Disney's Q1 FY25 Earnings: What to Expect Before the Bell

As Disney prepares to report its fiscal first-quarter earnings before the bell on Wednesday, investors and analysts are eagerly awaiting the company's performance, particularly in its streaming and theme parks businesses. Here's what to expect from Disney's Q1 FY25 earnings report, based on the provided background information and expert opinions.

Streaming Business: Subscriber Growth and Profitability

Disney's streaming business, consisting of Disney+, Hulu, and ESPN+, has been a key focus for analysts and investors. In the fiscal fourth quarter of 2024, Disney reported an operating income of $321 million for its combined streaming business, a significant improvement from a loss of $387 million during the same period last year (Disney's Q4 2024 Earnings Report). Analysts from Citi and UBS expect streaming profitability to improve in Q1 2025 and beyond, with Disney's streaming business expected to exit the red by the end of 2025.



Disney's subscriber growth has been steady, with Disney+ Core subscribers surpassing 120 million paid subscribers in Q4 2024. However, the company is expected to report a modest decline in Disney+ Core subscribers during the fiscal first quarter of 2025 compared to the prior quarter (Disney's Q4 2024 Earnings Report). Despite this expected decline, Disney anticipates a double-digit percentage increase in full-year profit for its entertainment streaming business, excluding ESPN+, and double-digit percentage growth in fiscal 2026.

Theme Parks Business: Attendance, Guest Spending, and Strategic Initiatives

Disney's theme parks business has been driven by strong attendance and guest spending, with the domestic parks' operating income rising 5% to $847 million in the fiscal fourth quarter of 2024 (Disney's fiscal fourth-quarter earnings report). The company's experiences segment, which includes theme parks and consumer products, saw revenue grow 1% to $8.24 billion during the same period.

Recent investments and strategic initiatives, such as the expansion of Disney Cruise Line and the enhancement of the guest experience through technology and digital offerings, have contributed to the growth in the experiences segment. Disney expects a 6% to 8% profit growth in the coming fiscal year for the experiences segment, despite a $130 million hit due to the impact of Hurricanes Helene and Milton, as well as a $90 million impact from Disney Cruise Line pre-launch costs (Disney's fiscal fourth-quarter earnings report).

Content Strategy: Blockbuster Films and Original Programming

Disney's content strategy, focusing on blockbuster films and original programming, has been a key driver of its financial success. In the fiscal fourth quarter of 2024, Disney Pixar's "Inside Out 2" became the highest-grossing animated movie of all time, while "Deadpool & Wolverine" became the highest-grossing R-rated film of all time. These films added $316 million of profit for the entertainment segment during the quarter, contributing to a 14% year-over-year increase in revenue for the segment to $10.83 billion (Disney's Q4 2024 Earnings Report).

Looking ahead, Disney anticipates double-digit percentage growth in its entertainment segment for fiscal 2025, driven by its streaming business and strong content offerings. The company expects high-single-digit adjusted earnings growth compared to the prior fiscal year.

In conclusion, investors and analysts will be closely watching Disney's Q1 FY25 earnings report, focusing on the performance of its streaming and theme parks businesses, as well as its content strategy. With strong subscriber growth, improved profitability, and strategic initiatives driving its theme parks business, Disney is well-positioned to continue its financial success in the coming quarters.