The Walt Disney Company reported a 2% year-on-year revenue growth in the third quarter of fiscal year 2025, with total revenue reaching $23.7 billion, up from $23.15 billion in Q3 FY24
While domestic sports advertising showing resilience, the House of Mouse posted a $50m equity loss from its India joint venture with Reliance, following the deconsolidation of Star India in late 2024. The network’s “exit” from the Indian market was the principal reason for a sharp 92% drop in revenue from its international linear business, falling to just $12m from $157m in Q3 FY24.
With Disney’s Indian entertainment and sports businesses no longer consolidated into its results — including ad-rich properties like Disney+ Hotstar and the Indian Premier League — the company saw a sharp drop in profit contribution from its international linear operations. Revenue from international linear networks also dropped by 58%, from $518 million to $219 million.
The domestic linear networks business also faced pressure, with advertising revenue dipping due to reduced average viewership and lower ad rates. Combined with subscriber attrition and pricing challenges, this led to a 28% drop in total Linear Networks operating income, which stood at $697 million for the quarter.
On the plus side, a key highlight the quarter was the 3% increase in domestic advertising revenue for ESPN, powered by higher ad rates despite slight drops in viewership. This contributed to a strong quarter for Disney’s sports segment, which reported $1.03 billion in operating income, marking a significant 29% year-on-year increase. Higher affiliate fees and robust ad performance underscored the continued appeal of live sports for advertisers.
The entertainment segment, which includes Disney’s linear channels, streaming platforms, and studio operations, posted flat revenues at $10.7bn, but saw operating income decline by 15%, to $1.02bn, compared to $1.2bn in Q3 FY24.
In the direct-to-consumer (DTC) segment, which houses Disney+ and Hulu, revenue grew by 6% to $6.18bn, though advertising revenue declined, reflecting lower rates and a lack of premium sports programming, such as ICC events, which had boosted ad impressions in Q3 FY24. Still, the segment achieved a notable turnaround in profitability, with operating income reaching $346m, compared to a $19m loss last year. Lower programming and marketing costs, coupled with increased subscription revenue, helped drive the improvement.
Despite the softness in DTC ad revenue, monetization per user saw healthy growth. Disney+ (U.S. and Canada) average revenue per paid subscriber (ARPU) rose from $8.06 to $8.09, while international Disney+ ARPU grew from $7.52 to $7.67, aided by favorable exchange rates and pricing. Hulu SVOD-only ARPU increased slightly from $12.36 to $12.40, and Hulu Live TV + SVOD rose to $100.27, reflecting strong advertiser interest in premium bundled content.
“We are pleased with our creative success and financial performance in Q3 as we continue to execute across our strategic priorities,” said Disney CEO Bob Iger. “The company is taking major steps forward in streaming with the upcoming launch of ESPN’s direct-to-consumer service, our just-announced plans with the NFL, and our forthcoming integration of Hulu into Disney+, creating a truly differentiated streaming proposition that harnesses the highest-caliber brands and franchises, general entertainment, family programming, news, and industry-leading sports content. And we have more expansions underway around the world in our parks and experiences than at any other time in our history. With ambitious plans ahead for all our businesses, we’re not done building, and we are excited for Disney’s future.”
