The world’s largest entertainment and licensing conglomerate showed this week it’s coming back strong from the pandemic, posting solid revenue numbers and exceeding expectations for its new streaming services.
Disney reported fiscal third-quarter results Thursday that not only beat Wall Street’s estimates, but also showed impressive user growth for Disney+, making it the primary competitor for the streaming crown now worn by Netflix.
Disney posted revenues of $17.02 billion, compared to the $16.8 billion expected, according to the consensus projections compiled by Bloomberg.
However, for Disney and its investors, the company’s nearly two-year-old streaming platform Disney+ is the most critical metric, as it marks a major part of the company’s forward strategy. Again, the news was all good.
Total subscribers at Disney+ grew to 116.0 million, handily exceeding expectations for a total of 113.1 million. Also notable is the fact Disney+ grew to more than 100 million subscribers in less than two years, since launching in late 2019.
“We ended the third quarter in a strong position, and are pleased with the company’s trajectory as we grow our businesses amidst the ongoing challenges of the pandemic,” said Disney CEO Bob Chapek. “We continue to introduce exciting new experiences at our parks and resorts worldwide, along with new guest-centric services, and our direct-to-consumer business is performing very well, with a total of nearly 174 million subscriptions across Disney+, ESPN+ and Hulu at the end of the quarter, and a host of new content coming to the platforms.”
And it’s not just Disney+. The House of Mouse owns other SVOD services, and they too are doing well. For example, ESPN+ grew subscribers by 75% year-over-year in the third quarter to 14.9 million, with a stronger lineup of live sports helping boost viewership.
In terms of films, Marvel names including Loki and Black Widow saw success both in theatrical releases and on Disney+, offering another major positive for Disney’s business during the quarter.
All of that said, Disney did suffer during the pandemic, particularly in terms of revenues from its legendary and reliably profitable theme parks and resorts, which were shut down for a prolonged period during the pandemic.
By the end of the third quarter, all of Disney’s global theme parks had reopened, including Disneyland Paris and Disneyland in California, which had still been closed earlier this year.
While visitor numbers are still below pre-pandemic levels, the reopenings have allowed this traditional revenue generator to start adding significantly to the company’s bottom line. Disney’s parks, experiences, and consumer products business segments have all swung back to an operating profit of $356 million during the quarter ending on July 3, after posting a loss of about $1.9 billion in the same three-month period last year.
That recovery is just as important for Disney licensees. Typically, Disney drives its consumer products through its unparalleled ability to promote them in films, through theme park visits, and now through TV series streamed on Disney+. Without the theme park business, Disney’s CP division had suffered compared to pre-pandemic numbers.