Mixed Q4
Streaming vs. Linear
In Q4, Disney’s Entertainment segment recorded a 6% decrease in revenues, as growth in streaming was offset by declines in linear networks. Direct-to-Consumer (DTC) revenue increased 8% in the quarter. DTC’s operating income rose 39%, helped by higher subscription revenue, driven by growth in subscribers and average revenue per user (ARPU).
The company ended the quarter with 195.7 million Disney+ and Hulu subscriptions, reflecting an increase of 12.4 million sequentially, driven by higher wholesale Hulu subscriptions. At quarter-end, Disney+ had 131.6 million subscribers, up 3% sequentially, with growth in both international and domestic subscribers. Domestic subscribers grew 3% while international subscribers were up 4% sequentially.
Disney saw strong viewership of its content on its streaming platforms during the fourth quarter, driven by television series such as Alien: Earth, High Potential, and Tempest. It has several popular titles coming out over the next few months, which are anticipated to drive continued engagement.
Linear Networks’ revenues decreased 16% in Q4, with decreases in domestic and international revenues of 7% and 56% respectively. Operating income was down 21%. Domestic Linear Networks operating income declined 5% in the quarter due to lower advertising caused by decreases in viewership and political advertising.
Outlook
For fiscal year 2026, Disney expects adjusted EPS to grow double-digits compared to fiscal year 2025. The company expects double-digit percentage segment operating income growth for the Entertainment segment compared to FY2025, weighted to the second half of the year.