01—Abstract
Summary
Summary of the 10-Q filed February 2, 2026. Cited figures are marked; the original filing is the authoritative source.
For the first quarter of fiscal year 2026, The Walt Disney Company reported a 5% increase in total revenues to $26.0 billiona, driven by growth across its Services and Products segments.
However, net income attributable to Disney decreased by 6% to $2.4 billionb, resulting in diluted Earnings Per Share (EPS) of $1.34, down from $1.40 in the prior year quarter. This decline in profitability was primarily attributed to lower operating income in the Entertainment segment and a higher effective income tax rate. Despite these challenges, the Experiences segment demonstrated strong performance with a 6% revenue increase and improved operating income.
Key financial activities during the quarter included significant share repurchases totaling $2.0 billionc, along with continued strategic acquisitions, notably the Fubo Transaction which added $0.3 billion in revenue but also contributed to a non-cash tax charge. The company also announced a significant partnership with Reliance Industries Limited forming a joint venture in India, impacting its reporting structure for that region. Disney reaffirmed its commitment to capital expenditures and share repurchases, signaling confidence in its long-term strategic priorities.
02—Key points
Key Highlights
- Total revenues increased by 5% to $26.0 billion compared to the prior year quarter.
- Net income attributable to Disney decreased by 6% to $2.4 billion, with diluted EPS falling to $1.34 from $1.40.
- The Entertainment segment experienced a 35% decrease in operating income, while the Experiences segment saw a 6% increase.
- Significant share repurchases of $2.0 billion were executed during the quarter, with a further $7 billion targeted for fiscal year 2026.
- The Fubo Transaction was integrated, contributing $0.3 billion in revenue but also resulting in a $307 million non-cash tax charge and a higher effective tax rate.
- Capital expenditures were $3.0 billion for parks, resorts, and other property, with a projected $9 billion for fiscal year 2026.
- The company continues to face ongoing legal proceedings, including securities and antitrust actions, though management does not believe any probable material loss has been incurred as of the filing date.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed February 2, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $25.98B$24.69B | +5.2% |
| SG&A Expenses | $4.12B$3.93B | +4.9% |
| Operating Expenses | $22.11B$20.61B | +7.2% |
| Operating Income | $4.60B$5.06B | −9.1% |
| Interest Expense | $443.00M$487.00M | −9.0% |
| Net Income | $2.40B$2.55B | −6.0% |
| EPS (Basic) | $1.34$1.41 | −5.0% |
| EPS (Diluted) | $1.34$1.40 | −4.3% |
| Shares Outstanding (Basic) | 1.79B1.81B | −1.4% |
| Shares Outstanding (Diluted) | 1.79B1.82B | −1.4% |
05—Questions
Frequently Asked Questions
What were the primary drivers of the revenue increase in the current quarter?
The 5% increase in total revenues to $26.0 billion was primarily driven by growth in Service revenues, which rose 5% to $23.2 billion, and Product revenues, up 5% to $2.8 billion. Service revenue growth was supported by increases in content sales, strong performance in parks and experiences, and higher subscription and affiliate fees. Product revenue growth was attributed to the parks and experiences businesses.
Why did net income attributable to Disney decrease despite the revenue growth?
Net income attributable to Disney decreased by 6% to $2.4 billion, with diluted EPS falling to $1.34. This was mainly due to a significant decline in operating income from the Entertainment segment (down 35%), a higher effective income tax rate (32.7% vs. 27.8%), and increased cost of services, partially offset by improved operating income from the Experiences segment and lower restructuring charges compared to the prior year.
What is the impact of the Fubo Transaction and the India joint venture on Disney's financials?
The Fubo Transaction, effective October 29, 2025, contributed approximately $0.3 billion in revenue for the quarter. However, it also resulted in a non-cash tax charge of $307 million, contributing to the higher effective tax rate. The India joint venture with Reliance Industries Limited, formed in November 2024, means Disney now holds a 37% interest and recognizes its share of the venture's results as 'Equity in the income of investees,' rather than consolidating Star India's results.
What is Disney's approach to capital allocation and shareholder returns?
Disney repurchased $2.0 billion of its common stock during the quarter and has a remaining authorization to repurchase approximately 321 million additional shares. The company is targeting $7 billion in share repurchases for fiscal year 2026. They also declared dividends totaling $1.3 billion to be paid in fiscal year 2026. Capital expenditures for parks, resorts, and other property were $3.0 billion in the quarter, with approximately $9 billion projected for fiscal year 2026, reflecting continued investment in growth initiatives.
06—Continue