If you want to read The Walt Disney Company’s Q3 earnings report
The Walt Disney Company reported its earnings for the third quarter. Earnings per share were $1.61 per share compared to $1.47 that was expected. Disney’s revenue came in at $23.65 billion compared to the $23.73 billion that was expected.
Disney+ and Hulu have a combined 183 million subscribers, an increase of 2.6 million versus Q2 fiscal 2025. Disney+ gained 1.8 million subscribers, bringing its total to $128 million.
This earnings call was a doozy, and there were a lot of deals being announced. Amidst all the deals, Disney announced that Hulu will be officially folded into Disney+ starting in 2026. Disney promised that this unified app experience will feature branded and general entertainment, news, and sports.
Disney CEO Bob Iger also noted that the new app will be on the same tech stack and that they are rapidly trying to improve Disney+’s tech. The move marks the end of an era for Hulu. However, it will now fulfill the promise of Disney+ becoming a more robust app.
One of the more illuminating stats to come out of this earnings call is the fact that Lilo & Stitch is on track to become Disney’s second-largest licensed merchandise franchise this year behind only Mickey Mouse. That’s more than 70% revenue growth compared to last year. Disney is also deploying Stitch across its experiences division, and a sequel to the live-action Lilo & Stitch is already in development. Stitch was already a consumer products cornerstone, but he’s now reached the upper echelons of Disney, and this year is only number two to the mouse who started it all.
Now there were two major deals that were announced before the earnings call, and both involved ESPN.
ESPN’s direct-to-consumer streaming service will become the exclusive U.S. domestic home of all WWE Premium Live Events (PLEs), including WrestleMania, SummerSlam, Royal Rumble, Survivor Series, Money in the Bank, and more, starting in 2026. This move seemingly feels a little out of nowhere, but it’s a big swing from ESPN. Essentially, ESPN has captured the WWE PLE rights from a competitor in NBCUniversal’s Peacock and kept the rights away from their other rival in Netflix. ESPN will be paying WWE an annual fee of $325 million a year. In total, it will be a five-year, $1.6 billion deal. Iger revealed that they are excited to share more details about the WWE deal soon.
Then, the bigger and more complex ESPN deal is the fact that they acquired NFL Network and other NFL media assets, in exchange for 10% equity. The NFL owning a piece of ESPN was once thought of as a “pipe dream.” But once again, it seems like Bob Iger and Jimmy Pitaro got what they wanted. ESPN now gets a partner in the most popular sports league in the United States. The deal also includes access to fan-favorite NFL RedZone. ESPN will own the linear rights to NFL RedZone, but the NFL retained the digital rights and will still produce the show. The deal is complex and has many layers. CFO Hugh Johnston did say the deal may not be completed until the end of next year.
Iger also hinted in the Q&A portion that ESPN is open to streaming sports right from its competitors. Iger even said there have been conversations regarding it. I could see Disney’s former Venu buddies Warner Bros. and Fox licensing their sports content to Disney’s ESPN streamer. I could see Fox’s programming ending up on the ESPN streamer due to how the companies have been linked ever since the 21st Century Fox acquisition.
Yet it’s clear that, as Bob Iger promised many moons ago that Disney is now back in its building phase within all of its divisions, from streaming to the parks to ESPN.
Disney Experiences
Disney Experiences revenue increased 8% to $9.09 billion. Domestic theme park revenue was up 10% to $6.4 billion.
International parks and experiences revenue was up 6% to about $1.7 billion.
Disney expects its experience segment to see operating income growth of 8% during fiscal 2025.
Disney Streaming
Domestic Disney+ ARPU increased from $8.06 to $8.09 as higher advertising revenue was largely offset by the impact of subscriber mix shifts.
International Disney+ ARPU increased from $7.52 to $7.67 due to a favorable foreign exchange impact and increases in pricing, partially offset by the impact of subscriber mix shifts.
Pour one out for this section, as soon Disney will no longer disclose subscriber numbers or ARPU. The move will take place during Q1 2026.
Final Thoughts
The future of streaming at Disney is rapidly changing. Disney+ and Hulu consolidating under one tech stack means that the Disney Bundle will likely pivot into something like “Disney+ & ESPN.” Iger hinted at the potential new bundle being better than what they even had before, as it would have “Disney-branded programming with the general entertainment programming, bundled with the ESPN direct-to-consumer application.” I think at some point Disney has to make the move and relegate Hulu to a brand tile and name for non-Disney and more adult-oriented content. Also, the pricing for these streaming services is only going to go up from here. I wouldn’t be shocked if Disney announces some price increases for Disney+ during Q4.
