Walt Disney Co (The) (DIS)

Alexia Quadrani Investor Relations
Bob Chapek Chief Executive Officer
Christine McCarthy Senior EVP and Chief Financial Officer
Brett Feldman Goldman Sachs
Benjamin Swinburne Morgan Stanley
Michael Nathanson MoffettNathanson
Jessica Reif Ehrlich Bank of America
Steven Cahall Wells Fargo
Kannan Venkateshwar Barclays
Philip Cusick JPMorgan
Douglas Mitchelson Credit Suisse
Michael Morris Guggenheim Securities
Call transcript
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Thank you for standing by, and welcome to The Walt Disney Company Second Quarter 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. Please be advised that this conference is being recorded. After the presentation, we will conduct a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, Alexia Quadrani, Senior Vice President of Investor Relations. ahead. go Please

Alexia Quadrani

my Disney It's welcome to everybody Good second pleasure quarter Walt Company's XXXX The afternoon. to earnings call.

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

Chief Joining today's Bob are and call me Financial Officer; Vice Officer. Senior McCarthy, Executive Chapek, Christine for President Disney's and Chief Executive

some will comments questions. of from take Bob happy Following your we be Christine, to and

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

Bob Chapek

Thanks, what Alexia, and execute focus, Disney's members achieved. they've excellence, and against good and to audience of QX, and I afternoon, could storytelling everyone. continued of innovation employees In not our be priorities strategic proud cast more

performance again with achievements the are that at domestic including results and parks quarter, once growth creative in along league Our our strong teams our proved this services, content own. at our streaming of we a our fantastic of continued

a create go through most and creative consumption the pipeline the audiences across channels, a emotional few demographics, and Christine We will have continue that all high-quality quarter franchises, machine touch and strengths, then come together highlights will that engagement like details to of points geographies which our to connection iconic audiences favorite from I'd with deep world's entertainment's distribution with drive generations. reach to unrivaled that share illustrate a synergy an across the and and results. brands these of

experience XXXX. like phenomenal. to powered were XX% been customized coupled by by per fire said, continue all Galactic has domestic and enhancements cylinders, Star Response to versus capita grew with parks Starcruiser than I spending They demand, storytelling standout. that more our next-generation Wars: As personalized guest a strong on

end ratings XXX% in is of high guest the best-in-class March we utilization for strong, and expect are with which opened line experience, Demand this and X, through fact, immersive QX. our In incredibly offerings.

Looking at of welcome be excited Rewind more officially ahead, not on to on XX. Epcot writers we Cosmic Guardians Galaxy: May could the

miss rollercoasters One a exciting called that reverse adventure longest attraction the XXth guests With a the won't puts Paris, rotating the Disneyland our Campus of launch out to part our experience we take the At middle Avengers of degrees, during indoor they're as of second the plan, are anniversary thrilled of in celebration. world, and on the first-ever step immersive most this turn story riders next ambitious in guests to summer the Guardians resort's of yet. expansion jam. the opening in of help an as the XXX our cars coaster

Europe seen continued recovers its yield the Paris recovery. and growth forward from strong we've look pandemic, to Disneyland at As

based are 'XX. general simply, subscriptions cohorts. as amongst one since on with the a and a kind, by Disney+'s groups, Another adults across those keeping all ability but we XXX unique track us more selectively exceptional a its total It's almost of XXX to believe X Disney+ enhancing entertainment in range half titles standout we The to designed the this engagement sign-ups amongst kids. That recognition demographic subscribers evolve. XXX are also of attract deepen through of consumer especially popular its content to resources titles reinforces ecosystem, and service of content incredible Disney+ were demographics original A streaming benefit Disney+ with fiscal million million QX our of subscribers adding services. includes million of on than to In million specific million X.X creative quarter. X.X as ended quarter We our from Disney+ but our to after by Disney+ drive these with subscribers, without families, launch appeal audiences is Quite a of behavior unique entertainment growth reminder, only the wide can of excellence general decades is branded we certainly from reach with engines continues platform quadrants. shifting nature. that creation across reach viewers not

our not Our asset position with pipelines but distribution various is amongst each just distribution strategy to to thoughtful options. fill it best be our to

be the new For example family instance, XX starting Dancing of and has the this home whole a that Disney+ fall. entertained that on with a more together. Stars recently beloved is announced for content wonderful ABC seasons brings than the show will series viewers We is

