Disney's Q3 revenue increased slightly by 2% year-on-year, with strong performance in streaming and parks, but the decline in traditional television business is hard to conceal | Financial Report Insights

Disney's Q3 financial report shows that the company's revenue grew by 2% year-on-year. The theme park business performed strongly, and streaming achieved a significant profit of $346 million for the first time, raising the full-year outlook. However, traditional television and film businesses continued to decline, with the film sector even reporting a loss of $21 million.

On August 6, Disney announced its Q3 financial results:

• Revenue for the third quarter of fiscal year 2025 was $23.7 billion, a year-on-year increase of 2%.
• Adjusted earnings per share were $1.61, a year-on-year increase of 16%, exceeding expectations.
• GAAP diluted earnings per share rose from $1.43 to $2.92, mainly due to a non-cash tax benefit of up to $3.3 billion.
• Free cash flow was $7.5 billion (for the first nine months), a year-on-year increase of 66%.

After announcing better-than-expected quarterly earnings and raising the full-year performance guidance, Disney's stock price still faced pressure, dropping 2% in pre-market trading.

Parks and Streaming as Dual Growth Engines

The financial report indicates that the theme parks and streaming businesses have become Disney's most reliable growth drivers.

In the third quarter ending June 28, the segment including theme parks and experiences performed particularly well, with operating profit increasing by 13% year-on-year to $2.52 billion, and revenue growing by 8%. Notably, profits from domestic parks in the U.S. increased by 22%, with Orlando's Walt Disney World setting a historic revenue record this quarter.

According to the company's Chief Financial Officer Hugh Johnston, even with pressure from competitors like Universal Studios' new park, visitor spending continues to rise.

The streaming business also reached a milestone. This segment achieved a profit of $346 million this quarter, prompting Disney to significantly raise its full-year profit forecast for streaming from $1 billion to $1.3 billion. The company's flagship streaming service Disney+ reached a total of 128 million subscribers in the third quarter, in line with analyst expectations. Disney anticipates that, driven by expanded cooperation with cable operator Charter, Disney+ and Hulu will gain an additional 10 million subscribers in the current quarter.

Traditional Television and Film Business Under Pressure

In stark contrast to the strong momentum of the parks and streaming, Disney's traditional media networks and film studios are facing significant pressure.

The financial report shows that the company's traditional entertainment television business saw a revenue decline of 28%, while the entire entertainment segment, including television networks and films, experienced a 15% drop in operating profit to $1 billion. The company attributes this to the decline in traditional television business and the high base effect from the strong performance of last year's film "Inside Out 2." The film business recorded a loss of $21 million this quarter. According to media reports, the box office performance of films such as Pixar's "Elio" and Marvel Studios' "Thunderbolts" was disappointing, dragging down the overall performance of the department. In June, in response to the contraction of the entire entertainment industry, Disney had already laid off hundreds of employees in its film and television business division.

ESPN doubles down on sports streaming layout

In the face of the decline of traditional television, Disney is fully betting on the future of its sports business through a series of strategic deals—a direct-to-consumer streaming platform centered around ESPN.

Disney announced that the NFL will acquire a 10% stake in ESPN, and as part of the deal, Disney will gain access to NFL Network and other media assets under the league. These assets will be integrated into the ESPN standalone streaming platform, which is set to launch on August 21, priced at $30 per month. The deal is expected to be completed by the end of 2026, at which point Disney will hold a 72% stake in ESPN.

Additionally, according to media reports, ESPN has also reached a five-year agreement worth over $1.6 billion with WWE under TKO Group. Starting in 2026, ESPN will become the exclusive broadcaster of all WWE pay-per-view events in the U.S., including "WrestleMania." These initiatives clearly indicate that Disney is attempting to build a solid moat for its future streaming products by locking in top sports IPs