Disney revenue up marginally in Q1 FY26; operating income slips on higher costs

The Walt Disney Company has reported a 5% rise in revenue in the first quarter of fiscal 2026, even as higher programming, production and distribution costs weighed on profitability. 

The total revenue for the quarter rose to $26 billion from $24.7 billion a year earlier, while total segment operating income declined 9% to $4.6 billion from $5.1 billion in the year-ago period. Income before income taxes stood at $3.7 billion, broadly in line with last year.

As per reports, in India, Disney reported a $28 million loss from its equity interest in its joint venture with RIL, narrowing from a $33 million loss in the corresponding quarter last year. The company had also recorded a $143 million restructuring and impairment charge related to the Star India transaction in the year-ago quarter. 

Within the Entertainment segment, revenue increased 7% year on year, but operating income declined by $0.6 billion to $1.1 billion, pulling operating margin down to 9.5%. The company cited higher content costs, marketing spend and technology and distribution expenses as key factors.

Subscription video-on-demand revenue rose 11% from a year earlier, despite a one-percentage-point adverse impact from the inclusion of Star India revenue in the prior-year quarter. SVOD operating income improved by $189 million to $450 million, translating into an operating margin of 8.4%.

Advertising revenue declined 6% year on year, reflecting an 11-percentage-point adverse impact from Star India and higher political advertising in the year-ago period. This was partly offset by the inclusion of the Fubo transaction in the current quarter.

The Sports segment reported operating income of $191 million, down $56 million from Q1 FY25, as higher advertising revenue was offset by increased programming and production costs, lower subscription and affiliate fees, and a temporary suspension of YouTube TV carriage, which had an estimated $110 million adverse impact.

The Experiences segment delivered a record quarter, with revenue reaching $10 billion and operating income of $3.3 billion. Domestic Parks and Experiences operating income rose 8%, supported by higher attendance and increased per-capita spending.