Walt Disney Co Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ben Swinburne - Morgan Stanley - Analyst : You guys have a lot going on in terms of platform enhancements this year at Disney+. I'm wondering, as Adam builds out his team, you work on password sharing, bundling ESPN in, what do you think will be the most impactful to driving that business? And what's realistic for investors to sort of -- in terms of timeline to expect kind of tangible results playing out in what we see in your reported numbers? And then I thought I would at least ask Hugh, if you could comment on the outlook for Experiences and Parks in particular, around the opening of Epic, there's probably no other question I get more than your ability to deliver on your guidance on the domestic parks front for the year. So any update there would be greatly appreciated. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:30PM, DIS.N - Q1 2025 Walt Disney Co Earnings Call

Question: Robert Fishman - MoffettNathanson LLC - Analyst : Bob, now that DirecTV and Comcast have launched their skinnier bundles and Hulu Live, fubo planning their own, do you expect these skinnier bundles at current pricing to change the trajectory of cord-cutting? And if not, what else on the pricing or product side do you plan with Fubo that you couldn't accomplish with just Hulu Live? And then if I could just take a step back, after the Fubo deal and shutting down Venu, can you discuss Disney's overall sports or broader streaming strategy with the potential for consumer confusion from all the different options, including the upcoming ESPN flagship launch? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:30PM, DIS.N - Q1 2025 Walt Disney Co Earnings Call

Question: John Hodulik - UBS Investment Bank - Analyst : Great. And maybe some questions for Hugh. Hugh, can you update us on the cost-cutting initiatives and how far along you are? And along with that, it looks like from the Q that you guys trimmed the content budget to $23 billion from $24 billion. Just what's behind that? And was that -- is that related to the fires in LA or just some changes to the overall budget? And then lastly, I have to ask, you have guidance for high single-digit earnings growth for the year started out with earnings growth of over 40% in the first quarter here. Can you just talk a little bit about cadence of earnings growth as we look out through the rest of the year? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:30PM, DIS.N - Q1 2025 Walt Disney Co Earnings Call

Question: Jessica Reif Ehrlich - Bank of America - Analyst : I guess, two things. One, on the NBA, can you talk about how you view the path to profitability in the new contract given the weaker season to-date ratings and obviously, the step-up next season? And then on DTC, maybe we could drill down a little bit on how you're thinking about subscriber drivers. Bob, you mentioned password sharing crackdown. How do you think about the TAM with the potential subscriber impact? Obviously, some great films coming onto the platform later this year. And then how important is news to the overall product offer?

Question: Michael Ng - Goldman Sachs - Analyst : I just wanted to follow up on your comments, Bob, about streaming and news. Could you talk a little bit about your decision to add the Sportscenter Daily Show to Disney+ instead of ESPN flagship? And with streams and SC+, the investments in live content, what have you found to be the benefit of live as it relates to gross adds and churn and streaming? And could you expand a little bit about the competitive advantage that Disney has in producing and distributing live relative to some other streaming services?

Question: David Karnovsky - J.P. Morgan - Analyst : With Experiences, I wanted to see if you could provide any color on the Disney Treasure launch, how the early returns look relative to expectations and the read-throughs for the launches later this calendar year? And then just sticking with parks, maybe you could discuss the rollout of Lightning Lane Premier, which I think you recently expanded access for, what type of take rates are you observing on the product and how is that impacting other spending buckets or the overall experience?

Question: Michael Morris - Guggenheim Securities - Analyst : Two questions about your outlook. First, at Experiences, Hugh, on the fourth quarter call, you mentioned that bookings in the back half of the year were positive at that point in time. I'm wondering if you can give us an update there? Are they still positive? Do you have any more visibility? How has that trended? And then my second question is on direct-to-consumer. You had a really strong first quarter. I think you grew about $400 million year-over-year on operating profit, and your guide only implies about $100 million a quarter for the next three quarters. So can you talk a little bit about what goes into that outlook, what the puts and takes are maybe on investment that would have that growth slower for the balance of the year?

Question: Bryan Kraft - Deutsche Bank AG - Analyst : So I had one on sports and then just a follow-up. So first, on sports, you're obviously going to see a step-up in rights costs for the NBA next year, but you've guided to low single-digit OI growth in fiscal '26 on top of 13% growth this year. So I just wanted to ask if we should be thinking about some offset and other sports rights coming out of the business to offset the NBA increase or if the fiscal '26 growth is more a function of the OI growth from flagship or a big improvement in pay-TV sub declines because of smaller priced -- lower-priced small sports and news packages? So just trying to get underneath of the drivers of that strength. And then secondly, just on Disney+, if you could talk about the outlook for Disney+ subscriber growth this year, I think you're guiding to essentially flat subs through the end of 2Q. What are you expecting in the second half of the year directionally? And what are some of the key factors that are shaping the outlook for the rest of the year?

Question: Kannan Venkateshwar - Barclays - Analyst : Maybe on ESPN flagship, Bob. Just in terms of the vision that you have for the product and the objectives with that service, is this to basically further grow the sports business relative to where it is today or is it more to preserve existing profitability and preserve the ecosystem as it is today? It would be great to get your thoughts on that. And then maybe another one on just the industry-wide consolidation efforts that we have seen. If there is an effort to roll up cable networks across the industry, would there be any interest from your end potentially to participate in that with some of your smaller networks?