Disney Reports Strong Q2 Revenue Growth as Streaming Business Turns Profitable
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Disney reported a 7% increase in revenue to $25.17 billion for its fiscal second quarter, with its streaming business for Disney+ and Hulu achieving a 10.6% operating margin. The company is focusing on making Disney+ central to the fan experience, as linear TV revenues decline. Executives forecast continued growth in earnings per share and operating income for the year ahead.
Facts First
- Disney's Q2 revenue grew 7% to $25.17 billion, exceeding analyst estimates.
- The Disney+ and Hulu streaming business turned profitable, with operating income up 88% to $582 million.
- CEO Josh D’Amaro aims to make Disney+ 'more central' to how fans experience the company's brands.
- Disney Experiences revenue rose 7% to $9.5 billion despite a 1% dip in domestic park attendance.
- The company will not proceed with a planned $1 billion investment in OpenAI following the shutdown of the Sora project.
What Happened
Disney reported financial results for its fiscal second quarter, ended March 28, 2026. Revenue increased 7% year-over-year to $25.17 billion, surpassing analyst expectations. While net income fell 31% due largely to a higher tax bill, adjusted earnings per share rose 8% to $1.57. A key development was the profitability of the core streaming business; revenue from Disney+ and Hulu rose 13% to $5.49 billion, and operating income for those services increased 88% to $582 million, achieving a 10.6% operating margin. This growth was driven by price hikes implemented in the fall of 2026. In contrast, linear TV revenues are declining.
Why this Matters to You
If you are a Disney+ or Hulu subscriber, you may see the company continuing to refine its apps and recommendations to keep you engaged, as it has recently revamped the user interface and improved personalization. For investors, the company is targeting significant share repurchases and forecasting earnings growth. As a consumer of entertainment, you can expect a pipeline of new content including major theatrical releases like 'The Mandalorian & Grogu' and streaming premieres like the final season of 'The Bear'. The company's decision not to invest in OpenAI's Sora means you are unlikely to see official AI-generated animations of Disney characters in the near future.
What's Next
Disney expects its entertainment streaming business to maintain at least a 10% operating margin for the full 2026 fiscal year. For the current quarter ending in June, the company forecasts total segment operating income to increase 16% year-over-year. However, ESPN's operating income is expected to decline by 14% in that period due to rising programming costs. Looking ahead, the company's leadership appears to be focusing on its direct-to-consumer future, with CEO Josh D’Amaro stating a goal to make Disney+ more central to the fan experience, potentially integrating it further with other parts of the business like theme parks.