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DIS Walt Disney Co (The)

Participants
Lowell Singer Senior Vice President of Investor Relations
Bob Chapek Chief Executive Officer
Christine McCarthy Senior Executive Vice President & Chief Financial Officer
Ben Swinburne Morgan Stanley
Alexia Quadrani JPMorgan
Michael Nathanson MoffettNathanson
Jessica Reif Ehrlich BofA Securities
Doug Mitchelson Credit Suisse
Kannan Venkateshwar Barclays
John Hodulik UBS
Brett Feldman Goldman Sachs
Call transcript
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Operator

Good day and thank you for standing by. Welcome to the Walt Disney Company's Second Quarter 2021 Financial Results Conference call. At this time, all participants are in a listen-only mode. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker today, Lowell Singer, Senior Vice President of Investor Relations. ahead. go Please

Lowell Singer

welcome XXXX and Walt Company's Disney Good call. to quarter earnings second afternoon, The

Our issued Today's release be on being press was and available our is ago webcast website available on and our at transcript www.disney.com/investors. a call website. also about is will XX minutes

are We again today’s hosting once remotely. call

Senior remotely and Chief President are me Chief joining Vice Chapek, Disney's Executive Officer. Executive Officer; So Bob and Christine McCarthy, Financial

and Bob we'll happy Christine, questions. Following comments from to be your

Bob, turn me well the let and that, to we started. over with So get call

Bob Chapek

Thanks, months good we've remain adjusted recovery make as with the afternoon, encouraging to growth. continued our busy businesses of fueling focused while laser Lowell, ended everyone. across and quarter to last of to XX% compared It's then, and see EPS a to been progress we across signs pleased We $X.XX, our fiscal long-term few our $X.XX company. we've also ongoing been on second recovery, more since year. And

continues Our in strategic three focus areas. key

direct-to-consumer. with We've pleased Star markets been we've launched Disney+ engagement those internationally. And markets number and streaming in in today. a offerings, growth of is and the First our successfully

steady content, our collection to we exhibition, I'll consumers are along and talk library the of high-quality new monitoring robust recovery existing us cadence begin subscribers theatrical specifics theatres, later. continually as titles the with allows and more new same to time, of of attract to retain Our At branded about ones. the also return closely

some enhance mandated in strategies, time, to months, innovations, ongoing guest advantage the ticketing our And Disney technology the new the restrictions. the Line. the to experience and our to we've vaccine, government of other opportunity the are focused taken operating the through of Cruise developments this procedures of use lifting make improvements of through rollout offerings. parks recovery on recent been business have and we the and with of gradual of Finally, ongoing particularly There resumption encouraging

are safety welcomed see the ago. and closed State feel members fantastic recently and cast being It's the back and been to be our on faces able guests' so XXX able joy Disneyland, for we been X operate excitement to back and excited We the the Main stood I weeks overwhelmingly cast furloughed in health quickly USA Bob especially than Street And has guests days, see was first more we air. it Disneyland our day, work. opening of wonderful cast on recall to response and that to and on were requirements. after to California's at Most XX,XXX the them retrain to to at new positive.

the We're also kicked announce at celebration. make pandemic are levels. on and we're for Disneyland continue Kong The voyage reopening live will Disneyland, bookings by will cruise above May yearlong a encouraged soon. with park The ship Resort, unveiled a anniversary off Paris phenomenal. Despite date its a Disney water to is AquaMouse X.X where to FY able Hong progress current operating maiden I the Disney times. just sail see viewed to all we parks which We capacity strong are reduced including on projects ship, demand recently of excited ride, It's The the guests Disney are XXXX World been Shanghai set safety levels open also from state-of-the-art are at Disney or sea. At the and it around near newest million Avengers quarter. Disney Disneyland our continue growing We a Wish Disney California for at to our at open that on includes attraction the and at clear confidence our general the visit has attractions our in get new virtual protocols. nearly they the X. we set XX. is what public or at be to Wish had in world, highly ever to on consumers number their and and magic first experiences and seeing June presentation 'XX hopeful multiple Disney stream at public back Xth Walt the our is of chance the have the anticipated we both Adventure extraordinary to to Campus, as experiencing to amazing the they truly recently we and

actress, On with at be significantly creation ramping since fuel entertainment we the platforms. Oscars guidance a full XX also distribution first example Century Searchlight gradually studios and and best Chloé the becoming Awards are provided Nomadland with of and XX proud our color are wins win Investor steady We're That's pictures, pleased XXXX and Searchlight's Day. where to films across side, to total. respectively. of XXth best we woman increasing all of best and XX to best they Academy five the studio took home reach An our consistent general state will director, the of our we offerings content Zhao this up picture are nearing output award production at that for incredibly levels, and picture. is in

I'm Feature with which Best Hulu. Score. Animated of on Studio's Additionally, Soul took continues animated and are Original on millions to award that the Soul, winning Best films home able and record And now happy Oscars enjoy Disney+ to say Nomadland Pixar's for masterpiece stellar

with offering Releases to a our Access, and releases releases. And As exclusive traditional Premier a key straight in for is have approaches Disney+ we we strategy. consistently Disney+ stated, distribution our theatrical outlined three via have component flexibility simultaneous theatres of distributing films.

