Advanced Television

Disney+ adds 4.4m subs in Q4

November 15, 2024

The Walt Disney Company has reported that Q4 revenues increased 6 per cent QoQ to $22.6 billion (€21.4bn), and 3 per cent for the year to $91.4 billion.

The media and entertainment giant achieved 23 per cent growth in total segment operating income for Q4 and 21 per cent for the year, and 39 per cent growth in adjusted EPS to $1.14 from $0.82 for Q4 and 32 per cent to $4.97 from $3.76 for the year.

The company’s Entertainment segment operating income improved significantly, to $1.1 billion, up $0.8 billion in Q4 versus the prior-year quarter. Entertainment DTC (which includes Disney+ and Hulu) delivered 14 per cent ad revenue growth in Q4, contributing to $253 million in operating income, and the combined DTC streaming businesses improved profitability in Q4, with operating income of $321 million.

Disney ended the quarter with 174 million Disney+ Core and Hulu subscriptions, and more than 120 million Disney+ Core paid subscribers, an increase of 4.4 million over the prior quarter.

Pixar’s Inside Out 2 and Marvel’s Deadpool & Wolverine (now streaming on Disney+) broke numerous box office records and helped drive $316 million in operating income at Content Sales/Licensing and Other in Q4.

Sports segment operating income was $0.9 billion, a decline of $0.1 billion compared to the prior-year quarter. Domestic ESPN advertising revenue in Q4 grew 7 per cent versus the prior-year quarter.

The Experiences segment had record revenue and operating income for the full year. In Q4, Experiences revenue increased $0.1 billion, or 1 per cent, and operating income of $1.7 billion was a decline of $0.1 billion, or 6 per cent compared to the prior-year quarter. Domestic Parks & Experiences operating income increased in Q4, on comparable attendance to the prior-year quarter, driven by higher guest spending, partially offset by higher expenses and costs related to new guest offerings driven by Disney Cruise Line.

Disney CEO, Bob Iger, commneted: “This was a pivotal and successful year for The Walt Disney Company, and thanks to the significant progress we’ve made, we have emerged from a period of considerable challenges and disruption well positioned for growth and optimistic about our future. Our solid performance in the fiscal fourth quarter reflected the success of our strategic efforts to improve quality, innovation, efficiency, and value creation. In Q4 we saw one of the best quarters in the history of our film studio, improved profitability in our streaming businesses, a record-breaking 60 Emmy Awards for the company, the continued power of live sports, and the unveiling of an impressive collection of new projects coming to our Experiences segment. As a result of our strategies and our focus on managing our businesses for both the near- and long-term, we are differentiating ourselves from traditional competitors, leveraging the deepest and broadest set of entertainment assets in the industry to drive attractive returns and further advance our goals.”

Kate Leaman, chief market analyst at AvaTrade, reacting to the results, commented: “Disney’s latest earnings report did not disappoint – you could say that the entertainment and experiences giant brought the magic back. That’s because it delivered exactly what investors were hoping for – a clear sign that Disney’s strategy is in fact working. The biggest buzz is around the company’s streaming success. Disney’s direct-to-consumer streaming divisions, which includes Disney+, Hulu, and ESPN+, turned an operating profit of $253 million, blowing past the expected $131 million. This is a major turnaround for a segment that has struggled in the past and a positive signal for its growth trajectory, with profitability projected to triple in 2025.”

“At the box office, Disney also delivered strong results with hits like Deadpool & Wolverine, which earned $1.3 billion globally, and Inside Out 2. These successes, combined with a record-breaking 60 Emmy wins, reinforce the firm’s ability to lead in both theatrical and streaming content.”

“Looking ahead, Disney is projecting high single-digit earnings growth for 2025 and double-digit growth in subsequent years. With plans to increase dividends and a $3 billion stock buyback program, the company is making it clear that shareholder value is a top priority. The market responded strongly, with Disney’s stock jumping 10% on the news. The results show Disney’s cost-cutting efforts, coupled with strategic investments, are creating a sustainable path forward. Investors are clearly optimistic that this marks the start of a new phase of growth for the company,” she concluded.

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