Buried under the bombshell news of Disneyland Abu Dhabi is that Disney reported its second quarter fiscal 2025 earnings, and they were pretty, pretty good. So much so that the company’s stock was up sharply in pre-market trading in the ~30 minute window between the release of the report and the announcement of a new park in the UAE. This covers the good & bad of these results as they relate to Walt Disney World & Disneyland.
Company-wide, Disney’s earnings beat on the top and bottom lines, with earnings per share of $1.45 adjusted versus $1.20 expected and up 20% from the prior year. Revenue jumped 7% year-over-year at $23.62 billion versus $23.14 billion expected. Total segment operating income increased 15% for Q2 to $4.4 billion from $3.8 billion in Q2 fiscal 2024. Disney now expects full-year adjusted EPS of $5.75, an increase of 16% compared with fiscal 2024. The company’s prior guidance called for high single-digit adjusted EPS growth.
Streaming casts a long shadow over everything else, so it’s nice to see the company’s streaming business reported another quarter of profitability. Additionally, domestic subscriptions for the streaming service increased by 2%, and international numbers were up 1%. This is noteworthy because Disney previously offered guidance of a decline during the quarter, but instead reported a 1.4 million increase in subscriptions to the Disney+ service, bringing its global base to 126 million. Not only that, but the average monthly revenue per paid Disney+ subscriber increased for both the domestic and international markets. A rare, unequivocal win for streaming–and the forward guidance is similarly positive.
Disney’s Experiences division (which includes Parks & Resorts) revenue rose 6% during the quarter to $8.89 billion. Domestic theme park revenue rose 9% to $6.5 billion, and operating income increased 13% to $1.8 billion. Meanwhile, international park revenues dipped 5% to $1.44 billion and income dropped 23%.
The company attributed the international declines to lower results at Shanghai Disneyland and Hong Kong Disneyland, driven by softer spending among Chinese consumers. This is a rare role reversal from the last several quarters of the international parks outperforming the domestic ones.
The company attributed revenue gains to higher guest spend at its domestic parks and higher volumes on its cruise ships following the launch of the Disney Treasure, growth in Disney Vacation Club sales, higher attendance at the domestic parks, and higher per guest spending. This was all partially offset by pre-launch costs of the Disney Adventure and Destiny cruise ships.
Also interesting was the forward outlook for 2025. In the Executive Commentary, the company indicated that it was monitoring macroeconomic developments for potential impacts to its businesses. Disney recognizes that uncertainty remains regarding the operating environment for the balance of the fiscal year, but there’s no noticeable impact yet.
However, based on the strong first-half results and what they’re seeing for the second half, Disney now expects the aforementioned increase in EPS of approximately $5.75 (16% above the prior year) and approximately $17 billion in cash provided by operations (a $2 billion increase over prior guidance).
As you might recall, Disney had previously reiterated that it expected fiscal 2025 growth for the Experiences (Parks & Resorts) segment during the full-year to be 6% to 8% as compared to last year, with growth weighted in the second half of the year. That suggested that they were still expecting May through October to be high-growth as recently as February.
During Bob Iger’s opening remarks, he had this to say: “Our Experiences segment delivered strong results this quarter, driven by the outstanding performance from our domestic businesses. Investments in this segment have delivered impressive returns on invested capital with returns from our experiences businesses at all-time highs.”
“Experiences is obviously a critical business for Disney and also an important growth platform. Despite questions around any macroeconomic uncertainty or the impact of competition, I’m encouraged by the strength and resilience of our business, as evidenced in these earnings and in the second half bookings at Walt Disney World.”
Recently, we had cast doubt on the second half of the year at Walt Disney World, noting that the flurry of discounts suggested softness in bookings. It now appears that we were wrong.
During the earnings call itself, Disney CFO Hugh Johnston expressed enthusiasm for the Experiences segment, indicating it performed better than expected for the fiscal quarter. In response to an analyst question, Johnston indicated that the outlook is actually “still quite strong” for the Experiences business.
He shared that bookings right now for Walt Disney World are up 4% in the third quarter, and that’s with about what we would say is about 80% in (meaning that by this point in an average year, 80% of reservations for the current quarter, would already be made). Then for the fourth quarter, bookings are up 7%, that’s probably somewhere between 50% and 60% in at this point.
Johnston stated that things are “certainly looking very optimistic and that was part of what factored into our change in the guidance going forward…it’s not getting any worse. And again, just to reiterate what Josh mentioned on the CNBC attendance is actually still quite good. It’s just per cap spending isn’t quite as high.”
