Disney Q4 2025 Earnings: Mixed Results with Streaming Success Amid Linear TV Decline

This analysis is based on Disney’s fiscal Q4 2025 earnings report released on November 13, 2025, which revealed mixed financial performance and triggered a significant stock decline [1][2]. The company’s shares plunged 8.34% to $106.92 during regular trading, with volume surging to 27.72 million shares compared to the average 7.91 million [0]. The stock had initially fallen as much as 9% in pre-market trading following the earnings release [1].

The market reaction occurred amid broader weakness, with the S&P 500 down 0.87%, Dow Jones down 0.83%, and Nasdaq down 1.35% [0]. Disney’s performance reflects the complex transition from traditional media to streaming-focused entertainment, with notable successes in some segments offset by accelerating declines in others.

Disney reported a significant divergence between top-line and bottom-line performance:

• Revenue:
  $22.46 billion, missing analyst estimates of $22.83 billion [1][2]
• Adjusted EPS:
  $1.11, beating analyst estimates of $1.05-$1.07 [1][2]
• Net Income:
  $1.44 billion, or 73 cents per share, more than double the $564 million (25 cents per share) from year-ago quarter [2]

The Direct-to-consumer segment demonstrated remarkable improvement with operating income rising 39% to $352 million [1][2]. Disney+ added 3.8 million subscribers, bringing total subscribers to 131.6 million [1][2]. The company achieved its full-year streaming operating income target of $1.33 billion, exceeding the $1.3 billion goal [1]. Hulu maintained strong performance with 64.1 million subscribers [2].

The Entertainment Division faced significant headwinds, with revenue falling 6% to $10.21 billion [1]. Linear network revenue declined 16% year-over-year, while operating income dropped 21% to $391 million [2]. This accelerating decline reflects broader cord-cutting trends affecting the traditional media landscape.

The Experiences segment continued its strong performance with revenue growing 6% to $8.77 billion and operating income increasing 13% to $1.88 billion [2]. Domestic parks revenue rose 6% to $5.86 billion, while international parks revenue increased 10% to $1.74 billion [2].

ESPN maintained relatively stable performance with revenue up 3% to approximately $4 billion and operating income essentially flat at $898 million [2].

Disney demonstrated confidence in its financial position through significant shareholder returns:

• Dividend increased 50% to $1.50 per share
  from $1.00 [1][2]
• Share repurchase program doubled to $7 billion for fiscal 2026
  [1][2]
  These moves signal management’s commitment to returning capital to shareholders while investing in growth initiatives.

Management provided optimistic guidance for fiscal 2026, expecting

[1][2]. The company targets streaming profitability of approximately $375 million for Q1 2026 [1]. Key growth drivers include parks strength, ESPN Unlimited rollout, and international expansion plans.

The ongoing dispute with Google’s YouTube TV, ongoing since October 31, is costing Disney “millions each day” according to management [3]. Morgan Stanley estimates this dispute will shave off about $60 million in revenue this quarter [1]. The duration and resolution timeline remain significant uncertainties.

While management cited “very, very encouraging” adoption rates with 80% of new subscribers choosing bundled packages [1][3], specific subscriber numbers and revenue contributions were not disclosed, creating uncertainty about this strategic initiative’s actual impact.

Disney announced it will stop reporting Disney+ subscriber numbers and ARPU metrics [2], following Netflix’s approach. This reduced transparency may make it more difficult for investors to track streaming performance and growth trajectory.

1. Accelerating Cord-Cutting:
   The 21% drop in linear networks operating income [2] reflects accelerating decline trends that could outpace streaming growth, creating a potential revenue gap.

2. Competitive Pressure:
   Universal’s Epic Universe opening in Florida represents significant competition, though management noted it’s “impacting the rest of the competition in Florida more than it’s impacting us” [2].

3. CEO Succession Uncertainty:
   These results come in the “final stretch of CEO Bob Iger’s turnaround ahead of his planned departure next year” [1], creating leadership transition uncertainty during a critical transformation period.

4. YouTube TV Dispute Resolution:
   The ongoing carriage dispute continues to cost millions daily [3], with no clear resolution timeline, potentially impacting Q1 2026 results.

1. Streaming Profitability Expansion:
   Having achieved profitability ahead of schedule, Disney has opportunities to expand margins through content optimization and international expansion.

2. Parks & Cruise Expansion:
   Two new ships launching (Disney Destiny this month, Disney Adventure in March 2026) [2] represent significant growth opportunities in the experiences segment.

3. ESPN International Expansion:
   Management mentioned plans to bring ESPN to Asia [1], though specific timelines and market entry strategies require clarification.

4. Bundling Strategy Success:
   The high adoption rate of bundled packages with ESPN Unlimited [1][3] suggests successful cross-selling opportunities across Disney’s content ecosystem.

1. Streaming Price Elasticity:
   Continued price increases (fourth straight year of hikes) [1] may eventually impact subscriber growth and retention rates.

2. Advertising Market Recovery:
   The $40 million decline in political advertising [1] reflects broader advertising market weakness that could persist or recover.

3. International Execution:
   Successful execution of international expansion plans will be critical for sustained growth beyond domestic market saturation.

Disney’s Q4 2025 results reflect a company in transition, with streaming profitability achieved ahead of schedule while traditional linear TV operations face accelerating decline. The 39% increase in streaming operating income to $352 million [1][2] demonstrates successful execution of the direct-to-consumer strategy, while the 16% decline in linear network revenue [1] highlights ongoing challenges.

The company’s strong shareholder return policies, including the 50% dividend increase to $1.50 and doubled $7 billion share buyback program [1][2], indicate confidence in future cash flow generation. Management’s double-digit EPS growth guidance for fiscal 2026 [1][2] provides an optimistic outlook, though execution risks remain significant.

Critical uncertainties include the resolution timeline and financial impact of the YouTube TV carriage dispute [3], the actual performance of ESPN Unlimited adoption, and the successful navigation of CEO succession during this transformation period. The reduction in financial transparency through discontinued subscriber reporting [2] may increase investor uncertainty despite the positive fundamental developments in streaming profitability.