Disney's Q1 2026: Streaming Profits Soar 72% as 'Zootopia 2' and Parks Drive Revenue, But Subscriber Counts Go Dark
Walt Disney Co. kicked off its 2026 fiscal year with a solid revenue beat, driven by the historic box office run of "Zootopia 2" and resilient theme park attendance, even as the media giant makes a strategic pivot toward emphasizing streaming profitability over subscriber growth.
For the quarter ended December 27, 2025, Disney reported total revenue of $25.98 billion, a 5% increase that surpassed analyst expectations. The company's direct-to-consumer streaming business, encompassing Disney+ and Hulu, posted a striking 72% jump in operating income to $450 million, signaling a continued march toward sustained profitability in the competitive streaming arena.
The entertainment segment, fueled by the animated sequel "Zootopia 2"—now the highest-grossing animated film of all time—and James Cameron's "Avatar: Fire and Ash," saw revenue rise 7%. Concurrently, Disney's Experiences division, covering parks and consumer products, set a new quarterly record with $10 billion in revenue, a 6% year-over-year increase.
However, the quarter was not without its challenges. Overall operating income dipped 9% to $4.6 billion, pressured by rising content costs and increased marketing spend for a heavier film slate. The linear television business, including ABC and cable networks, continued its secular decline, with ad revenue softening partly due to reduced political advertising compared to the 2024 election cycle.
In a significant shift for investors and industry watchers, Disney has officially stopped disclosing subscriber figures for Disney+ and Hulu, a move first announced in August 2025. The company stated these metrics have become "less meaningful" for evaluating business performance, echoing a similar decision by Netflix earlier last year. This marks a broader industry turn from the "streaming wars" focus on user growth to a emphasis on margin and financial sustainability.
"Our results reflect the tremendous progress we've made in transforming our company for the future," said CEO Bob Iger in a statement, highlighting the cross-franchise value generated by hits like "Zootopia 2." The board is reportedly close to naming Iger's successor, with Disney Experiences chairman Josh D'Amaro emerging as the leading candidate to take the helm before Iger's contract expires at the end of 2026.
The quarter also included a $307 million non-cash tax charge related to Disney's October 2025 merger of its Hulu + Live TV assets with Fubo, in which Disney now holds a 70% stake.
Industry Voices React
Michael Torres, Media Analyst at Crestwood Advisors: "The 72% streaming income growth is the headline here. It validates the price hikes and cost discipline. Stopping subscriber reporting is a logical, if frustrating, step—it forces the market to judge them on the quality of earnings, not just user acquisition at any cost."
Sarah Chen, Portfolio Manager at Longview Capital: "The parks' $10 billion quarter is astonishing. It shows the enduring power of the physical ecosystem. The streaming profit surge is promising, but we need to see if that margin expansion can continue without the transparency of subscriber adds. It's a black box now."
David Feldspar, Editor, 'The Media Critic' Blog: "This is corporate obfuscation, plain and simple. They're hiding the numbers because growth has likely stalled. 'Less meaningful' is corporate-speak for 'embarrassing.' They want a victory lap on profitability while sweeping the stagnation in actual audience reach under the rug. Investors should be furious."
Priya Sharma, Professor of Media Economics, Stanford University: "This earnings report encapsulates Disney's dual transition: from linear to streaming, and from growth-at-all-costs to profitability. The sub-count blackout is a maturation moment for the industry. The real story is whether the parks and film studios can consistently offset the linear TV decline during this transition."