The Walt Disney Company (DIS) Q1 2026 earnings summary

Executive summary

• Revenue increased 5% year-over-year to $26.0 billion, driven by growth in Experiences, Entertainment, and the Fubo acquisition, while net income declined 6% to $2.4 billion due to lower Entertainment operating income and a higher effective tax rate.

• Achieved strong start to fiscal 2026, with significant progress across entertainment, streaming, sports, and experiences segments, including major releases like Zootopia 2 and Avatar: Fire and Ash.

• Diluted EPS fell to $1.34 from $1.40 in the prior-year quarter; adjusted EPS dropped 7% to $1.63.

• Key one-time items included a $307 million non-cash tax charge from the Fubo transaction and $300 million in acquisition amortization.

• Streaming business showed profitability improvements, driven by content strength, technology enhancements, and successful bundling strategies.

Financial highlights

• Service revenues rose 5% to $23.2 billion, with Fubo contributing a 1 percentage point increase.

• Experiences segment achieved record revenue of $10.0 billion and 6% operating income growth, with domestic parks operating income up 8%.

• Entertainment revenue up 7% year-over-year, but operating income declined 35% due to higher costs and lower theatrical distribution results.

• SVOD revenue increased 11% and operating income rose 72% to $450 million, with margins improving to 8.4%.

• Cash provided by operations dropped to $735 million from $3.2 billion, mainly due to higher tax payments and increased content spending; free cash flow was negative $2.3 billion.

Outlook and guidance

• Fiscal 2026 capital expenditures are expected to be approximately $9 billion, up from $8 billion in 2025, primarily for theme park and resort expansion.

• Content spend for fiscal 2026, including sports rights, is projected at $24 billion.

• The company targets $7 billion in share repurchases for fiscal 2026 and expects double-digit adjusted EPS growth.

• Unified Disney+/Hulu app experience expected by end of calendar year, with further technology and content enhancements planned.

• Full year 2026 guidance includes $19 billion in cash from operations.