At that point, Iger jumped in to clarify that the problem with per caps is in China, because consumers there are a “bit challenged.” Disney feels good that they continue to have engagement and strong attendance at Shanghai Disneyland and Hong Kong Disneyland, even as Chinese consumers are “tightening their belts a little bit.”
This bit about China is relevant to us because there’s no explaining away these numbers by pointing to the international markets. Those have been picking up some slack recently in the post-pent-up demand era, but not now. Walt Disney World and Disneyland are up across the board, whereas the international parks (but mostly China) are the drag. If we look at just domestic numbers, everything is up.
Johnston further shared that, in terms of expectations for the remainder of this fiscal year and the first quarter of 2026 (which is actually October through December 2025), Disney previously guided to 6% to 8% growth.
Given the numbers that Disney is currently seeing, the actual growth is probably going to be at the higher end of that for the Experiences business for this year. For 2026 and beyond, he said he was not going to comment on that at this point–it’s too early.
As a follow-up to that, Johnston was asked if the domestic parks have seen a hit to international visitation (presumably for the reasons discussed in Canadians Are Canceling Walt Disney World Vacations.)
In terms of the attendance, Johnston indicated that international attendance at the domestic parks still has not gotten back to pre-COVID levels (this is not a new development), but it is still in the double-digits. As for recent international visitation, Walt Disney World and Disneyland have “seen a bit of an impact” of roughly 1% to 1.5%. What Disney expects going forward is something similar to that, but the company points out that it is “more than making up for it with domestic attendance–attendance at the parks has been terrific.”
How is it possible to reconcile this strong performance and forward guidance with what we’ve seen lately? Difficult, quite honestly…but we’ll give it a try!
My gut level reaction is that it’s not super surprising that numbers for the second quarter are up. When the aggressive push for “Cool Kid Summer” was being rolled out, Walt Disney World leadership indicated that they were coming off their best 10 weeks for occupancy. That encompassed winter and the first half of spring break, lining up with this latest quarter, which ended on March 29.
When we recently updated the list of Cheapest Dates to Visit Walt Disney World in 2025 & 2026, we warned that the tides could be turning–meaning winter would likely increase in price while summer decreased. That’s not really so much a “warning” as a trend already in progress. But we believe it’ll accelerate in the years to come.
It’s also worth noting that after no ticket price increases since December 2022, admission prices are up for the 2025 calendar year. So that right that is an increase in per caps (except for Florida residents taking advantage of that annual deal) on a year-over-year basis, since admission was unchanged from 2023 to 2024.
Moreover, the prices of Lightning Lanes Multi-Pass and Single Pass prices are up; Genie+ still existed during this quarter last year, and it’s our understanding that uptake is higher with the pre-arrival option. Not only that, but Premier Pass is a product offering that did not exist during this quarter last year. So line-skipping is likely outperforming, even if it’s coming at the expense of table service meals or souvenir purchases.
Hotel prices were not up materially during the quarter, and discounts were about on par with last year. So that probably isn’t a contributing factor. But if other key metrics are up–especially admission, which is a biggie–room rates don’t need to be.
What will be interesting to see is whether per guest spending numbers are still up for summer. There are several offers for admission and room rates that are better–much better–than last year. While it’s possible, even likely, that Disney already captured plenty of guests at higher prices (and they won’t rebook at lower rates), it’s equally likely that Disney is up on volume but will be down on per guest metrics for the summer.
As we’ve pointed out, Summer 2025 marks the most aggressive discounts we’ve seen in a long time. By carefully taking advantage of the latest wave of discounts for this summer on tickets & resorts, we’re seeing the lowest prices for Walt Disney World vacations in over 6 years. (See How to Get the Cheapest Walt Disney World Trip Since 2019.)
The aggressive discounting would explain the 4% increase, and there was certainly extra bandwidth last summer in terms of occupancy and attendance. Before you worry too much about how this will impact the in-park experience, don’t. We have a piece coming soon explaining the lower wait times even in higher attendance. (Feels like crowds and congestion are a different story–and presumably will be worse at Magic Kingdom in July and beyond thanks to Starlight.)
Disney’s domestic theme park results are quite the contrast to the results Comcast recently reported. As revealed in its earnings for the first three months of the year, attendance dropped at Universal’s theme parks in the United States. Theme parks revenue was down 5.2% year-over-year, to $1.876 billion. The company attributed the decline in part due to January’s wildfires, which forced the temporary closure of Universal Studios Hollywood. Adjusted EBITDA in the theme parks segment also was down for the quarter by 32.1% year-over-year.
