Walt Disney (NYSE:DIS) reported fiscal third-quarter results that management said exceeded its prior operating-income guidance, led by record performance at Disney Experiences and continued gains in streaming and sports. Chief Executive Officer Josh D’Amaro said total segment operating income increased 21% from the prior-year quarter while company revenue rose 7%.
“This was an excellent quarter for us,” D’Amaro said, adding that the company’s results and reiterated full-year outlook indicated it was operating “from a real position of strength.” He said Disney’s Experiences, Disney+ and ESPN platforms each expanded their respective audiences, users or guest bases during the quarter.
Experiences segment posts records
The company cited particular strength at Walt Disney World, additional capacity at Disney Cruise Line and the opening of World of Frozen at Disneyland Paris. D’Amaro said the Disney Destiny and Disney Adventure cruise ships were performing well, while forward bookings at Walt Disney World and Disney Cruise Line remained healthy.
Disney expects Experiences operating-income growth to reach the high end of its previously provided high-single-digit range for fiscal 2026, excluding the impact of the 53rd week. The company did not provide a long-term revenue or margin forecast for the segment.
Management said its recently introduced park promotions, including targeted offerings for local residents and value-oriented consumers, should not be interpreted as a sign of broader attendance weakness. D’Amaro said the promotions are intended to address specific customer segments and optimize available capacity.
“We’re certainly not discounting our way to volume growth,” he said, pointing to the increase in both attendance and per-capita spending. He acknowledged continued softness in international attendance, although he said that trend had moderated. Chief Financial Officer Hugh Johnston also cited a weaker consumer environment in Shanghai and Hong Kong during the third quarter that was continuing into the fourth quarter.
Johnston said tariffs had no meaningful full-year effect on the Experiences business. Disney received about $100 million in tariff refunds during the quarter, benefiting segment operating income but not revenue, after incurring the related costs during the first half of fiscal 2026.
Content and streaming strategy
D’Amaro emphasized Disney’s ability to extend its franchises across theatrical releases, streaming, consumer products and physical experiences. He said Toy Story 5 had surpassed $1 billion at the global box office. Across its five films, the Toy Story franchise has generated more than $4 billion in global box office receipts, more than 2 billion hours streamed on Disney+, and over $1 billion in annual global retail sales, he said.
Management also acknowledged that some recent franchise films, including The Mandalorian and Grogu and the live-action Moana, did not meet box-office expectations. D’Amaro said those properties nevertheless supported retail, park attraction and gaming engagement. He added that the live-action Moana is expected to be a strong Disney+ title.
Disney’s subscription-video-on-demand business produced a 13% operating margin in the third quarter. The company said it remains on track for double-digit SVOD margins in fiscal 2026, excluding the 53rd-week impact, while continuing to focus on expansion in under-monetized international markets.
During the quarter, Hulu standalone and bundle subscribers gained the ability to link profiles and manage subscriptions through Disney+. D’Amaro said further technology-stack and data integration work remains. By the end of the calendar year, Disney+ subscribers are expected to be able to access live television and add-ons, alongside additional product features.
The company sees Disney+ as a potential global aggregator for third-party services through bundles and add-ons. D’Amaro said the Disney+, Hulu and HBO Max bundle has shown lower churn than standalone Disney+ or Hulu subscriptions among comparable customer-tenure groups.
Disney is also exploring a free consumer offering that could reach more price-sensitive audiences, expand advertising inventory and serve as a top-of-funnel source of paid Disney+ subscribers. D’Amaro said there was nothing specific to announce.
Sports, advertising and capital allocation
Management pointed to strong sports viewership during the quarter. D’Amaro said NBA Finals and NHL postseason viewership across ESPN and ABC rose more than 100% from the previous season, contributing to ESPN’s most-viewed fiscal third quarter across ESPN, ESPN2 and ESPN on ABC since 2016.
Johnston said Disney’s advertising upfront commitments rose by double digits from a year earlier, with sports commitments up by low teens. The company has sold out its Super Bowl advertising inventory, he said. Johnston characterized the sports advertising market as healthy but described streaming advertising as competitive, with growing supply creating pricing pressure. He cited demand in healthcare, financial services and political advertising, while telecom, restaurants and consumer packaged goods showed softness.
On capital allocation, Disney plans to spend $9 billion on capital expenditures in fiscal 2026 and approximately $24 billion on content during the year. Johnston said the company increased its fiscal 2026 share-repurchase plan to at least $9 billion from prior guidance of about $7 billion, partly reflecting cash previously set aside for an OpenAI deal and expected proceeds from the announced A+E transaction.
Management reaffirmed its expectation for double-digit adjusted earnings-per-share growth in fiscal 2026 and fiscal 2027. Johnston said Experiences and streaming are currently the company’s principal growth drivers, while Disney’s diversified business helps mitigate the volatility associated with film performance.
Technology initiatives
D’Amaro said Disney is using artificial intelligence across its businesses to accelerate production workflows, improve personalization, support advertising and marketing initiatives, and streamline park and cruise planning. He said the company views AI as a tool to enhance—not replace—human-centered, artist-driven creative work.
In the studio business, D’Amaro said AI is helping speed technical production processes, expand the availability of films in 3D and premium formats, improve visual-effects workflows, and reduce rendering and denoising time. Disney is also working to unify consumer data across its businesses, which D’Amaro said should enable more personalized experiences and greater lifetime value from fan relationships.
“Technology is the connective tissue that makes all of that possible,” D’Amaro said.
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.
