Disney delivers a banger year for parks, even as a box office bust bums out Wall Street

In a year when Hollywood struggled to find its footing and "macro uncertainty" dented many consumer-facing businesses, Disney’s theme parks and streaming service nevertheless carried the company to a strong 2025 finish.

For the quarter ended September 30, Disney reported revenue of $22.5 billion, flat from a year ago, and adjusted earnings down 3%. For the full year, revenue rose 3% to top $94 billion, while adjusted EPS jumped 19%. Net profit reached $10 billion, up 36%. Free cash flow climbed 18% to just over $10 billion.

But the headline numbers belie even more interesting trends under the hood. Let's take a look.

Mega year for the parks business

Disney’s all-important Experiences division — which houses its theme parks, cruises, and consumer products, i.e. toys — remained Disney’s financial anchor. Operating income from this segment rose 13% for the quarter and 8% for the year to a record $10 billion, driven by strong demand at both domestic and international parks — surprising given the trade wars and cloud of “macro uncertainty” mentioned on so many earning calls throughout the year. In a year when consumer confidence has wobbled and political and economic uncertainty dominated headlines, near 10% growth in domestic parks is extra impressive.

Cruise bookings hit records, too, and consumer products revenue surged 14%, led by a $4 billion Stitch-merchandising bonanza.

How the movie slate performed

While the live-action Lilo & Stitch remake provided one of Disney’s biggest merchandising wins in years, the absence of a superhero or Star Wars tentpole meant the company’s box-office numbers fell for the year, even as Zootopia 2 and Avatar: Fire and Ash are set to land late this year, in the company's fiscal 2026. Wish 2 and Pixar’s Elio performed solidly but not spectacularly — turning a profit, if never becoming juggernauts.

Against the weaker year for the box office, Disney’s streaming services more than delivered. Its direct-to-consumer business posted a $1.3 billion annual profit, reversing a loss just two years ago, with Disney+ and Hulu now counting nearly 200 million combined subscribers. Overall, the Entertainment segment’s overall income fell 35% in the quarter, reflecting lighter theatrical output and a 26% decline in content sales.

In Sports, ESPN’s advertising revenue rose 8% amid strong NFL and college-football viewership, offsetting higher costs tied to the launch of its standalone streaming service and enhanced app. As if to celebrate, CEO Bob Iger appeared on ESPN 2 on Thursday morning.

Disney magic equals cash for shareholders

Should it surprise anyone that the company’s physical or IRL magic — parks, cruises, and merchandise — remains its surest moneymaker in an economy where AI is upending digital work and content creation alike? For now, Disney’s greatest trick may be that it can keep selling human-made dreams at a premium.

In any case, it's exactly the sort of premium that pays off for shareholders. In the release, Disney announced it’s raising its dividend 50% to $1.50 a share and doubling buybacks to as much as $7 billion in fiscal 2026, while forecasting double-digit earnings growth next year. These could be moves designed to nudge Disney’s stock toward performance more in line with the actual performance of the business — a weird disconnect in recent years.

At least initially, however, Wall Street looked more worried about box office than happy about the dividend cash. Shares of Disney fell about 5% heading into Thursday's market open.