Disney also revealed that over the coming months, there will be various improvements within the Disney+ app. There have been rumors of new features, such as clips, so subscribers can share certain clips on social media. There are some rumblings for more robust features as well. However, today, Disney CEO Bob Iger heavily hinted at a stronger recommendation system and a more personalized homepage. I honestly think the tech improvements to Disney+ are flying under the radar. The new Streams feature has been a lot of fun to use, and I hope they expand it even more.
Bob and Hugh also had a great take on the linear business during today’s call. Disney just thinks of it as the television business, and they just meet their customers where they are. Disney has been utilizing its programming across linear and streaming. A great example was Daredevil: Born Again, airing on FX last night. Wall Street is way too hung up on linear, and it’s clear Disney has operated their linear businesses better than their competitors.
Disney Cruise Line still remains a golden child within the entirety of The Walt Disney Company. Bob and Hugh were bragging about how well that division is doing. The forward bookings are doing great and Disney Cruise Line is also running at high occupancy right now. Iger even said its one of the best experiences that Disney does. He also touted the fact that Disney Cruise Line has become “a floating ambassador for the Disney brand.” Iger says the IP in the ships helps and it allows Disney to target new markets. Just like what Disney is doing with the Disney Adventure in Singapore. Disney CFO Hugh Johnston also noted that Disney Cruise Line is half booked out for all of next year and the newer ships are seeing even higher demand. Seems like there is no threat to the ambitious expansion of Disney Cruise Line.
Disney barely acknowledged Epic Universe during this call. Sure, Disney may have used language like “resiliency” and “competitive offering” but really it wasn’t as loud as in the past. Disney was feeling terrific about the attendance in light of the competition. It’s pretty incredible that Walt Disney World, with extremely light offerings, was able to fend off Epic Universe at least on paper. Walt Disney World’s 2026 slate is even better, so I don’t think Epic Universe will affect Walt Disney World’s attendance at all. The time to gain ground for Universal was in 2025 and 2026, and for Disney it looks like they cobbled enough to survive 2025, and they created a stronger slate for 2026.
Now the Q&A usually doesn’t dive into creativity, but one analyst asked Iger about original franchises versus sequels. It was one of the rare questions that cuts through the noise and gets straight to the point. Iger’s answer was very mixed. Iger reiterated that they are focused on creating new IP, as it will help Disney long-term. Iger acknowledged that Disney’s catalog remains significant and that the opportunity to produce sequels or new live-action versions is too good to pass up. The example he used was Moana, one of the key franchises for Disney currently, as the animated film was released in 2016. Now ten years later in 2026, there will be a live-action Moana.
Iger then stated that the originals at Disney are coming from 20th Century Studios and Searchlight. “The priority is putting out great movies that ultimately resonate with consumers,” Iger said. “And the more that we can find and develop original properties, the better, of course.” There has been a lot of fan concern that Disney would pivot from originals due to box office, but that isn’t the case. Also, Iger’s tone towards 20th Century Studios sure has changed from the Avatar/Alien/Planet of the Apes days, although those are still the franchise safety nets over there.
The originals conversation even included Marvel Studios as well. Iger considers when Marvel mines its catalog as originals. To me, that’s not actually a bad outlook! For what it’s worth, the general public didn’t know a lot of these Marvel characters until the MCU popped off. Maybe this is also Iger hinting that Marvel Studios will continue to find unexpected characters and stories to adapt into the MCU. Iger also considered their Fantastic Four an “original” as it reintroduced the characters to people who were previously not familiar with them.
And on Fantastic Four, despite an onslaught of negative headlines and over-the-top box office hysteria. It seems like Disney is staying firm on its thoughts about Fantastic Four. Disney noted the rave reviews and even went as far as saying that The Fantastic Four: First Steps successfully launched “an important franchise” into the MCU.
Overall, the call had a pretty optimistic outlook for all of Disney’s divisions. There wasn’t anything slightly controversial. It was all pure business for Disney today. Iger even noted his optimism.
“Taken in totality, across the entire company, we are operating in a league of our own. With growth in businesses that work seamlessly together to generate value, supported by a deep library of beloved IP enhanced with technology. With our ambitious plans ahead for all of our businesses, we are not done building, and we remain optimistic about the company’s trajectory.”
Disney continues to be in a league of their own. Now let’s just see if Bob Iger has any Q4 surprises in store for us when it comes to earnings in November.
Lightning Round
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Zach Perilstein is the Editor-in-Chief of the Boardwalk Times