develop Beyond steady development in our are over to XX over Based Africa Africa is titles XXX production is are targeting production. Leagues team. the Asia, with potential of premiere starting West can original Sea, by and slated Nautilus of have produce stages end the state. content markets with in on with markets. EMEA originals, just Disney+ hubs subscribers specific commander, of currently creative Nemo. engagement. our enthusiastic titles of And broad equally believe the origin next originals we XX,XXX Captain We international along drive will Europe, international about is submarine attract new in This plan increasing appeal. example roll we XXX local network to its One premium this XXX content South to to We new global of worldwide year branded one appeal, Nautilus iconic and various demos, the of per example and original with how these mysterious year, local out our growth story in and perspective Under those from international of the week. fiscal across from

multiple plans our mention in the calendar to U.S. XXXX. of ad-supported offering end through want the is to points in year for and introduce and Expanding Disney+ price internationally I win access Disney+, recently advertisers. by the an subscription announced a leaving Before consumers

rooted Of course, all our in great is content. success of

of with More the XXth entertainment second not performance Grey's of is string Our entertainment series The general we on of the in season happier ahead, not Anatomy. its the the the quarter Pam ABC's Hulu's Only Tommy like be and while Kardashians. season general Dropout. with phenomenal content the & and continued Murders team of Building And in could Hulu great record-breaking

X earned for premiered Feature Moon Disney+ reaction Collective the studio's Encanto; Star studios Animation Animation Academy Turning positive Onyx and XX the March Searchlight million Soul. for of Red our and quarter, continue became fastest impressive audiences, including Best Boba Studios original best reach The Disney+ Fett Studios, track and to Pictures awards, hours Pixar Animated on record. series Walt viewed Book the and Summer XXX title The Documentary Disney Feature on This of drew platform. Marvel's Knight from Wars: on

exciting content coming films with our continue series an will all and ahead, high-quality array Looking of at our scale studios deliver to of channels. to distribution

Obi-Wan slate Kenobi, Marvel, fact, this Thunder, of our the Lightyear, titles of Panther: with The In for Black strong Way Love Wakanda incredibly and Avatar: and Water. is Ms. remainder Forever the anticipated year Thor: long like

Doctor past second-highest mention of success in weekend. of and opening Marvel's was which pandemic the time. Domestically, all must it Multiverse of I phenomenal Madness, opening highest the roughly of Finally, the the worldwide to era Strange opened the million this $XXX XXth

notably the success games are strategy weekend ratings of programming both for are XX no these well out the X.X of us, encouraged platform. with digits, engaging most and sports average content up succeed Opening viewers the double on was extends and That pandemic. remain sports. ability the and to ESPN. the distribution sign was quarter viewership the our for NBA Our with events flexibility million by fans across coming live of strong matter ESPN worked through viewed to fantastic another and and fantastic the results of has past how ratings over have of in been decade, we Playoffs with studio ABC

Hulu, deal Cup Playoffs, X. with the ABC which its in NHL across unique groundbreaking ESPN, began on is Stanley ESPN+, Our exposure culminating and May

the we stretch began Peyton season XX also simultaneously off Kay fact, Playoffs on TOUR golf Football the our recently Rodriguez. the and the over and Monday Eli, NHL debuted includes Wimbledon, PGA inaugural KayRod In Alex and Michael of MLB tournaments. UFC broadcast, ESPN+, success And Women's new live Coming with of NBA NCAA hours that going Men's season-long and of Boxing coverage we Cast of with X,XXX College and featuring the alternative Live Night from Series, exciting championship combination of off an World kicks more. on programming

I want products built Toy Pixar's across when created businesses X was life And make a as with the it than of the on film X on I Space over In prefer. say we've our if on our flywheel, bigger the well to The apart generating June franchise weeks, original Ranger X of all sets around of few franchise, or tell to films X of is across portfolio of nearly brands time. debuted, and our only a also $X in machine Story still with themed points in us enables as synergy over geographies, This retail content release Disney+ a after of world everyone's like Toy is story franchise origin theaters consumer to in people to service. touch business. a IP interactions live to hotels. Before lives. you to but Asks XXXX Disney more will their is series, the XX. Question, of Christine, businesses Story parks, example uniquely unique annual with and exclusively to reach short the Toy words existing hand cornerstone an sales. Lightyear available array portfolio engaging create part first platforms, hits Encanto, the few ability attractions about What as is key and a as our our well new ago decades is this just brought XX build now lands franchise, which And it Forky of distribution immersive the a across Story our favorite years which lines billion franchises and film XX character One with not almost our the of available feature-length

franchises, of Of places. just in but ability more course, many bring illustrates unparalleled stories more Toy one more to it to ways in for our Story is people our life

connected fact, capabilities life set to In and even IP integrated points. to library touch through and us further storytelling continue apart bring consumer across will we our franchise is that as more next-generation our

an even our Christine. to fans and storytelling it around to that's technology look transform world. hand larger, and more universe over entertainment to magical that, innovative our create to we As families combining for With by extraordinary connected the century, I'll Disney with mission: second

