The Walt Disney Co. powered up a strong June quarter, highlighted by a 14.4 million gain in Disney+ streaming subscribers and a robust rebound in theme park revenue — topping Wall Street expectations on most metrics.
Disney+ paid customers stood at 152.1 million as of July 2, the end of the conglomerate’s third quarter of fiscal 2022. The pickup of 14.4 million for the flagship streamer beat analyst forecasts of a 10 million sequential gain.
Disney reported $21.5 billion on the top line for the quarter ended July 2, up 26% year over year and fueled by a 70% revenue jump in the parks, experiences and products segment. Net income rose 53%, to $1.4 billion, translating into adjusted earnings of $1.09 per share. Wall Street analysts on average expected Disney revenue coming in at $20.62 billion with earnings of $1.00 per share, per Refinitiv data.
The strong gain for Disney+ comes as category leader Netflix shed subs in the first half of 2022, while Warner Bros. Discovery said domestic HBO Max and Discovery+ customers declined in Q2.
Separately Wednesday, Disney announced price increases coming in the fourth quarter of calendar 2022 for Disney+ and Hulu, as well as a Dec. 8 launch date for the ad-supported Disney+ tier in the U.S.
Disney shares were up more than 6% in after-hours trading.
“We had an excellent quarter, with our world-class creative and business teams powering outstanding performance at our domestic theme parks, big increases in live-sports viewership and significant subscriber growth at our streaming services,” Disney CEO Bob Chapek said in prepared remarks.
The company’s board recently reupped the chief exec’s contract through July 2025.
Disney now counts 221.1 million total subscriptions worldwide across its streaming offerings, which comprise Disney+, Disney+ Hotstar, Hulu and ESPN+ — pushing it just ahead of Netflix, which ended Q2 with 220.7 million.
Most of the Disney+ gains in the most recent quarter were outside the U.S. and Canada, where the service picked up just 100,000 to reach 44.5 million. International Disney+ subscribers increased by 6 million in the quarter, to 49.2 million, while Disney+ Hotstar — available in India and Southeast Asia — picked up 8.3 million to hit 58.4 million. Core Disney+ generated average monthly revenue per subscriber of $6.29 (up 3% year over year), compared with $1.20 for Disney+ Hotstar (up 54%).
On the earnings call, CFO Christine McCarthy said the company expects net adds for Disney+ core (excluding Disney+ Hotstar) to “accelerate modestly” in the September quarter over fiscal Q3, “particularly in the domestic market.”
The U.S.-only Hulu service gained 600,000 paid subscribers, to reach 46.2 million total; that includes 4.0 million live-TV customers — flat with the prior quarter. ESPN+ picked up 500,000 customers sequentially, to stand at 22.8 million.
Disney’s direct-to-consumer revenue was $5.06 billion for the quarter, up 19%, below Wall Street expectations of $5.2 billion, per FactSet. The operating loss for the DTC segment ballooned to $1.06 billion, versus $293 million in the year-earlier period.
Revenue for Disney’s linear TV networks increased 3% to $7.2 billion, and operating income increased 13% to $2.5 billion.