10-Q · May 6, 2026
Disney reported Q2 2026 revenue of $25.17 billion and EPS of $1.27, both falling short of analyst estimates. Revenue grew 7% year-over-year, driven predominantly by the Entertainment segment, whereas net income and EPS…
Earnings analysis · 10-Q
DIS earnings analysis
Filed August 5, 2026 · Our reading of the company's report
The latest report
Disney delivered 7% revenue growth to $25.248 billion and lifted total segment operating income 21% to $5.555 billion, led by Experiences and Entertainment. GAAP EPS nevertheless declined 48% to $1.51 because the prior…
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Disney delivered 7% revenue growth to $25.248 billion and lifted total segment operating income 21% to $5.555 billion, led by Experiences and Entertainment. GAAP EPS nevertheless declined 48% to $1.51 because the prior year benefited from a $3.277 billion Hulu-related non-cash tax benefit and the current quarter included $900 million of restructuring and impairment charges. Experiences momentum and a $9 billion fiscal-2026 repurchase target are constructive, but Sports profitability, rising borrowings and heavier capital spending temper the outlook.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
From revenue to operating profit
Where each $100 of revenue went in this report.
Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $1.51
What stood out
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Revenue grew 7% and gross margin expanded
Revenue rose 7% year over year to $25.248 billion, including 7% service-revenue growth to $22.675 billion and 6% products growth to $2.573 billion. Gross margin expanded to 40.2% from 38.6%, as cost of products fell to $1.432 billion from $1.498 billion despite higher service costs.
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Experiences profit increased 20%
Experiences was the largest contributor to operating-income growth: revenue increased 10% to $9.968 billion and operating income rose 20% to $3.017 billion. Resorts and vacations revenue grew 17% to $2.766 billion, supported by 10% more passenger cruise days.
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Entertainment operating income rose 64%
Entertainment operating income increased 64% to $1.680 billion on 6% revenue growth to $11.345 billion. Subscription and affiliate fees rose 12% to $7.545 billion, while SG&A declined $187 million to $2.301 billion on lower marketing costs.
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Operating cash flow remained above $12.5B
Nine-month operating cash flow was $12.515 billion, down $1.112 billion from $13.627 billion, but remained substantial. Cash flow was pressured by higher income-tax payments and higher sports-content spending, partly offset by higher cash receipts at Experiences and Entertainment.
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Share repurchases accelerated sharply
Disney repurchased $7.245 billion of stock, or 68 million shares, in the first nine months, versus $2.496 billion and 24 million shares a year earlier. It had authorization for approximately 271 million additional shares as of June 27, 2026.
What to watch
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GAAP earnings declined on tax comparison and charges
GAAP diluted EPS fell 48% to $1.51 from $2.92, and Disney-attributable net income fell 50% to $2.638 billion. The comparison includes a $3.277 billion prior-year non-cash Hulu tax benefit, while the current quarter absorbed $900 million of restructuring and impairment charges.
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Sports profit fell as rights costs rose
Sports operating income declined 17% to $858 million despite 4% revenue growth to $4.500 billion. Programming and production costs rose 10% to $3.050 billion, driven by contractual rate increases, new rights and the NBA-renewal timing shift.
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Debt and working-capital demands increased
Cash and cash equivalents declined $510 million to $5.185 billion since September 27, 2025, while total borrowings increased $4.015 billion to $46.041 billion. Receivables increased $1.336 billion to $14.553 billion and the current-liability excess over current assets widened to $10.213 billion from $9.895 billion.
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Higher capex reduced free-cash-flow conversion
Capital spending increased to $6.780 billion in the first nine months from $6.108 billion, principally from Experiences investment, while operating cash flow fell to $12.515 billion. Implied nine-month free cash flow was $5.735 billion, down from $7.519 billion.
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Distribution negotiations pose blackout risk
The updated risk factors cite fiscal-2026 distribution-renewal risk after NFL Network and NFL RedZone were removed from Comcast Xfinity in the third quarter, with service not reinstated. Disney also entered sports-rights licenses needed to operate NFL Network and RedZone through 2033, increasing the importance of distribution economics.
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Securities litigation exposure has broadened
Legal-risk disclosures expanded: the securities class-action trial is set for November 16, 2027, and ten shareholder derivative complaints have been filed. The filing states that Disney cannot reasonably estimate potential losses for these matters.
Management's outlook
No numeric revenue or EPS range was provided in the 10-Q. Disney expects approximately $24 billion of fiscal-2026 produced and licensed-content spending and approximately $9 billion of capital expenditures, and is targeting at least $9 billion of fiscal-2026 share repurchases.
Earlier filings 4
10-Q · February 2, 2026
The Walt Disney Company's Q1 2026 10-Q report shows a 5% increase in revenue year-over-year, totaling $25.98 billion, although net income declined by 6% to $2.4 billion driven by higher costs and reduced operating…
10-K · November 13, 2025
The Walt Disney Company reported FY 2025 results demonstrating a revenue increase of 3% to $94.43 billion, alongside a notable rise in net income to $12.4 billion, leading to a significant EPS of $6.85, up from $2.72 in…
10-Q · August 6, 2025
The Walt Disney Company reported a strong Q3 2025 with revenues of $23.65 billion, marking a 2% increase from the prior year. Diluted EPS soared to $2.92 from $1.43 a year ago, fueled by significant tax benefits and…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.