Walt Disney (NYSE:DIS) executives struck an upbeat tone on the company’s first quarter fiscal 2026 earnings call, pointing to momentum across the film slate, streaming initiatives, sports distribution, and theme park expansion. CEO Bob Iger and CFO Hugh Johnston also addressed investor questions about subscriber disclosure changes, bundled offerings, new AI-driven content initiatives, and the outlook for Disney’s earnings mix between its entertainment and experiences businesses.
Film and franchise performance drove broader engagement
Iger opened by highlighting Disney’s calendar 2025 theatrical performance, saying the company’s film studios generated more than $6.5 billion at the global box office, marking Disney’s third-biggest year ever and its ninth year as the global box office leader over the last decade. He said Avatar: Fire and Ash crossed $1 billion worldwide, alongside Zootopia 2 and Lilo & Stitch, which he described as three “$1 billion titles” in 2025.
Executives repeatedly emphasized what Iger called the “interconnected” value of Disney’s intellectual property. He cited film success lifting Disney+ engagement and supporting demand in parks and consumer products, including in China, where he said Zootopia 2 became the highest-grossing foreign film of all time. He also pointed to Shanghai Disneyland’s Zootopia theme land as a major draw.
Looking ahead, Iger pointed to a theatrical slate that includes The Devil Wears Prada 2, The Mandalorian and Grogu, Toy Story 5, the live-action Moana, and Avengers: Doomsday. Johnston later said the back half of the year is expected to benefit from that slate and its downstream impact on consumer products and parks.
Streaming: bundle-led growth, profitability focus, and a unified app
Disney executives said the company is continuing to improve performance in streaming while investing in technology and international content. In response to a question about subscription growth, Johnston said subscription revenue increased 13% and attributed the growth to three factors: pricing, both North American and international growth, and bundling, citing the Duo, Trio, and Max bundles as contributors to engagement and revenue realization.
On profitability, Johnston compared the current trajectory to prior losses, noting that streaming had previously lost roughly $1 billion per quarter. He said the company achieved a 5% margin last year and has guidance to reach a 10% margin this year. For the quarter, he said Disney delivered 12% streaming revenue growth and “a little over 50% earnings growth,” which he framed as evidence of operating leverage even as the company invests.
Iger also discussed product changes. He said Disney is rolling out enhancements on Disney+ and building “new vertical and short-form experiences.” He told analysts that early results from the integrated Disney+ and Hulu experience have reduced churn, and he said bundled subscribers with ESPN also churn less. Iger said Disney is “hard at work” on a one-app experience combining Disney+ and Hulu, while still allowing customers to buy either service separately, and he estimated a fully integrated experience could arrive “sometime at the end of the calendar year.”
Disney also addressed why it changed its entertainment segment disclosure. Johnston said the company manages entertainment “as a single entity,” and separating linear networks, streaming, and theatrical created complexity that isn’t reflective of how Disney creates and distributes content. He characterized the shift from networks to streaming as consumers moving across distribution channels, making the older breakdown “not terribly informative” for investors.
Sports: ESPN Unlimited, NFL Network deal, and ratings momentum
Iger said Disney took “a major step forward” with the launch of ESPN Unlimited and described early adoption and engagement as encouraging. He also highlighted ratings performance, including ESPN’s most-watched college football regular season since 2011, ABC’s best college football season since 2006, Monday Night Football’s second-highest viewership in 20 years, and ESPN’s third most-watched NBA regular season ever season-to-date.
During Q&A, Iger confirmed Disney closed its transaction with the NFL to acquire NFL Network and other media assets, including linear rights to RedZone. He said closing sooner than anticipated enables Disney to get started earlier and framed the upcoming NFL season—ending in ESPN’s first Super Bowl—as a “huge opportunity,” particularly for ESPN’s streaming business. He declined to speculate on longer-term NFL relationship questions, noting only that the NFL has an opt-out in the current agreement in 2030.
Experiences: revenue milestone, expansion pipeline, cruises, and demand signals
Disney’s experiences segment posted what Iger called a “solid start” to the fiscal year, including quarterly revenue exceeding $10 billion for the first time. He said Disney has expansion projects underway at every theme park and previewed the opening of World of Frozen at the reimagined Disney Adventure World at Disneyland Paris, which he said will nearly double the size of the resort’s second park.
On cruise operations, Iger said Disney Cruise Line recently launched the Disney Destiny and is preparing to launch the Disney Adventure next month, describing it as the company’s first ship home-ported in Asia.
In response to questions about domestic park performance and demand, Johnston said Walt Disney World had a “very good quarter”, benefiting from the overlap of a hurricane but also showing strong attendance and pricing performance. He added that full-year bookings are up 5%, weighted more toward the back half of the year.
Johnston also noted Disney has “a bit less visibility” into international visitation because international visitors tend to stay in Disney hotels less. He said Disney used other indicators and pivoted marketing and promotions toward a more domestic audience to keep attendance high.
AI and short-form: OpenAI/Sora deal and Disney+ curation plans
Iger provided new details on Disney’s agreement with OpenAI, describing it as a three-year license that allows users to prompt Sora to create 30-second videos featuring about 250 Disney characters, without a human voice or face. He said Disney is being paid for the agreement and that the company will be able to use Sora-created videos in curated form on Disney+.
Iger said the initiative supports Disney’s broader effort to incorporate short-form and user-generated-style experiences into Disney+, citing growth of such content on platforms like YouTube. He said the company also hopes to enable Disney+ subscribers to create short-form videos on the platform through Sora. While he did not provide a specific date for rollout, Iger said it would likely arrive sometime in fiscal 2026 and that Disney is “sticking to the 30-second limit” for now. He also said he does not expect the Sora initiative to impact demand for other programming.
Asked about capital allocation and the company’s future profit drivers, Iger said he remains “very, very bullish” on experiences due to IP-driven returns and the breadth of projects underway, while also arguing that Disney’s entertainment businesses are on a brighter trajectory given improvements in streaming and the movie pipeline. He described a “healthy competition” between experiences and entertainment over which will be the company’s leading profitability driver over time.
About Walt Disney (NYSE:DIS)
The Walt Disney Company (NYSE: DIS), commonly known as Disney, is a diversified global entertainment and media conglomerate headquartered in Burbank, California. Founded in 1923 by Walt and Roy O. Disney, the company grew from an animation studio into a multi‑national entertainment enterprise known for iconic intellectual property and family‑oriented storytelling. Disney’s operations span film and television production, streaming services, theme parks and resorts, consumer products, and live entertainment.
On the content side, Disney produces and distributes feature films and television programming through a portfolio of studios and labels that includes Walt Disney Pictures, Pixar, Marvel Studios, Lucasfilm and 20th Century Studios, along with broadcast and cable networks such as ABC, FX and National Geographic.