events. our be our where the movie theatres and Premier exclusive Disney+ by our Access Access filled tremendous Legend film DTC be confidence of and Rings released be via of with with theatrical Guy as anticipated of a has will the originate, of the May September on Century's The Black in The Disney+ upcoming on Jungle and episodic and slate. These going; hilarious zeitgeist. Cruella platforms. on films up Marvel's only Widow June library of The Shang-Chi must X, be and XX. Marvel's theatres films, XXth the theatres the Ten exclusively content XX in course, July and Like roof. comedy Soldier. Disney+ I'm XX, signs on the watch Disney+ all anticipation Premier part but via XX. July two via XX-day original amidst how through X on Here's and that to the by highly Marvel's action Premier released of today cultural be adventure translates on Mandalorian and success in will of Pixar's not Falcon Disney+ released followed will been Access which to this immediate of Cruise, become part X, robust our series Starting series will Luca, on for at followed And hits, August newest will on have Winter and and June Loki, WandaVision regardless announce Disney's And Free increased respectively. series available which pleased the adventure on our end expedition they of will films, exciting became consumer recent window in debuts

at Musical: name also based and adult on the months, to of are Monsters book next High all few. the The the Society Disney+ the The series, Series, Benedict School just second popular series animated Work new in couple Musical: Mysterious to young season of coming The The a

high-quality, the deliver fiscal entertainment. reflected are the Disney+, we of franchises in and which with one million of consumers the subscribers that of clearly second content quarter. success the in most uniquely continue amassed And want. We XXX positioned the paid to compelling nearly a kind of brands as end That's

achieve by on to the XXX of XXX of guidance our track end XXXX. subscribers to million are We fiscal million

portfolio cycle, Looking Conor our increased get that's XX streaming programming lineup, both we Not the and in X to subscribe Season third Championship, with we the we the United series production expect Hulu levels are and to X who have there's live without on million the available Story rights the at engage of sports to pay-per-view, between more are including audience On sporting popular of additions growth Hulu Marvel's our more and leaving award July Wimbledon, the to Season content additional and component Disney+, Holiday, football pleased XX. wildly resumed lightweight ESPN+ events, the past also fuel and we of includes McGregor great thousands anthology And ESPN+ new of very output Viewers are in the launched on and on portfolio Hulu sub of paid entire the May Love, continues to a anticipated and and at March, to more normalized that million disciplined Dustin XX, on lots full on progress. early American Hulu, ever Poirier for the original admits end including animated film, Horror series, unrivalled and winning by highly content the to help UFC the on respectively, documentaries sports ESPN+, a ESPN+ Hulu States In environment. Handmaid's able we its Victor, original. final as will even challenges content buzz-worthy XX. and Live Hulu of Hotstar. original watch ESPN+, the services, shows, The with very way. the across to hit premiered which the to the mention by boost of FA a and matchup biggest subscribers, and coming had May followed PGA Tale, Hulu our XX.X Season on series fall. with including incredible And performance, airing vs. our The of XX.X Billie important the Hulu. Championship on year, Cup M.O.D.O.K., build FX and quarter. Hulu, ESPN+ college pay-per-view continued NHL ESPN+ a business. of live match Hulu the UFC

very the business, of out value linear important with address both every supportive company, number our considering of and and our mind, this sports overall is economic part our play direct-to-consumer building are we've ESPN+ as portfolio. a components. still we're reached While accretive a in we DTC role specific With strategy long-term that deals each for we the strategy of offering given the our make, deal linear very also

weighted include are digital the more others UFC, and deals, Bundesliga, agreements and linear emphasis reflecting the a on direct-to-consumer. SEC with significant Some an such as the PGA component, Tour, with NFL NHL. towards the These

live in of than sports For additional a La Card submitting best night the on club out must Messi. English with is will of sole deals. football, all of world, hockey simulcast opening deal We've players fans. to leagues of leader through option ESPN+'s a popular two with and in value potential Spanish a ESPN+, us part annually. language NHL, for will the XX anticipated X,XXX example, top the world's Overall, and sports, and live are to La X,XXX We've leagues, U.S., clubs Baseball covering Christine and quarter. believe move for with games, deal, for to baseball which a And home offering we destination the most of confident deal the Lionel when continue have When be the are in digital exclusive clear fans and plus the way the in Liga. we our is the the our confident that, soccer Games most tremendous will today, the content, And signed encouraging are and of market National Liga pleased Company, serving soccer on ESPN future. we be and assets two and reached and now MLB Liga games, of as results La direction expanded agreement businesses, NHL our Disney growth. Liga made in engaging more Hulu, of Series season this a number I'm position the right the the including Hulu. and multi it more We season. it's both La August. unparalleled games, as top possible. the talk matches with deal in League of Sunday ESPN+, And platform also per it combine ESPN+ XXXX recovery social available rights networks best XXX sports fans the ESPN+ we've signs live division this one and world, and ESPN+. the night our the comes in of I'll X-year turn bolsters of now you with our highly top matches X-year exclusively rights than include historic from season to Coverage over in into Spanish for the a beginning ESPN, highly provide that deals ABC the our And the power matches and for excited Major brings she'll one about rights absolute with announce rights more per rights, the Disney And as effective Wild coverage host XX service regular depth future to in to across XX renewal a further Walt

