icon
icon
icon
icon
🏷️$300 Off
🏷️$300 Off

News /

Articles /

Disney's Q4 2024 Earnings Call: A Deep Dive into Streaming Growth and Future Prospects

Eli GrantFriday, Nov 15, 2024 12:47 am ET
4min read
Walt Disney Co.'s Q4 2024 earnings call provided valuable insights into the company's strategic direction, particularly its focus on streaming services and content expansion. The call highlighted Disney's commitment to driving subscriber growth, enhancing profitability, and leveraging its extensive content library to maintain a competitive edge in the rapidly evolving streaming market.

Disney's direct-to-consumer streaming services, including Disney+ and Hulu, have been a significant driver of growth. In Q4 2024, Disney+ Core subscribers grew by 4.4 million, reaching 122.7 million, while Hulu subscribers increased by 2% to 52 million. This growth, coupled with improved profitability in the combined streaming business, contributed to a 23% increase in total segment operating income. Disney's streaming services reported an operating income of $321 million, a turnaround from a $387 million loss in the same period last year.

Disney's content strategy has been a key factor in its streaming success. The company's renewed focus on creativity has led to a record-breaking 60 Emmy Awards, indicating strong content performance. Upcoming films like "Captain America: Brave New World," "Lilo & Stitch," "The Fantastic Four: First Steps," "Zootopia 2," and "Avatar: Fire and Ash" are expected to boost box office revenues and attract new subscribers to its streaming platforms.

Disney's integration of ESPN into its streaming services has also been a significant factor in its growth. The launch of ESPN+ added 4.4 million subscribers, bringing the total to 122.7 million. This growth was driven by the platform's diverse content offerings, including live sports events, original series, and documentaries. The integration of ESPN into Disney's streaming ecosystem has not only expanded its subscriber base but also created new revenue streams.

ADXN, AG, AMLX, AMSC, APLD...Market Cap, Turnover Rate


Looking ahead, Disney anticipates a "modest decline" in Disney+ Core subscribers in Q1 2025, followed by double-digit percentage growth in fiscal 2025 and 2026. The company expects high-single digit adjusted EPS growth in fiscal 2025, accelerating to double-digit growth in fiscal 2026 and 2027. This strategic focus on streaming services, coupled with continued investment in content, is expected to generate strong returns for investors.

Disney's international expansion, particularly in theme parks and consumer products, is also poised to drive EPS growth over the next three years. In Q4 2024, the experiences segment, which includes theme parks and consumer products, saw revenue grow 1% to $8.24 billion. While domestic parks' operating income rose 5% to $847 million, international parks' operating income fell 32% due to a decline in attendance and guest spending, as well as increased costs. Despite this, Disney expects the experiences segment to see 6% to 8% profit growth in the coming fiscal year.

In conclusion, Disney's Q4 2024 earnings call provided a comprehensive overview of the company's strategic direction, with a strong focus on streaming services and content expansion. The company's commitment to driving subscriber growth, enhancing profitability, and leveraging its extensive content library positions it well to maintain a competitive edge in the rapidly evolving streaming market. With a balanced approach to international expansion and continued investment in content, Disney is well-positioned to deliver strong returns for investors over the next three years.
Comments

Add a public comment...
Post
User avatar and name identifying the post author
ExeusV
11/15
Deutsche Bank has upped its PT on $DIS to $131 from $115. The investment firm noted that Disney's FY25 guidance exceeded expectations, with detailed information provided by management on OI at the segment level, CFO, Capex, Adj. EPS, dividend growth, and share repurchases. The Experiences segment guidance outperformed projections with 6-8% OI growth, whereas the Sports segment F2025 guidance aligned with expectations after adjusting for the deconsolidation of India, which had a positive impact of ~$550M on reported 2025E Sports OI. In the Entertainment segment, guidance for DD OI growth (including a $875M annual increase in DTC EBITDA) is ~$100M higher than estimates, adjusting for India. The deconsolidation of India adds another ~$200M to Entertainment OI. Capex guidance of $8B is $1B above estimates, leading to implied FCF guidance that’s $0.5B below previous estimates due to increased capex. HSD Adj. EPS growth guidance is more favorable than the previously projected 1% decline. Additionally, management provided insights into F2026 and F2027, including segment OI guidance, Adj. EPS, and CFO guidance for 2026, and Adj. EPS guidance for 2027. The 2026-2027 guidance suggests healthy growth across all three operating segments, with explicit Disney Adj. EPS growth in both years. For 2026, a 10% OI margin target was set for Entertainment DTC (excluding Hulu Live), although this can only be used directionally since Hulu Live OI is not disclosed. Analyst: Bryan Kraft
0
Reply
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
You Can Understand News Better with AI.
Whats the News impact on stock market?
Its impact is
fork
logo
AInvest
Aime Coplilot
Invest Smarter With AI Power.
Open App