Earnings Call Insights: The Walt Disney Company (DIS) Q1 2026
Management View
- CEO Robert Iger opened by stating, “We are pleased with the start of our fiscal year, and our achievements reflect the tremendous progress we’ve made.” Iger highlighted the Entertainment segment’s film studios, which generated more than $6.5 billion at the global box office in 2025, calling it “our third biggest year ever and our ninth year as #1 at the global box office over the past decade.”
- Iger noted the success of “Avatar: Fire and Ash,” “Zootopia 2,” and “Lilo & Stitch,” each surpassing $1 billion in global box office, with “Zootopia 2” earning more than $1.7 billion and setting a record as “Hollywood’s highest grossing animated film ever and one of the top 10 highest grossing films of all time.”
- Iger described the positive impact of film hits on other business units: “Great storytelling generates value across our interconnected businesses with hits like Zootopia 2 lifting viewership of related titles on Disney+ and fueling global interest in our parks and consumer products.”
- The company is advancing in streaming through “encouraging results from our investment in local content,” tech improvements to Disney+, and product enhancements, including “a curated slate of Sora-generated content on Disney+ following our recently announced licensing agreement with OpenAI.”
- ESPN Unlimited was launched, with Iger reporting “outstanding ratings across our portfolio of live sports” and the closure of the NFL Network transaction, adding “the linear rights to the league’s popular RedZone channel, further bolstering ESPN’s offering.”
- The Experiences segment achieved “quarterly revenue exceeding $10 billion for the first time” with park expansions and new cruise ships, such as Disney Destiny and the upcoming Disney Adventure, which will be homeported in Asia.
- CFO Hugh Johnston stated, “Walt Disney World had a very good quarter, obviously, benefited from the overlap of the hurricane. But in addition to that, saw strong attendance performance as well as strong pricing performance.”
Outlook
- Management indicated that 2026 guidance for adjusted EPS growth remains unchanged, with Iger previously stating, “For fiscal 2026, we expect to deliver double digit adjusted EPS growth compared to the prior year.”
- Johnston stated, “Bookings are up 5% for the full year, weighted more toward the back half. So certainly, trending very positively in that regard.”
- There was no update or change to 2027 EPS growth guidance, as Johnston remarked, “You should assume that we’re not changing any of that, or we would have an update. So no change there.”
- The company is focused on driving double-digit margins in streaming, with Johnston noting, “Recall last year, we got it to a 5% margin, and we stated we have a goal this year and guidance this year to achieve a 10% margin.”
Financial Results
- Disney’s film studios delivered more than $6.5 billion at the global box office in calendar 2025, which was described as the third highest in company history.
- The Experiences segment surpassed $10 billion in quarterly revenue for the first time.
- Streaming delivered “12% revenue growth and about a little over 50% earnings growth” in the quarter, according to Johnston, reflecting strong operating leverage.
- SVOD subscription revenue grew 13%, driven by “pricing,” “both North America and international growth,” and “bundling the duo, the trio and the Max bundle,” according to Johnston.
Q&A
- Robert Fishman, MoffettNathanson: Asked about monetizing Disney’s premium IP and the value ascribed to Warner Bros. and HBO assets. Iger responded that “the battle for control of Warner Bros. Discovery…should emphasize, or cause investors to appreciate the tremendous value of our assets, particularly our IP…We have a great hand as I look across, for instance, what our Experiences business is currently building.”
- Steven Cahall, Wells Fargo: Inquired about domestic park trends and bookings. Johnston reported, “Walt Disney World had a very good quarter…bookings are up 5% for the full year, weighted more toward the back half.”
- Jessica Reif Cohen, BofA: Asked about succession and NFL deal implications. Iger remarked, “The good news is that the company is in much better shape today than it was 3 years ago because we have done a lot of fixing. But we’ve also put in place a number of opportunities.”
- Thomas Yeh, Morgan Stanley: Sought updates on bundle initiatives and Hulu integration. Iger said, “We’ve made huge progress turning the streaming business into a profitable business…the integrated experience that we’ve already offered with Disney+ and Hulu has resulted in a reduction in churn.”
- David Karnovsky, JPMorgan: Asked about the OpenAI Sora agreement. Iger explained, “What the deal actually covers is a license agreement…to enable people to prompt Sora to create 30-second videos of about 250 of our characters…We will have the ability to use those videos…in a curated form on Disney+.”
Sentiment Analysis
- Analysts’ tone was neutral to mildly positive, focusing on growth in streaming, park attendance, and monetization of IP, with questions emphasizing strategy, segment performance, and future guidance.
- Management maintained a confident and optimistic tone, highlighting achievements across segments and emphasizing strategic investments. Iger used phrases such as “I’m incredibly proud of all that we’ve accomplished” and “I’m confident that both have that ability, meaning both have the ability to grow nicely into the future.” Johnston consistently referenced strong growth and positive booking trends.
- Compared to the previous quarter, both analysts and management maintained a constructive and focused tone, with less emphasis on challenges and more on sustained growth and operational improvements.
Quarter-over-Quarter Comparison
- The current quarter emphasized a strong box office performance, successful streaming margin expansion, and new product innovations, such as Sora-generated content, compared to last quarter’s focus on technology rollouts and unified app initiatives.
- Guidance for double-digit adjusted EPS growth in 2026 is reiterated, with no change in 2027 guidance language.
- Management’s confidence remains high, and analysts continued to probe for details on growth drivers and strategic shifts, but with less skepticism than in prior quarters.
- Key metrics such as Experiences revenue and streaming margins showed explicit improvement over the previous quarter.
Risks and Concerns
- Management acknowledged ongoing execution risks, competitive pressures, and the challenge of continuing to evolve the business, but expressed confidence in mitigation through strategic investments and organizational changes.
- Iger stated, “It can’t just be about fixing. It has to be about preparing a company for its future and really putting place — taking steps to create opportunities for growth.”
- Johnston discussed the balance between investing in international content and driving operating leverage, with a continued focus on margin expansion.
Final Takeaway
Disney management highlighted a strong start to fiscal 2026, underpinned by major box office successes, record revenue in Experiences, and significant progress in streaming profitability and product enhancement. The company continues to invest in both its content pipeline and park expansions, while maintaining a strategic focus on double-digit EPS growth and improved streaming margins, positioning itself for sustained growth and shareholder value creation in the coming years.