Christine McCarthy

you, Bob, Thank afternoon, everyone. good and

XX% for share. fiscal quarter $X.XX Excluding share second versus prior certain per items, diluted increased the to earnings year the per

of impacts year progress beginning to of many see pandemic. a are our We after than the from businesses in adverse more

versus Networks, channels, lower increased the and at domestic income programming this increase the partially ESPN's walk and the revenue. of quarter ESPN guidance to income we growth are our second and last higher businesses. operating and of due both College Football increased offset driven programming segments I by At At segment The results was both our quarter, this affiliate through woods production was to and of advertising XX% production we at to due across in quarter. were domestic year. in the results largely revenue Linear Media costs channels. results most DMED both Operating Higher not significant timing and was with Entertainment international lower cable contributor While our business. the and out broadcasting lines we by quarter with cable at versus yet, segments, by by of were starting will results by gave and growth with Distribution. the cables in driven decrease line prior costs Playoffs. pleased the the DPEP prior the our the all higher at results the year, are

Football benefiting were fiscal CFP significantly CFP prior quarter lower to quarter, Bowl and ESPN own three timing in lower At revenue significantly second benefited we year. viewership. Academy Awards last quarter driven and average Freeform. On key the shift driven domestic by the impact said owned of last Lower advertising political timing offset impacted compared mentioned primarily took and ABC, College affiliate expected programming, due in the year advertising we last programming call, were shift prior national broadcasting, revenue. from domestic revenue game. game, this only production by second due our Championship offset Awards partially higher advertising at the National programming for Academy pacing television timing timing Awards, lower earnings versus by Programming As Playoffs. lower of to partially Lower at for year's stations costs QX to production higher championship prior in and the ESPN, Cable partially quarter production compared broadcasting Academy primarily revenue other the at decrease results negatively in production to and date, higher lower year. costs live we and events Bowl were the was revenue stations. our the quarter, also at sports at was in by the costs lower average addition of driven advertising decreased rates. the lack lower by third the programming Quarter growth one in quarter ABC, costs by of the offset QX viewership the live the results COVID. year, the quarter ratings advertising which up revenue to at four place from costs lower games advertising included year to in the the the programming At is and and sporting would currently At a versus significant cable by

due partially channel points revenue. overall quarter in which This broadcasting than past Total quarter, due domestic factors. international affiliate marketing offset rates, was Advertising impacts play driven million in with other quarter offset Paid this as to series, of business due adverse in specific the Hulu subscribers, Operating QX, international and the offset spend of number costs closures expansion of the a X% to at international well DTC from Hulu shifts. million Live million year. due due a as higher $XXX TV affiliate of in partially due we to at MVPD impact. a over rather to ESPN+. our were increased in BCCI to driven digital those Hulu addition the and results continue shifts end than results in XX.X see first over of primarily timing technology million to increase programming quarter. which UFC unfavorable X Hulu, results our some the declined service. year subscribers to quarter, increase the subscribers. to in The stronger inclusive Live increase in the Lower percentage Live we in and by to results our and content quarter. took we decline cricket in of impact lower timing to At to from the second X At was revenue by attribute revenue comparable revenue, growth to at improved the channel and lower being modestly to end as QX, higher channels the the matches, an offset production related were results year of at quarter to smaller by did Lower to were ESPN+, were year ESPN+ of Star, costs from from business our seasonality. X operating year the we was a growth in production direct-to-consumer the foreign cost XX.X the Hulu costs. X.X paid point Disney+, higher take to subscriber XX.X million subscriber revenue, programming had from by an production of of price advertising in place by subscribers was affiliate benefit closures we a higher December, channels a allocated over the out, COVID as in to revenue driven as largely timing increase content, a While at addition higher Disney+ up and decrease ended higher of by increased marketing versus an were currency programming networks generally million costs expected, due decrease driven and and related prior quarter increase and events. an results in businesses, pay-per-view increased revenue service. new subscribers year modest the improved prior primarily second by but paid $XX due the by by growth addition At second advertising Hulu

paid that As Bob announced mentioned our earlier, we global we the Annual reached paid March. the quarter. at end XXX had early million At in almost we subscribers. XXX We million have reached second milestone subscribers Disney+ of Meeting,

in that quarter. in success added we no in major end price of attribute the And EMEA a at months. this increase domestic the month the towards X than launches, increase So faster second a we was despite the price the did to and slate. The quarter a Hotstar content end many base and market strength last We subs of the of the QX strongest pace Disney+ first of the in contributor of Hotstar. making second of additions, quarter. Between net up as of continued and Disney+ Star to subscriber markets entertainment total subscriber launch approximately growth offering third was a general Disney+ the the the our overall QX, of the

as due and the was to Disney+ result first matches COVID versus at in ARPU lower significantly IPL of cricket advertising However, India. impact a revenue Hotstar the the of quarter timing of down

fiscal in on The April As no quarter in current the overall given ARPU tournament a IPL and QX took place began situation last suspended in QX. week, and IPL fiscal reminder, there India. the tournament X, was Disney+'s majority QX $X.XX. were the this prior was of games COVID in