While the wildfires unquestionably played a role, there’s also this interesting trend of both Comcast and Disney attributing decreases to externalities. The trend-line is also down at Universal Orlando, so this is not just a matter of the wildfires. In Universal’s defense, there is almost certainly a ‘calm before the storm’ with people postponing visits prior to the opening of Epic Universe.
Despite the decreases, Universal is seeing “strong demand” for Epic Universe, according to Comcast CEO Brian Roberts. “Theme Parks remain on an incredible growth trajectory,” he said. “We could not be more excited for the grand opening of Epic Universe in Orlando next month and our plans to bring a new world-class theme park to the UK.”
Without a doubt, Comcast’s numbers will get a boost from Epic Universe. But we’re also expecting the first few months of Epic Universe to underperform expectations, with softer bookings than originally anticipated. Of course they’re going to say there’s “strong demand,” and there won’t be any way to rebut that since no guidance was offered. Adding a park improves numbers–that’s the way it works.
We mention this because there’s this sentiment among some fans that Universal is going to “crush” Disney once Epic Universe opens. That’s a more far-fetched fantasy than any Disney fairytale. We saw this most recently in response to Universal Warns of Virtual Queues to Enter Epic Universe Lands, with some readers erroneously concluding that Epic Universe has such sky-high demand that it needs to manage capacity via virtual queues.
That isn’t remotely accurate. The virtual queues are not about a surplus demand, they’re about a shortage of supply (capacity). Epic Universe is currently buckling under the weight of far fewer than 20,000 guests per day. That is only get worse once summer storm season arrives and the park’s (many) outdoor attractions are going down with regularity, on top of the other issues. Virtual queues might be a necessary evil in the short term, but let’s not pretend like they’re suddenly a good thing (the giveaway is in the word evil).
Just to be clear, it’s not cause for long-term concern or a sign of disinterest in Epic Universe. Such a phenomenon is not uncommon with major new openings. It’s kind of a given that Comcast’s numbers won’t continue they’re decline, though, as that’s how adding a new theme park to the mix works. Epic Universe is a mostly fantastic park and I’m a big fan, but I also think it’s fairly undeniable that the park is going to have major growing pains. The cracks are already evident.
Ultimately, it was a strong quarter for the company as a whole, but especially the Disney Experiences division and the domestic Parks & Resorts, in particular. Walt Disney World and Disneyland, as well as Disney Cruise Line were real bright spots. Hopefully that reinforces the company’s bullishness in the business, and investing in Parks & Resorts over the next decade.
Speaking of which, another thing that got lost in the shuffle with the Disneyland Abu Dhabi news is that Bob Iger stated twice during the earnings call that the company still has plans to invest more than $30 billion in its existing theme parks in Florida and California “to enhance those offerings, create jobs and support the U.S. economy.” Iger called this a “vote of confidence” in both Walt Disney World and Disneyland.
I’m not sure we’ve ever heard this $30 billion number before. (It’s possible we have–I don’t see it in the DTB Archives.) We’d previously heard $17 billion for Walt Disney World, $2-3 billion as the minimums set by DisneylandForward, and $60 billion as a whole–but that last number also included the international parks and Disney Cruise Line. We’ve also heard percentages of the $60 billion for various things, but never that half the total would go into WDW and DLR. This would on its own be big news, suggesting that the $60 billion has either increased or a greater allocation is now being funneled to Walt Disney World and Disneyland. Either way, we’ll take it.
Planning a Walt Disney World trip? Learn about hotels on our Walt Disney World Hotels Reviews page. For where to eat, read our Walt Disney World Restaurant Reviews. To save money on tickets or determine which type to buy, read our Tips for Saving Money on Walt Disney World Tickets post. Our What to Pack for Disney Trips post takes a unique look at clever items to take. For what to do and when to do it, our Walt Disney World Ride Guides will help. For comprehensive advice, the best place to start is our Walt Disney World Trip Planning Guide for everything you need to know!
YOUR THOUGHTS
Thoughts on the Walt Disney Company’s Q2FY25 earnings? Thoughts on the growth of the domestic parks versus the underperformance of the international parks (namely China)? Do you agree or disagree with our assessment? Any other thoughts or commentary to add? Any questions we can help you answer? Hearing your feedback–even when you disagree with us–is both interesting to us and helpful to other readers, so please share your thoughts below in the comments!