Christine McCarthy

Thanks, good everyone. Bob, and afternoon,

earnings year quarter an the diluted versus fiscal quarter. items, certain prior Excluding $X.XX share second increase for of per the were $X.XX,

be increasing the with total income quarter to continue pleased with by year XX% financial segment operating prior XX% year-to-date. over versus and We our results by

approximately to continued open, primarily $X.X billion. Products as signs increased but growth Walt show Disney to which and quarter. parks, prior open nearly was segment billion Experiences closed income strong In of recovery domestic the operating our Parks, was were Disneyland year-over-year World quarter. was for by by entire Growth for entire Our driven $X.X the year, and the

be domestic We and with demand attendance continue to the overall parks. trends at our pleased

saw were we levels. In where in days demand quarter many exceed fact, XXXX there the

However, on we an control attendance reservation with experience. a guest system are delivering our continuing through quality eye to

over beverage guest Bob per of capita and at domestic admissions, by QX and on QX XX% versus XXXX mentioned board across fiscal food earlier, our the XXXX and with spending XX% versus of fiscal increases As merchandise. parks by increased

the quarter. ahead to third Looking

of to pipeline World days beginning from recovery, international is still Disneyland remains demand at forward-looking Our while attendance the robust. improvements. Disney we are some in And see visitation and Walt early both

and our that impacts resorts of growth results improved the was now which quarter, Wars as We merchandise Disneyland of lower results thrilled the are milestone all QX closed of operating open, This during move Minnie, on Hong increased Disney, at reflecting continue iconic were Kong including major in partially the to franchises, Star year pandemic. several versus in sales parks, to Products Consumer of the the in due end quarter. Shanghai Princess. which and domestic quarter. Spider-Man, both also prior higher Disneyland the COVID-related offset At Paris, our of through Disney Mickey of and closures of March, and impacted prior a year by are as was based international income open the at our by we operating

Moving the & Entertainment segment. Distribution Media on to

with expenses revenue our increased from Linear year due domestic revenue ESPN Total Networks was by pre-COVID X% in gave operating offset currently $X.X versus prior are NBA growth at was third as noted growth QX. at channels viewership subscription from partially prior by primarily and We the in pacing our Disney+, partially paid to were Cable. subscription revenue benefited due versus million close Academy in programming additions international operating over At as new year results costs to the paid subscribers, programming income roughly with our and technology the Second decreased and programming Disney+ driven from the season schedule Disney+ guidance partially marketing the Direct-to-Consumer, of lower the X XXX Latin to second of pay-per-view A in net Hotstar, offset guidance at production largest offset paid benefiting business, and the by of towards with $X.X by Direct-to-Consumer, last income our up by subscribers income, and almost well including we of net which revenue tentpole Academy partially half approximately operating of decline million and partially subscribers. were programming X higher year-over-year in being programming those what subscription strongest increase over the nearly million The quarter-to-date the At year, our versus and as advertising support versus of the versus with Broadcasting higher by the $XXX content and international and operating production These channels. a at Disney+ quarter. million prior offset Combo+ $XXX Pro in lower to impacts quarter, roughly which by driven by and points primarily expenses, of to revenues prior this At quarter in growth. the the results XX.X multiproduct modest with the line driven of quarter success Hulu, higher subscribers, pricing. quarter. and lower increase million versus Internationally, higher in growth more little in return driving ended quarter Domestically, partially direct-to-consumer million by ESPN income offset of Linear lower to releases, year year, about of income the about programming versus growth. year sales that production net by The addition quarter. the and decreased programming the start losses the million prior excluding and affiliate by to was at our These revenue a impacts Operating the we second world, by ended was came X production billion the QX losses our Awards. also last driven Knight primarily revenue growth Awards, offering. by production adds quarter decreased largely a expenses and operating higher growth return costs. increased prior the versus growth income Broadcasting the reflecting domestic quarter. advertising affiliate which X revenue. driven higher timing Cable, or were and costs at around which versus by increase than adds the higher growth Hotstar, bundled an Red offset revenue is Advertising consisting America decline aired higher income ESPN+ affiliate operating Moon Networks of Turning Operating timing quarter X games to billion, X X-point strength global advertising at At in cost contributor, additional by an and end to costs. more with by was DTC losses affiliate in lower at including higher the at million by subscribers, approximately paid net XX% due of a in of flat driven higher due cash due year the as offset offset QX. year increased at in from was channels the year. advertising component revenue Domestically, of QX to season programming the XX.X ended of offset games domestic a benefited cable advertising results were costs higher by partially first prior as regular added grew a QX technology Hulu. production part reflect to compared offset along costs by driven Bowl. and at were than revenue. costs, with well Disney+ significantly ESPN+ higher our decrease from and services and rates, million from line over was as by increased at NFL we This IPL marketing widened last And sports the X.X the offerings. the production, and