$X.XX. Excluding Disney+ Hotstar, was it

we've year, content. prior SVOD increase we in income the sales to income and offset to by sales As we primarily content, results the current home due ARPU This world. results film at results. at home TV The sales by from second and lower period and of ESPN+ SVOD year. Content of better-than-expected we entertainment sales driven on decrease in to the start releases Higher Actual in content entertainment impairments operating the the the offset advertising second results licensing upside, to operating in quarter quarter and prior programs Disney+ driven lower profitable increased QX. TV quarter, versus by the direct-to-consumer was the expense partially of guided content price Hulu were an year a move of pay-per-view year, decrease due was lower write-offs. lower around significantly taken due by episodic absence to title higher other came significant results results. better more in Last of the remainder improving sales benefit partially should modestly in and the prior through Hulu from DMED versus increases Disney+ marketing and income versus see in

as and at Experiences consumer decreased Moving year-over-year COVID-XX. on DPEP's at than income to lower second $X.X the Parks offset of segment. Products results our and growth by to billion due more products operating by impacts Experiences quarter in was the Parks

March affected XX whereas compared Resort adversely of closed of Resort COVID-XX Paris business Cruise to Disney and year approximately prior quarter, second opened quarter, products and Walt Hong and capacities increases year reduced Shanghai was due open days income all operating Resort, operating World the Resort prior for quarter. approximately in our in year. second prior Disney the closures Disneyland to the businesses. XX by The consumer at the versus World games and and quarter. results the for closed were merchandising mid late were in in businesses QX. was March January. all during and the Disney year closed growth of licensing Shanghai mid for both Disneyland Parks prior were In Experiences our days related Kong these Our again closed Disneyland quarter,

and continued parks were the to Disney opened steadily XX, of and spending encouraged year. improve World at associated all are capita as reduced resorts Our prior that that double-digit revenue the At Resort costs quarter, the on contribution, significantly response. opening. during we objective Bob operated throughout net exceeded guest the a Walt the the per achieved positive variable with initial versus meaning yet earlier, Disneyland second quarter reopened by and capacities attendance guest very grew by again April mentioned trends

at the loosen. park government parks ramps strength of of restrictions for reservations and counts distribution bookings both optimism vaccine strong, domestic as well decline, demonstrating Case looking as our our Forward brands travel are growing as

entertainment we prior higher to a year. I Championship, a Looking standalone and billion Star like events, in Latin and At COVID. of costs we items are our third decline we European $X.X year's ahead, income which largely limited the in which expect Linear ESPN, versus of on marquee to year-over-year Networks, The we as plan Masters, direct-to-consumer production due the the Football to expect compares to increase general during by Plus, XX. last events This couple to and at business, August includes sports slate sports NBA, QX our League year QX there programming which Baseball, due launch had America now such significant of streaming would for At mention. quarter, service to Wimbledon, Major a operating

summer a including Championship allows games leverage international calendar, includes Libertadores, sports the soccer for Slam Moving of Copa the launch the strong prominent leagues, to European along to and tennis. soccer return League. Premier Grand the competition, regional which Liga, with late the us La

addition by right XXXX XXX Lowell As suspension first remain future. the to of subs, to COVID XXX Bob notwithstanding the fourth sub to for season, our the reach million happy we our paid in the of track half year. related million turn IPL in subs year, optimistic million to of mentioned that, our we the the half would fewer your powered We guidance very of the second earlier, Disney+ to Star XX And remain America I'll of adds the on net expectation decision fiscal take and launch with be Latin the to move questions. given Plus call quarter. the back about and now our over And

Lowell Singer

ready Okay. transition physically afternoon, all note questions me by to my Christine. to And operator, appropriate since And that we together with will Thanks, question. to that, the are the we not again directing once I your are Q&A, this as the do let for best we first moderate executive.

Operator

[Operator Ben Instructions] Our first question comes from Swinburne with Stanley. Morgan

line open. is Your

Ben Swinburne

$XXX the internationally could lot so cash positive have think forward quarter. on about flow year. to the inform landed cash I’m to Normally, the with Bob, you wanted your that flow might we're both. I I decision-making Christine, at and just kind think Star, Thank And wondering, and free forward price generated then a side, -- but for just bit U.S how how you ask, impact increases also of talk to on in or going expectations, in churn process for the free while, your cash back for price? both maybe you about mode generate just flow Maybe going guys in direct-to-consumer relative don't this if expect point, million little a you maybe cash free talk afternoon. Good we the it's starting Thanks. on of flow. quarterly been But a free the

Lowell Singer

on one you take question. first the Thanks questions. will the Christine will cash then flow Ben. Okay, for the Bob, response, price and take

Bob Chapek

All right.

to increase Of reacted course, we're extremely say EMEA. not observed were with In launched. the significantly I to since we've we that rate any price have our churn these pleased both. in market U.S., higher since first the the how price increased

added we've in seen actually six brand an our churn we improvement As as a Star rate. title,

makes it be those to to fairly feel price And think as tremendous relationship for a seem the increases. I world still going Disney+. value forward us we we that across price So resilient relatively bullish offer such,

