Disney Q2 2026 revenue increases 7% in profit margin, streaming revenue increases 88% to $582 million

Disney’s first earnings call with Josh D’Amaro as CEO is in – and he has generally good news to report in his Wall Street debut.

The Mouse House generated revenue of $25.17 billion, up 7%, for the three months ended March 28 (Disney’s second quarter of fiscal 2026). Net income fell 31% to $2.25 billion, largely due to a higher tax bill, which translated into adjusted earnings per share of $1.57 (+8%). That topped analyst consensus estimates for revenue of $24.85 billion and adjusted earnings per share of $1.50.

Disney+ and Hulu revenue accelerated in the period, up 13% to $5.49 billion, and operating income rose 88% to $582 million. These results were the result of price increases implemented in the fall of 2026. It was the first quarter that the entertainment streaming industry had an operating margin that broke the double-digit mark — 10.6% — and Disney said it remains on track to reach at least 10% for the full fiscal year 2026. (Disney no longer reports subscriber numbers for the services.)

D’Amaro, previously head of Disney’s theme parks division, took the helm of Disney on March 18 when Bob Iger stepped down after two separate stints as CEO. So far, D’Amaro has not deviated from the strategic direction set during Iger’s tenure.

“At an important time of change for Disney, we remain focused on executing our long-term growth strategy,” D’Amaro and CFO Hugh Johnston wrote in a letter to shareholders. “Our creative and operational momentum drove strong quarterly results, and we continue to expect growth to accelerate in the second half of the fiscal year.”

Citing the layoff of 1,000 employees at Disney last month, executives said that “we recently restructured our marketing efforts across the company to become more effective and efficient in our marketing spend.”

Disney once again provided an optimistic outlook: For the June 2026 quarter, Disney expects total segment operating income of approximately $5.3 billion, up 16% year over year. The company expects fiscal 2026 adjusted earnings per share of approximately 12% (excluding the impact of the 53rd week of the fiscal year, which is expected to contribute 4% of adjusted earnings per share).

Meanwhile, Disney said it is targeting a stock buyback of at least $8 billion in the 2026 fiscal year, which ends in September.

On the movie front, executives touted upcoming theatrical releases “The Mandalorian & Grogu,” “Toy Story 5” and the live-action “Moana.” Such franchise films “strengthen our most strategic asset – our intellectual property – and help fuel our streaming, consumer products, experiences and games businesses for years and generations,” D’Amaro and Johnston said.

The arrival of the blockbuster animated film “Zootopia 2” on Disney+ in March “is a perfect example of how, when our stories resonate, they drive value across our distribution platforms,” the executives said. In addition to raking in $1.9 billion in global box office revenue, the two Zootopia films also surpassed 1 billion hours streamed on Disney+. Additionally, they said, “fans are engaging with the characters and stories of Zootopia in our theme parks, on our cruise ships and at retail.”

Other streaming highlights in the quarter included the debuts of “Predator: Badlands,” Disney+’s “Hannah Montana 20th Anniversary,” Hulu’s “Paradise” season 2 and FX’s “Love Story: John F. Kennedy Jr. and Carolyn Bessette.” Upcoming streaming premieres include “Avatar: Fire and Ash” and Pixar’s “Hoppers,” as well as the fifth and final season of “The Bear” on Disney+ and Hulu.

Disney’s entertainment segment got a boost from Fubo this quarter. Last fall, the company struck a deal to acquire a 70% stake in the live TV streaming platform Fubo, which it combined with Hulu’s live TV business. The addition of Fubo drove a 4% increase in Disney’s entertainment segment revenue, while also increasing costs by 4%.

Excluding advertising revenue from Disney+ and Hulu, entertainment segment advertising revenue decreased 2% year over year.

ESPN’s revenue rose 6% to $4.61 billion this quarter, while operating income fell 5% to $652 million. Ad sales fell 2%, partly due to fewer NBA games. The higher total revenues were due to an increase in subscription and affiliate fees, which were partially offset by fewer subscribers. Disney’s deal with the NFL, which gave the league a 10% ownership stake in ESPN, worth $3 billion, contributed 3% to the sports segment’s revenue growth in the period.

For the June quarter, the company expects ESPN operating revenue to decline 14% due to a double-digit percentage increase in programming costs, including the timing of new rights deals.

Disney Experiences, which houses theme parks, cruises and consumer products, posted revenue of $9.5 billion (up 7%) and operating income of $2.6 billion (up 5%) in March – both record figures for the second quarter. “Current demand at our domestic parks and resorts is healthy,” D’Amaro and Johnston said. “However, we are aware of the macroeconomic uncertainty that consumers face today.”

Attendance at Disney’s domestic parks fell 1% in the first three months of the year, partly due to “continued weakness in international attendance.” The company expects domestic park attendance to improve year-on-year in the June quarter compared to that decline.

In their shareholder letter, D’Amaro and Johnston emphasized the importance of gaming to Disney’s overall strategy to reach younger consumers, saying that “our partnership with Epic Games is central to our efforts in this area.” Disney characters are among the most popular in the Fortnite universe, executives said, noting that “The Simpsons” on Fortnite, which launched last November, has been played for 780 million hours by more than 80 million unique players.

The executives also addressed OpenAI’s abrupt closure of Sora, and that “as a result, we will not proceed with our previously planned investment in the company.” Disney planned to invest $1 billion in the AI ​​company. Under their original agreement, users would be able to use Sora to create their own AI animations of more than 200 Disney characters.

Disney continues to “explore potential commercial opportunities with OpenAI and others,” D’Amaro and Johnston said.

“We view advanced technologies, including AI, as a meaningful long-term opportunity,” they wrote. “We see opportunities for AI to play a role in five areas of our business: content creation and production, revenue generation, workforce productivity, guest and consumer experiences, and business operations. At the same time, we are committed to implementing AI in a way that puts human creativity at the center of everything we do and respects the creators and the value of our intellectual property.”