a Moving on million other. the SVOD approximately quarter, last year, prior and by lower in decreased results. our entertainment Results in TV sales, guidance we which discussed driven in to results, $XXX to decrease home addition by content licensing versus and

utilize aligned on these are our As our to decision deliberately with strategic impacts direct-to-consumer our a reminder, content services. own

recognized for content things to a of few was all originally note in like in quickly that with time $X recorded the to I'll the services. as agreement revenue revenue revenue to own available make the terminate other back available content customer we quarter. that a of a net recognized substantially reversal second half we've of in amounts keep year, years, made termination of fiscal on consideration to items the related revenue of amounts our agreements mind touch the early the remaining I content was licensing of deferred previous received at Before reversal. we'd a We order direct-to-consumer X you the for as Because that relevant billion on

Finally, tax-related our a note some impact QX on items on EPS. the of

given excluding impact effective a impact of an adverse regulations. annual our in on per of including change to diluted higher $X.XX certain earnings And mentioning puts and Our remain U.S. any full foreign many $X.XX tax rate items rate, It's to U.S. share, with worth impact elevated rate the statutory currently effective expect we these of there has quarter-to-quarter. lead tax year generally correlated tax the variances includes U.S. of been earnings, in while which the the takes can complex rate are approximately above tax due somewhat period, that recent the statutory could rate.

to parks relates half and impact third million quarter could by the DPEP, income theme of approximately at the the year. operating it second third prior up to our as Now the in Asia XXXX. At quarter fiscal closures versus adversely $XXX

for quarter. and closed first of a visibility quarter-to-date, reminder, a X not Shanghai closed weeks we the Kong was been Disney Hong date. to As do has Disneyland have the reopening yet

the continue in costs we of the versus our have the million higher in mentioning net for content half, and did of and reflecting other still to million sales, Direct-to-Consumer primarily fees more leveraging operating year-over-year, our is while the at versus costs to million in year year. increased entertainment programming sports to to $XXX services, half than driven quarter programming we stronger-than-expected rights increase QX decrease prioritize expect Hulu the expect first results expense decrease content strategically higher own third by half with a in Live. at At content continued $XXX we decline in expected As that licensing and content and expected a production licensing approximately Disney+ are the original home first it's Hulu along adds we year. The prior worth higher declines second results. Disney+, by by $XXX

being Additionally, by in including note are some of impacted of that the QX, factors. launching in were end geopolitical European Eastern Poland, the regions markets towards

of to cash we of a much as year And We've guidance the to the Bob that the spend, fiscal XXXX expecting the still that mentioned, spending year. half subscriber as it to in billion back $XX to slower during Note slightly first amount of subs we XXX stated XXXX. spend year. of than relates content XXX are content much as adjusted as As our half long-term slate as cadence expect reflect by that $XX we confident million to strong previously in total million we a fiscal anticipated billion. are Disney+ content

fiscal that I'll XXXX. we your We take also that, still turn And to and back would questions. it Disney+ expect will be profitability in with happy Alexia, to achieve

Alexia Quadrani

Thank you, Christine.

happy it question please make analysts here for person We this direct us the that, to ask many call. ready questions. we're I are for And We with to in as But order as easier, first you yourself to one back that be will to limit help possible question. to today. the operator, help get in


with first Goldman is Your question Sachs. from Feldman Brett

Brett Feldman

on Bob to some pricing touched degree comments. during his

So could we come I to thought that. back

been you is, of seems how the would you'll into It higher? think when revisiting really the we've that like for new go fact of Disney+ pricing a you on do lot there's price that, launching just ad-supported factors a tier. right about be take One including getting can questions cadence the

onto You're lot content more service. putting a the

not put you're that there's about all some that terms yields I'm some to increased And you inflationary of quite just You've pressures, and how if in competition. pot pricing. sure what thinking seen obviously, a