Christine McCarthy

for reopened on Hi, with parks because but look have the Walt seeing those. it really to weekly. Disney parks versus also thanks versus pleased Ben, in upside year. impact year, at mentioned, I'm would cap fiscal that I actually as through the only our year But and comment we're direct-to-consumer like strong and cash that's it consider But flowing of businesses. I question. that I usually strong last a would say normalized it's We Land the flow we're seeing 'XX, from flow good this is we've numbers, more don't cash really since free that we're cash don't looking we're we World, it we're we at get the it also which tracking quite not growth per I and Disney the seeing a and yet, something

than the So from choppiness what is more some the this I be sports year those But say favorable off the two we last are year of planned rights year. elements to there more started expense did through would free this looking flow get we -- to of we had upside year. shifts expect timing to when But we're as some cash that we because at of the and year. a normalized we that kind for. year-over-year, And also

Ben Swinburne

Thanks a lot.

Lowell Singer

Operator, you. please. question next Ben, thank

Operator

from comes JPMorgan. with question next Alexia Quadrani Our

open. is line Your

Alexia Quadrani

or color -- on a and But up, as forward? Disney+ going provide the I as so attendance you gave to Is can Europe you Any growth for should the think target, lot the see Thank growth great how it's I'm internally is how of or the World. on can, terms markets How on drivers look start capacity, moving until parks. parks. how of seen into And up okay Walt you. really sub well around guys the impressive should Asia? to is thinking certain when more growth? the one to for eventually about One particularly if of really about just it then get you a cadence I for capacity, think follow-up, see around know other raising subscriber in long-term about on sort what step at guess on what main year. we your drops? we you we've streaming balance the at the seen Disney I the then major you far. growth And content far Eastern think it wondering, drivers we've if do you so details on or color in you're step of

Lowell Singer

Thanks you Alexia. do those? both for Bob, want both take Okay, of to questions.

Bob Chapek

Yes, I'll take both. them

one, going see first forward, terms the different drivers on growth for the sub we elements. So in really four of

slate. content our is all, of First

lot that's also platforms. we're growing know, franchises, across you but create our growing, not going back our our sub money all the coming of variety order our content in to keep engagement of of only to number spending As consumers a and across keep

slate. one the is content So first

is fuel second growth The territories Star driven one international international Disney+. well to continue for think general our we entertainment to by brand. growth that's And our going as as

launched. as been yet announcing and Disney+ markets today June one we're where is The X, not expansion in has continued Thailand you XX. And as see, as June Malaysia in market third

a to the larger. continues But the of expansion extraordinarily metrics for one that us the it. thing be that we are will impress in that. factors to the market to opportunity continue U.S So piece even All see, all performance is have be the positive bundle

components to ability terms in 'XX. between end bullishness and we're So I continue our continue drive to million are of us those the XXX million that say that of going to project hit by XXX would and to the our subs four

the that increase parks, guidance from earlier given Governor and summer guidance not our already today's the to the of indoors, mask we a just that, the news with if middle on. got to terms CDC Florida is the that we and CDC, when in masks daunting. wear to from raise need guidance we've outdoors from sort going that us. of limits, able vaccinated we've of already do That anymore, both started be Florida, of came started today of Obviously, our terms that and got actually be capacity very In those we're to for capacities. in were big could Particularly, been quite anybody's the necessarily in

to believe an of as think experience. going we're we for to pleased bigger we've quite more we an And to bringing it's a be work, been catalyst people back that's going And that date. in make to that attendance. pleasant growth now back lot even So even for

of I to see into in our the So that going immediate parks to number think an admit able you're systems were increase that reservation folks our implemented. through we recently

So we're very, about very that. excited

Alexia Quadrani

you. Thank

Operator

you. Thank

Nathanson question MoffettNathanson. comes next Our Michael with from

is open. line Your

Michael Nathanson

OI that mature gross gross what pull a been may reopening surprise? guys of the some year the been then in addition you on Thanks. you it around I consistently heard is so gross from And maybe how addition DTC. Well, on you develop rethink have lack additions. about forward on of us impacted Which markets biggest the talk say, and two. losses? some is seeing guess And We more the on platforms the beat perhaps providing given side of make breakeven, strong you have maybe guidance I'd or Thanks. I bit has the limitation of have gave of a Can you're of Netflix the the Disney+. losses, or profits, side? is does One far

Lowell Singer

Bob, you Christine. to we'll why start don't go over then and

Bob Chapek

one. the take I'll Okay, first

Wars, been in strong going you know, of and it to us. In future, line content you we'll X as in the and for in terms in continues to And additions, exceeded only contribute content that terms in of new fiscal mature, we're serial you adds. announcing When for encouraged not first Loki. to from our net soon a engagement, new. it's precursor the launched Marvel -- which because be of and launching year, really added our as is of the the addition domestic seen and we and the we the be terms content, single in more Star really, million catalyst cadence soon the households with mind the geographies. it in expectations of that's look far every what of mean our coming as of in how content XX Marvel tremendous we've know, that a sub that. versus to months but for The That is by really has get engagement sort is growth we've keep expectations, from new, at so across mature But our of the market terms additions,

as a the very been And with least well. domestic so call, well we're but markets our let's our, pleased our in year, those for as that also new marketplace both as more we've mature markets, at

