Disney posts strong Q3 on streaming surge; eyes future after India business realignment

The Walt Disney Company reported an uptick in earnings for its fiscal third quarter on Wednesday, signaling continued momentum in streaming and theme park operations, even as traditional media businesses show signs of strain.

Revenue for the quarter ended June 28 rose 2 percent year over year to $23.7 billion, while income before taxes climbed to $3.2 billion, a 4 percent increase from the same period in 2024. Total segment operating income rose by 8 percent to $4.6 billion.

Diluted earnings per share more than doubled, reaching $2.92 compared to $1.43 a year earlier. On an adjusted basis, earnings per share rose 16 percent to $1.61.

“We are pleased with our creative success and financial performance in Q3 as we continue to execute across our strategic priorities,” said Robert A. Iger, Chief Executive Officer of The Walt Disney Company.

Disney’s Entertainment division saw mixed results. Overall segment operating income fell by $179 million to $1 billion. However, its Direct-to-Consumer business — including Disney+, Hulu, and related offerings — posted strong gains. Revenue in that unit rose 6 percent despite a 3-point drag from the prior inclusion of Disney+ Hotstar in India. Operating income surged by $365 million to reach $346 million.

Subscriber counts continued to climb. Disney+ added 1.8 million subscribers in the quarter, bringing the total to 128 million. Combined with Hulu, the company now counts 183 million subscriptions across its streaming platforms — up 2.6 million from the previous quarter.

Still, other parts of the entertainment portfolio struggled. Linear Networks saw operating income decline by $269 million, largely due to the divestiture of Star India. Content sales and licensing revenue dropped by $275 million, reflecting a weaker performance compared to the previous year’s strong showing from Inside Out 2.

The company’s Sports division posted operating income of $1 billion, up $235 million from a year earlier, largely due to the absence of a $314 million loss booked by Star India in the year-ago period. Domestic ESPN performance was less rosy, with a 7 percent decline in operating income driven by increased programming and production costs, particularly for NBA and college sports rights. Advertising revenue for ESPN in the U.S. grew 3 percent.

Disney recently announced an expanded content deal with the NFL and reaffirmed plans to launch a direct-to-consumer version of ESPN, expected to be a major strategic pivot for the sports brand.

The company’s Experiences division, which includes theme parks, cruise lines, and consumer products, continues to be a bright spot. Operating income for the segment rose to $2.5 billion, a $294 million increase over the prior year.

Domestic parks and experiences saw operating income jump 22 percent to $1.7 billion, benefiting from the timing of the Easter holiday (a ~$40 million boost) and despite ~$30 million in pre-opening costs for Disney Cruise Line. CEO Iger hinted at even more global expansions underway.

“We have more expansions underway around the world in our parks and experiences than at any other time in our history,” Iger said. “With ambitious plans ahead for all our businesses, we’re not done building, and we are excited for Disney’s future.”

For the fourth quarter, Disney expects subscriber growth of more than 10 million for Disney+ and Hulu combined, with most of that increase coming from Hulu due to an expanded distribution deal with Charter. Disney+ alone is projected to see a modest increase.

The company is forecasting adjusted earnings per share of $5.85 for fiscal 2025 — an 18 percent rise over the previous year. For the full year, it anticipates $1.3 billion in Direct-to-Consumer operating income for entertainment, 18 percent growth in sports segment income, and 8 percent growth in the Experiences division.

Pre-opening expenses for the Disney Cruise Line are expected to total around $185 million for the year, with about $50 million projected in the fourth quarter. The company also anticipates a ~$200 million equity loss from its India joint venture due to purchase accounting amortization.

As Disney prepares for major strategic transitions — including the full integration of Hulu into Disney+ — Iger emphasized that the company remains focused on long-term growth and differentiation in the streaming landscape.

“Our forthcoming integration of Hulu into Disney+ [is] creating a truly differentiated streaming proposition that harnesses the highest-caliber brands and franchises, general entertainment, family programming, news, and industry-leading sports content,” Iger said.