What is the primary reason for the significant drop in net income and EPS year-over-year?

The primary reason for the significant decrease in net income attributable to Disney and diluted EPS is the comparison to the prior-year quarter. The prior-year quarter benefited from a substantial non-cash tax benefit of $3.3 billion related to a change in Hulu's U.S. income tax classification. In the current quarter, net income was impacted by an impairment charge of $812 million on the investment in A+E Networks.

How did the different business segments perform in terms of revenue and operating income?

Revenues saw growth across all segments: Entertainment (+6% for the quarter), Sports (+4%), and Experiences (+10%). However, operating income varied. Entertainment operating income increased significantly (+64%) due to higher subscription and affiliate fees. Experiences operating income also rose (+20%) driven by strong theme park and resort performance. The Sports segment's operating income declined (-17%) due to higher programming and production costs, despite revenue growth.

What is the company's outlook on capital expenditures and shareholder returns?

Disney expects capital expenditures to be approximately $9 billion for fiscal year 2026, an increase from $8 billion in fiscal year 2025, primarily for theme park and resort expansion. The company remains committed to returning capital to shareholders, having repurchased $7.2 billion in common stock year-to-date and targeting at least $9 billion in share repurchases for fiscal year 2026.

Are there any significant acquisitions or divestitures that impacted the results?

The company reported the inclusion of financial results from the Fubo and NFL Transactions. The Fubo Transaction, which closed on October 29, 2025, involved combining certain Hulu Live TV assets with Fubo, with Disney holding a 70% economic interest. The NFL Transaction, completed on January 31, 2026, involved ESPN acquiring NFL media assets in exchange for a 10% noncontrolling interest in ESPN. These transactions had a notable impact on revenues and costs, particularly in the Entertainment and Sports segments. Additionally, subsequent to the quarter, Disney entered into an agreement to sell its 50% interest in A+E Networks for approximately $1.2 billion.

DIS 10-Q Quarterly Report Q3 FY2026 — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-Q filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.

Walt Disney Company's Q3 2026 (ended June 27, 2026) report shows a revenue increase of 7% year-over-year to $25.2 billion^a, driven by growth in its Entertainment and Experiences segments.

Despite the revenue growth, net income attributable to Disney significantly decreased by 50% to $2.6 billion, with diluted EPS falling to $1.51^b from $2.92 in the prior year quarter. This decline was primarily attributed to a substantial non-cash tax benefit recognized in the prior-year quarter related to Hulu's tax classification and, in the current quarter, an impairment charge on the investment in A+E Networks. The Experiences segment demonstrated robust performance with a 10% revenue increase, highlighting strong demand for theme parks and resorts.

However, the Sports segment saw a 17% decrease in operating income due to higher programming costs. The nine-month results also reflect a significant decline in net income attributable to Disney (down 34% to $7.3 billion^c) and EPS (down 33% to $4.12). This was also influenced by prior-year tax benefits and current-year impairment charges.

The company continues to invest heavily in its Experiences segment, with capital expenditures expected to be around $9 billion^d for fiscal year 2026, up from $8 billion in fiscal year 2025, primarily for theme park and resort expansion. Significant share repurchases continue, with approximately $7.2 billion in buybacks year-to-date, reflecting a commitment to returning capital to shareholders.

02—Key points

Key Highlights

Total revenues increased by 7% year-over-year to $25.2 billion for the quarter, and by 6% to $76.4 billion for the nine months ended June 27, 2026.
Net income attributable to Disney decreased significantly by 50% to $2.6 billion for the quarter and by 34% to $7.3 billion for the nine months, impacted by prior-year tax benefits and current-year impairments.
Diluted EPS attributable to Disney decreased to $1.51 for the quarter (vs. $2.92) and to $4.12 for the nine months (vs. $6.12).
The Experiences segment revenue grew by 10% for the quarter and 8% for the nine months, driven by strong theme park admissions and resort/vacation demand.
The Sports segment operating income declined by 17% for the quarter and 14% for the nine months, impacted by increased programming costs.
Restructuring and impairment charges were significant, totaling $900 million for the quarter and $1.1 billion for the nine months, primarily due to an impairment of the A+E Networks investment.
The company continues aggressive share repurchases, with $7.2 billion in buybacks for the nine-month period, and expects to repurchase at least $9 billion in fiscal 2026.

03—Questions

Frequently Asked Questions

What is the primary reason for the significant drop in net income and EPS year-over-year?
The primary reason for the significant decrease in net income attributable to Disney and diluted EPS is the comparison to the prior-year quarter. The prior-year quarter benefited from a substantial non-cash tax benefit of $3.3 billion related to a change in Hulu's U.S. income tax classification. In the current quarter, net income was impacted by an impairment charge of $812 million on the investment in A+E Networks.
How did the different business segments perform in terms of revenue and operating income?
Revenues saw growth across all segments: Entertainment (+6% for the quarter), Sports (+4%), and Experiences (+10%). However, operating income varied. Entertainment operating income increased significantly (+64%) due to higher subscription and affiliate fees. Experiences operating income also rose (+20%) driven by strong theme park and resort performance. The Sports segment's operating income declined (-17%) due to higher programming and production costs, despite revenue growth.
What is the company's outlook on capital expenditures and shareholder returns?
Disney expects capital expenditures to be approximately $9 billion for fiscal year 2026, an increase from $8 billion in fiscal year 2025, primarily for theme park and resort expansion. The company remains committed to returning capital to shareholders, having repurchased $7.2 billion in common stock year-to-date and targeting at least $9 billion in share repurchases for fiscal year 2026.
Are there any significant acquisitions or divestitures that impacted the results?
The company reported the inclusion of financial results from the Fubo and NFL Transactions. The Fubo Transaction, which closed on October 29, 2025, involved combining certain Hulu Live TV assets with Fubo, with Disney holding a 70% economic interest. The NFL Transaction, completed on January 31, 2026, involved ESPN acquiring NFL media assets in exchange for a 10% noncontrolling interest in ESPN. These transactions had a notable impact on revenues and costs, particularly in the Entertainment and Sports segments. Additionally, subsequent to the quarter, Disney entered into an agreement to sell its 50% interest in A+E Networks for approximately $1.2 billion.

04—Continue

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