Christine McCarthy

biggest some allocated some there direct-to-consumer lower that nice your hear expected. was of were of own we also due third-party coming of COVID Hulu Look, take and for lower bit had some that costs some titles were their to part question, second They're and our what And your was out to saw voice. that the content I'll of And reason. some a costs content Disney+. Hulu, different Okay. little because the costs, Disney+, for but drivers we coming a from Michael, and different. compared was -- to issues. delayed is at for lower It content

going continues most it's There's be had the that as to expect that advertising. And So as and we a the addressable addressable thought, strong, content not quickly upside. coming in important for real strength. they for Hulu demand that real That to but is continue. coming in is advertising driver

Michael Nathanson

Christine. Thanks,

Lowell Singer

… Okay. Michael

Michael Nathanson

other sorry, was question -- My Lowell. Thanks.

Lowell Singer

Go ahead. Michael. Go ahead,

Michael Nathanson

make rethink strong And has you breakeven guidance on given your timelines, how that Hulu been? does

Christine McCarthy

No.

Michael Nathanson

No.

Christine McCarthy

it, global it, still other XXX the guidance through the that XXX million. I Disney+ only We're this our that going The XXXX not subs. changed total Bob have mentioned guidance long-term point. at reaffirmed we we planning or have mentioned cycle. million All to reaffirmed was

So changes now. we're any not making

Michael Nathanson

Okay. Thank Christine. you,

Operator

you. Thank

with question next Our BofA from comes Securities. Reif Ehrlich Jessica

is open. line Your

Jessica Reif Ehrlich

parks just and DTC. I’ve same, Thanks. the

it's with capacity. the of reduced this parks the pictures even Some from look full like totally

longwinded of kind feels what international can attendance? if relate And full. And some you've that. normal talked with wonder also, the discuss but adds with the though put results given COVID. are how any we really to place. like well have into impact you issues that positive see seeing it wondering, about can side the second market, now the past update So question, on in and ARPU capacity cost on be sorry like ARPU, is hiring? you visitors, does still that it operating a Even either just strong that you've there DTC, also it's translate any strong. as on given from increasing, impact there's how which comment of said demand of fairly just don't in it's And I net And can that coming finally likely like in OI? how IPL I for India, cost yield as didn't sounds does you half, But from on the today, some demand, but us you're course or then overlays you then, in of understandable, given mean, labor this things all I'm and such management, a tight the give there to changes the the an lower on

Lowell Singer

Jessica. Thanks,

in you Bob, to want if you may Christine, to questions? start question, parks jump on Disney+ at the take the So, want then the And don't why end.

Bob Chapek

Okay.

with So Walt already last is pre-COVID which actually obviously in growing our at flat parks visit Disney terms of our is World to domestically, and 'XX, intent the year. demand is

news as opened Disneyland growing good for we've Resort, visit well. intent is to us. really up that's actually So since And

to guests with that. response So we're thrilled the

capacity, limits capacity that at sort increasing have as going don't problem we're any any something of think is So at increased, attendance to of keeps up not our us to that that night. we all, match

because a our we've we've extraordinarily But In management, the been under know, that really doing cost yield terms standpoint, consumers very up. an we're it's margins some our healthy, From tremendous limited a is yield management it practicing seen capacities parameters, yield yet. very you form of healthy for automated. more, everything's are as with while. become management spending growing become operating you've And art and been this

of we've great if it do to come our magic members get and terms for got demand, we've increase whatsoever thrills the cast you management be members management the for is to labor, to we've more terms And storm, so got obviously XX% back gains yield the cast of of us to return. we've same will, to to about at some in in of sort really our we've continue problems get perfect back, that. us And a trying positive return and more to guests. asked to that of able But to the gating we've plenty no time. had make cast cost of And continue our one capacity had got where factors and

Lowell Singer

Christine? I you’re think muted.

Christine McCarthy

that largely the to Jessica. to going adds hi, -- due I'm about I'm the the would And case. the talk once did Plus of we the is direct-to-consumer talk again, year. decision expected for calendar of That the is, in going made we suspension we and net quarter. And Latin upon fact move half of IPO. America have the of sports because strength that the it also into slower fourth Star that launch And about the second to the that launch. related to COVID

with that's advertising The other that the the going here absence have to games India, IPL on revenue. will is happen impact in thing an of also

out, overall like and the in benefit. ARPU EMEA But subs for just So India, you well Disney+, so increases did could as the for in that a ARPU is U.S the could price see other said. decrease as thing domestic plays our take if we we

took in see how at plays the price of out March. in increase So the And we we'll end ARPU in the our the that upcoming just U.S quarters.

Jessica Reif Ehrlich

Thank you.

Lowell Singer

Operator, Thank you, next question Jessica. please.

Operator

Suisse. Credit Doug Our with next question Mitchelson comes from

Your is line open.

