven by price hikes implemented in the fall of 2025. It was the first quarter the entertainment streaming business had an operating margin that broke the double-digit barrier — hitting 10.6% — and Disney said it remains on track to achieve at least 10% for the full fiscal year 2026. (Disney no longer reports subscriber numbers for the services.)
D’Amaro, formerly head of Disney’s theme parks division, took the helm of Disney on March 18, as Bob Iger stepped down from the role after two separate stints as CEO. So far, D’Amaro has not deviated from the strategic direction established under Iger’s tenure.
“At an important moment of change for Disney, we remain focused on executing our long-term growth strategy,” D’Amaro and CFO Hugh Johnston, wrote in a letter to shareholders. “Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year.”
The execs referred to Disney’s layoffs of 1,000 employees last month, saying that “we recently restructured our marketing efforts across the company to become more effective and efficient in our marketing spend.”
Disney provided another upbeat outlook: For the June 2026 quarter, Disney expects total segment operating income of approximately $5.3 billion, which would be up 16% year over year. The company forecast fiscal 2026 adjusted EPS growth of approximately 12% (excluding the impact of the 53rd week in the fiscal year, which is expected to contribute 4% of adjusted EPS).
Meanwhile, Disney said it is targeting at least $8 billion in share repurchases in fiscal 2026, which ends in September.
On the movie front, the execs called out upcoming theatrical releases “The Mandalorian & Grogu,” “Toy Story 5,” and the live-action “Moana.” Such franchise films “strengthen our most strategic asset — our intellectual property — and help fuel our streaming, consumer products, experiences and games businesses over years and generations,” D’Amaro and Johnston said.
The arrival of blockbuster animated movie “Zootopia 2” on Disney+ in March “is a perfect example of how, when our stories resonate, they generate value across our distribution platforms,” the execs said. In addition to raking in $1.9 billion in global box office revenue, the two Zootopia movies surpassed 1 billion hours streamed on Disney+. Moreover, they said, “fans engage with Zootopia’s characters and stories at our theme parks, on our cruise ships, and at retail.”
Other streaming highlights in the quarter included the debuts of “Predator: Badlands,” Disney+’s “Hannah Montana 20th Anniversary,” Hulu’s “Paradise” Season 2, and FX’s “Love Story: John F. Kennedy Jr. and Carolyn Bessette.” Upcoming streaming premieres include “Avatar: Fire and Ash” and Pixar’s “Hoppers,” as well as the fifth and final season of “The Bear” on Disney+ and Hulu.
Disney’s entertainment segment got a boost from Fubo in the quarter. Last fall, the company closed a deal to acquire a 70% stake in live TV streaming platform Fubo, which it combined with the Hulu live TV business. The addition of Fubo contributed a 4% lift in Disney’s entertainment segment revenue while also increasing expenses 4%.
Excluding ad revenue from Disney+ and Hulu, entertainment segment advertising revenue was down 2% year over year.
ESPN revenue for the quarter was up 6%, to $4.61 billion, while operating income declined 5% to $652 million. Ad sales declined 2%, due in part to fewer NBA games. The higher overall revenue came from an increase in subscription and affiliate fees due partially offset by fewer subscribers. Disney’s deal with the NFL giving the league a 10% ownership stake in ESPN, valued at $3 billion, contributed 3% toward the sports segment’s revenue growth in the period.
For the June quarter, the company expects ESPN operating income to decline by 14% driven by a double-digit percentage increase in programming expenses, including the timing of new rights agreements.
Disney Experiences, which houses theme parks, cruises and consumer products, saw March quarter revenue of $9.5 billion (up 7%) and operating income of $2.6 billion (up 5%) — both fiscal Q2 records. “Current demand at our domestic parks and resorts is healthy,” D’Amaro and Johnston said. “However, we are mindful of the macroeconomic uncertainty consumers are facing today.”
Attendance at Disney domestic parks declined 1% during the first three months of the year, partly reflecting “continued softness in international visitation.” The company expects year-over-year attendance at domestic parks in the June quarter to improve compared with that decline.
In their shareholder letter, D’Amaro and Johnston called out the importance of gaming to Disney’s overall strategy to reach younger consumers, saying that “our collaboration with Epic Games is central to our efforts in this space.” Disney characters are “among the most popular across the Fortnite universe,” the execs said, noting that “The Simpsons” on Fortnite, launched last November, saw 780 million hours played by more than 80 million unique players.
The execs also touched on OpenAI’s abrupt shutdown of Sora, and that “as a result we will not proceed with our previously planned investment in the company.” Disney had planned to invest $1 billion in the AI company. Under their original agreement, users were going to be able use Sora to create their own AI animations of more than 200 Disney characters.
Disney continues “to explore potential commercial opportunities with OpenAI and others,” D’Amaro and Johnston said.
“We view advanced technologies, including AI, as a meaningful long-term opportunity,” they wrote. “We see opportunities for AI to play a role across five areas of our business: content creation and production, monetization, workforce productivity, guest and consumer experiences, and enterprise operations. At the same time, we are committed to implementing AI in a way that keeps human creativity at the center of everything we do and respects creators and the value of our intellectual property.”
variety.com
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