The Walt Disney Company
CEO : Mr. Robert A. Iger
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2024 Q4 | 6.3% YoY | 22.2% | 78.6% | 2024-11-14 |
Robert Iger says,
Financial Growth and Guidance
- Disney expects high single-digit adjusted EPS growth in fiscal 2025.
- The company anticipates double-digit adjusted EPS growth for fiscal 2026 and 2027.
- This projection indicates a strong recovery and growth trajectory after recent challenges.
Content and Creative Achievements
- Television programming has won a record-breaking 60 Emmy Awards, showcasing the success of branded series and general entertainment.
- Summer box office performance was bolstered by “Inside Out 2” and “Deadpool & Wolverine,” the top two movies of the year to date.
- Upcoming highly anticipated films include “Moana 2,” “Mufasa: The Lion King,” and a promising slate for 2025 featuring “Captain America: Brave New World,” “Lilo & Stitch,” and others.
- The system economics of Disney’s movie business are stronger than ever due to a multiplier effect across streaming, parks, and merchandise.
Experiences and Expansion
- Disney’s Experiences segment is recognized as the industry gold standard, with targeted investments aimed at income growth.
- The Disney Cruise Line fleet will expand to six ships after the Disney Treasure is unveiled, with seven more ships in development.
- Disney parks and experiences are undergoing multiple exciting expansions across six global locations.
- Collaboration with Epic Games will enhance integration of popular brands into new entertainment offerings.
Streaming and Digital Expansion
- Disney+ Core and Hulu subscriptions totaled 174 million, with Disney+ alone surpassing 120 million core subscribers in five years.
- An ESPN tile will be introduced on Disney+ on December 4th, strengthening Disney’s streaming portfolio.
- Plans are in place for ESPN’s flagship direct-to-consumer offering launch in early fall of 2025, marking a new era for ESPN on Disney+.
- The integration with Hulu and ESPN highlights Disney’s strategy to create a comprehensive streaming service.
Overall Strategic Positioning
- Disney has positioned itself for sustained growth and shareholder value creation with its world-class asset portfolio.
- The company is confident in its creative and financial strategies as it looks towards fiscal 2025 and beyond.
- Leadership and strategic investments have been pivotal in setting Disney on a path for a new era of growth.
Hugh Johnston says,
Subscriber Growth and Profit Margins
- Subscriber growth is identified as a key driver of achieving double-digit margins.
- Incremental subscribers contribute high margins due to low incremental costs.
- The company aims to continuously expand its subscriber base for sustained margin improvement.
Pricing Strategy
- Plans are in place to increase pricing aligned with the increasing value offered to consumers.
- Proprietary content from movie and TV studios is expected to justify future pricing adjustments.
- The exceptional quality of content is a crucial factor in driving pricing power and revenue growth.
Product Enhancements and Churn Reduction
- Product updates and features, including an improved recommendation engine, are aimed at enhancing user engagement.
- Efforts to reduce churn are considered vital for subscriber retention and long-term growth.
- Increased ad monetization through advanced ad technology is expected to bolster revenue streams.
International Market Expansion
- Significant growth opportunities are identified in international markets.
- Expansion strategies involve leveraging content and technology to capture global audiences.
| Growth Driver | Impact | Strategy |
|---|---|---|
| Subscriber Growth | High Margin | Expand user base |
| Pricing | Revenue Increase | Value-based pricing |
| Product Enhancements | Reduced Churn | Recommendation engine upgrade |
| International Expansion | Global Audience | Market capture |
Q & A sessions,
ESPN’s Transformation and Advertising Strategy
- ESPN is set to offer not only traditional sports coverage but also new features such as integrated betting and AI-driven personalized sports experiences.
- **The integration of technology with sports presentation is expected to enhance consumer experience significantly.**
- Live sports continue to attract advertisers due to high consumer engagement, offering a lucrative opportunity for ESPN’s app-based world.
- Linear viewing remains strong, providing a different audience profile compared to streaming, thus offering a comprehensive advertising package.
Content Pipeline and Streaming Strategy
- Disney anticipates increased streaming consumption of existing films when sequels or related films are introduced, as seen with titles like Inside Out and Moana.
- Upcoming films in 2025 and 2026, including Zootopia, Avatar, Star Wars, and Mandalorian, are expected to bolster both qualitative and commercial performance.
- **Disney’s strong content lineup is poised to significantly enhance streaming performance and subscriber growth.**
Consolidation and International Investment
- Disney considers its acquisition of 20th Century Fox as a strategic consolidation move, contributing to 174 million global subscribers.
- While further acquisitions are not currently needed, Disney plans selective investment in EMEA and APAC to expand its streaming business.
- Investments will focus on technology improvements to reduce churn, enhancing the return on content investment.
Guidance and Financial Outlook
- Disney emphasizes multiyear guidance due to substantial investments in DTC services, parks, cruise ships, and consumer products.
- **The investments are expected to yield significant returns, with 2025 investments anticipated to pay back quickly by 2026.**
- Linear decline is modeled, but Disney’s strong streaming portfolio provides a natural hedge against shifts in consumer preferences.
Divestitures and Partnerships
- No value-creating opportunity was identified for Disney through divestitures, after thorough evaluation.
- Disney’s experiences outlook includes positive early bookings for summer attractions, indicating robust performance.
- Deals like that with DirecTV are custom-tailored, beneficial to both parties, and should not be generalized to other agreements.
| Year | Key Film Releases | Streaming Impact |
|---|---|---|
| 2025 | Zootopia, Avatar | Expected Increase in Consumption |
| 2026 | Star Wars, Mandalorian | Strengthened Subscriber Growth |
No bad stock 