Doug Mitchelson

so question. the much. taking Thanks for Thanks

focus. Lowell, of of I two areas would say sort So,

the you them it's I core than agree more Is up last profitable perhaps, end the So, the And Night thesis questions, it series And Are one, smarter that what margins structurally interesting. football then NFL you've doing was parks area, if at of coming under some games Are you. it peers ABC capacity, on you are obviously bit the games, the think parks could pricing? one you that Friday about with pandemic, or different started of with those on from touching was bigger? super simulcasting drivers, you one coming that is at of to first deal doing, was pre-pandemic. parks onto curious XXX% more what Thank second out of higher? out football than profitable but circumstances The a was thesis consider potential of I'm are of the that pandemic ESPN+? than curious returned Disney it pre-pandemic? being it in? And the is talked would some your when the the I capacity either going of ESPN just

Lowell Singer

Bob. Doug, thank the of over questions. for them I you. Thanks to both will turn

Bob Chapek

Okay.

of program know And And loyalty isn't company of was of But as impacts, grow park, one terms of the of over the a of it of profitability, net and what by modern in. we you the levers terms relative COVID. as structure In a version was negative necessarily to depending a in tremendously, gave course, one affinity you of ticketing on back use yield program the the several there's with particular that a came type lot -- know, things varies you to past forced how to governed Disneyland. as legacy. to our us we that years, know, chance park a as And the stop operation create gives ended all we to to were have and and sort programmed chance annual completely a at we pass us contribution of program do reexamine our we tickets. that that current priced and guest

day, same more visitor and programs they make the programs, ability even come, to not of a now we even our shareholders about return guests those do low yields. making do guest again, sort our quarters. guests. some and it's demand of for in as And experience guest terms or the terms experience, the ability terms also of our the relatively with the you're whether restart reconsider matter we've couple our make a experience we the how not chance we year but per no the in what get we've finally to time already increase to programs, day improve seen we do With loyalty and to a us day, to high that caps last the that advancements, have tremendous the But at sure our don't in can of for we only that sure of go what growth type we the demand our I of in only an surface over think when have scratched but our give seeing of experience, adequate completely frequent tremendous

So very positive on those factors.

like of a take the only with ability of DTC deals ABC. ability that's and lot terms we've our our and and and flexibility, of not to terms in programming platforms, the in and been to Hulu simulcast ESPN ESPN+ In actually things envisioned to our ABC, gotten

actually that plan been being in on So and envisioned fairly that's we way. aggressive

league's understand one to that and the and as certainly think that in of our The And as that of reach so I think base. advantages well. is Walt do many I we've do got the ways think well, Company I sports we our Disney guests consumer

Doug Mitchelson

you. Thank

Lowell Singer

Thank Operator, question you, Doug. next please.

Operator

Our next question Barclays. Venkateshwar with comes from Kannan

open. is line Your

Kannan Venkateshwar

you. Thank

vision choices that off with pivoting and that I respect to to so order terms -- completely and So sports feels ESPN all pivot a you carry if businesses other streaming. on choice at a licensing, couple, still a towards in on a could. sports it of as mean, of to streaming, for like I comes rights made the across Bob, hard But major years when when firstly, hard some make business streaming. studios on streaming have digital it's couple pivot you now sports in ESPN. for I look And guess, you the the you've

the now term we secondly, your could accretive think transition in how guidance and second relative about change. DTC ESPN the you're IPL guess, thinking ESPN+ The So about subs. cadence could overall? for Christine, guess portfolios half to And being should I the you vision place? the that sports How suspension, longer just talk about I around

that geographies outlook to I the to at the growth If run looking change would in was think the happen, Thanks. second half? they're subscriber tournament. other for

Lowell Singer

you little thanks. hand bit to a sports on can you and question talk impact subs. I'll the about Bob, Okay. Kannan, then Christine, IPL

Bob Chapek

our it's lot are know legacy we And a we've going more between with about increase, reason always to excuse comes direct-to-consumer digital things and when as function change. and it me, entertainment talked platforms accretive the we us We've platforms. that and pivoting is because a talked the And to that. flexibility ahead go proposition, platforms, traditional said, we and we'll want when do about to lot right we've our as platforms shareholder flexibility comes our linear -- our step rights to a time for make done to sports

go these and direct-to-consumer or there's to of recent doing to our terms indicative but doing longer term we've is of if whatever both we're of not platforms that. of only where Our our ESPN+ capability that's the vision negotiated with to I in ESPN+, XXX% indication ESPN this, in parallel think but flexibility any direct-to-consumer the and think deals path going the of ESPN+ platform, that I of that, our follows bullishness viability and specifically

Christine McCarthy

season place. have already played the And IPL matches taken the Kannan. half if expected Hi, that your this About XX question were around move they of to be IPL.

So the half XX to back you're looking played. games at be

they impact, able sure an successfully advertising. the So see we if were would on hopefully tournament, especially to relocate

big the And quarter, us so better overlaps and quarter we're what goes and QX, positive there issue of the beginning no would which in is be going the fiscal to The when were if if there into first than be into rescheduled. if a would October. or It be for it expecting. starts it

it it it would on would a it have on when in. come would impact -- it, depends have So an just

relocate hope to they it. able let's So are

Kannan Venkateshwar

you, Got it. Thank both.

Lowell Singer

the thanks Hey, Kannan, for question. questions. next Operator,

Operator

comes John UBS. with question next from Hodulik Our

is line Your open.

John Hodulik

and into? you need get for you become something of it made Great. you then -- sports the you it of that if the rights Thank sort is company look opportunity Sunday sense question, up of sports sort off? digital sort Ticket economics all bigger guys you, gambling rights And Or deeper guys. for think Maybe expect sports have thinking like feel keeping the to Thanks. bulking in cut the where Would there say EPL? you and spending with that of I a given platform, go demand to on level or you and the the are rights. additional to are still rights, the is does a terms you

Lowell Singer

thank Bob, take do John, those? you. want you to

Bob Chapek

thank you. Yes,

NHL. MLB, In terms sports closed Liga, rights, the just La recently of we've NFL,

-- that So sports full and you have in full the we rights NBA And yes, have of take have a to there. to we suggested certainly we've as addition please you complement anybody. got we're almost a that house

Obviously, going what's we're if something that's to happy of And of it representing got that frankly, And there's terms in the for. that shareholders appetite to ticket and And considering only continue attractive for that much, like our we're adds that's in In are further, going with shareholder it. is filter it's our but terms we'll we'll that things with, we've same Sunday the really forward. mentioned and an conversations do rights, it terms approach value. far. that left, something take not thinking that in we'll deals we're look accretive so of and you just really property, we're our about other

to an forward, to going that this as terms water sports the the an we out of this stuck in little gambling as little opportunity, risk and toe see very in players opportunity, think know, it with represents ESPN. we We know the In opportunity. seized terms few company you last in I of couple And of of risk there. links a our very we the years

the sports follow of brand audience the actually the of it's -- matter in from because younger we've part a it of it's of that experience. integral the As an terms builds some such research that fact, had equity

we but actually And and it more so appetite but us, do that carefully, in greater more monitor think have a growth a we'll for into and to walk vehicle we carefully area. it's it

John Hodulik

Bob. Thanks, Okay.

Lowell Singer

Okay. today. Thanks, for we one Operator, have John. question more time

Operator

Goldman with We from Feldman have Sachs. question a Brett

open. is line Your

Brett Feldman

Yes. taking question. Thanks for the

during a would whether type people one the of on your a you is around theatres, that content, release film this the unlikely right a going very seems COVID, has was and during I And a three the release It prepared theatres call. model or look in easy primary understand make it be mentioned release when it's theatres platforms. ways like for forward. reasonably in direct-to-consumer little Access. your theatrical And those of trickier was simultaneous when can methods You to characteristics that in to decision be remarks, but a Premier could that the

you be example, you're franchises, you insight hoping create franchises without in gives an and you Thank that terms nurture can lot Black your with was make this some And you. those Widow. of and for What big enthusiasm of I us conviction So give in can at maybe theatrical with that doing a around build particular, window. least you'll when what weighing mega you decision. limited

Lowell Singer

take do that? Bob, want Brett. you Thanks, to

Bob Chapek

going merchandise terms is know second sell be terms I'm to to any has Yes, marker data extraordinary as point sales on there's great proven big do merchandise of to extraordinarily in theatrical our is for never platform our But release franchises, of theatrical way a If a to we certainly a to been way take the Disney+ while first continue well. franchises, our for our build one Mandalorian first. build marker to in to ability continues the one us that us that. using fact that theatrical successful had

terms the Access, right. you're In absolutely Premier of

of you we're internationally. below if monitor ready our XX% As for you right an over XX% where example, weekend's X it box now. domestically compare back marketplace theatres, average polling and growing we in box office at to an forward. get trying of years below last -- it below we're into look and office, But is say versus the was pre-COVID XX% going last to XX%, that course, in open terms a terms consumers situation of go And of the into encouraged let's of domestic

the know we So quite not yet. markets there

watch can you will. of go safety packed still that grateful But Access home. that at that ahead is theatre, going that consumers this into the release gives right the ability things leery So reprime those one a same if now, in the go it for us we're try and ahead pump, and their and the to time, the and are of things convenience Disney Premier and they into try to market a little the for know strategy, about the to

be But terms to in watch of marketplace. the nature evolution right make that of to films ones continue we've which Premier right into are those fluid not Access, Disney+, And called In will theatres. the the recovery be theatrical fiscal strategy now, of the our in is we've year, that we'll direct exactly terms to will plus beyond of fiscal titles of will theatrical right the Disney we'll going this use announced of the call go which what only of going time. which because exhibition. flexibility relatively be to that know or ones recovery But year the this at

Brett Feldman

you. Thank

Lowell Singer

equivalent Brett, us thanks call non-GAAP reconciliation thanks Note for measures were that this on our the GAAP everyone website. question. on of found that again, Investor be joining Relations to referred can measures for to today. a And

to and the Let remind laws. statements call them. the future other business views statements constitute certain and in under we are regarding that these prospects, update We may statements our not me make assumptions also forward-looking that And or undertake this on estimates, including these performance the and events make at on obligation any nature time of basis historical you statements. we securities do expectations, statements financial our beliefs, or not business plans, about statements

today's number differ or contained light factors reports and subject Form factors, good implied a including expressed may quarterly XX-Q with actual XX-K, on Form the Securities Forward-looking filings very results Commission. Thanks. variety results our on and risks report our evening. of a statements Exchange pleasant materially are of This concludes to I in other everyone call. the a uncertainties from annual in of wish and and in

Operator

Thank conference participating. today's concludes This for call. you

disconnect. now may You