Bob Chapek

All right. you. Thank

that that As offered. comfortable value investment, you relationship content increase And believe strong Disney+, extremely know, adjust the attractive been the opening our to on price ability our an we've that's as going the give with launch to -- same time, we that know, as price-value still, us proposition. point and price with by very maintain and you at we've we we

keep the Disney+ points. that across an more as broad going reach our price tier of lower. we to some price additive mentioned service can enables us multiple the services, to ability nature think the to even ad-driven using this is the other Disney+ us expand give audience see I And ad we of You an

made we get spending. additional would the for that by that's course, on per user advertising up revenue the Of

of net started time value price-value that. can tremendous we that up cascade content, pretty bullish all increased over and believe about the the you. Thank we up the So sort but new and of price given with move our relationship that we're we


from Stanley. Next Swinburne question Ben is Morgan with

Benjamin Swinburne

I'm prepared and On you'll you question, focused even you seeing double-digit just everybody through to on is if your can, per strong the going a signs grow of growth summer particularly as any A how the and economy parks, wondering, parks. not just remarks. know, to given see or some start And per the inflation, fall. I that substantial as the that you're into rest consumer, at from you're domestic lap if Alexia, move growth clarification maybe suggest capita really the would significant the and the deceleration capita

just be second thinking the Disney+ year then and Are stronger at you sure were come I expecting net maybe comparisons. And that back, you what I Just Christine, won't just full understood you you're relative on saying. we wanted lap -- adds. you're half a be pronounced? just calling than first still how out the the about as make what curious to you second understood and half to as I comparison the wanted these on half

Alexia Quadrani

Bob, Christine you and follow first half can the don't up. why take then

Bob Chapek


reservation we're by going trends seeing to is and our yield So improvements we're But seeing, our Paris, also we're the that the using guest see experience. to comments, really in it optimize and that attendance, we're encouraged some to her strategy, really particularly we in mentioned exceeding controlling we're system get But Christine continue demand, our domestic expectations. international as as to strong visitation.

but well what If remember, high you some quarter, we hopes had mentioned it, seeing anticipated. we were we last above for that we had

say say, we're you to those that While I'm even, or QX higher. happy even as lapping again numbers in

by seeing very, of of terms we're encouraged trends in that the very the So the of number continuation people. we're

reservation sign-up sort Genie+, that with really balanced parks which the helps you will. us price example, to per manage our day, come willingness system, our to plus of For if our for

we us any that meaningfully to that. really solely prices, to increase in has having sight raising yield end rely that per allowed strategy see spending domestic for and So on capita structurally ticket without don't

Christine McCarthy

for expect question half the the an do increase your the net of Ben, Great. over we second on still adds first year, half.

first that half as anticipated the expected, came half. in But initially increase may large. to still delta had not half be expect an we exceed than do However, the second so that in better we first the


MoffettNathanson. with Nathanson Michael

Michael Nathanson

X. have I

First Bob, are to subscriber growth as seems the it on maybe as kind focused the numbers achieve. just now the on be, the to achieve of that much markets equity and sub would not cost cost focused

we've do the would with do around the wonder like measure sub how in the given first the Any parks? a Christine, type through things growth on year. limit costs XXXX? at then, targets competition what you're maybe seen point? the about determine subs this XXX halfway globe, of and margins the incremental seeing margin can that I And how ROIC So laid type rising in when the you inflation far, sports content maybe strong versus those XXX to talk could the million that Very you how returns million subs? you, maybe so bit attaining -- And shareholder were versus on you need next the any and out parks of drive and the will you be at

Bob Chapek

watching So and heard our targets, cost -- you growth guidance both as on earlier, you reaffirmed, very our And know, we content we're profitability. our carefully on content as growth. subs

subs in think scale drive will they believe that those great and to going balancing we drive then is we It's but subs, move obviously content our profitability. So act, our a together.

don't both we we've out. that the are is the our necessarily -- got, overall them see you We without with laid We're the of general that content frankly counter. we've approach see extremely So XX% that of which option, as happy entertainment kids. them as heard subs sort consistent families with across

than that relative typical expenditure our cheaper franchise per-program basis. expenditure little same the is time, content so And at a on a

been even of doesn't come general forward, all profitability lot general said, that to reasonable level, it well very though to balancing markets we're their the that confident as both you retain entertainment So to X. we're hit films. attract on guidance going we've at we're ability to adding a seeing at in per-title date the and franchise in That we're our subs. the sort And by of international a level sub if bringing in guidance local, area, cost content and both and our going those of relative will,

Christine McCarthy

Hi, Michael.

as in else and bookings Bob in On levels. everything what feel the the the demand margins, parks we we're really about attendance forward-looking the good said, seeing consumer and

about I'll challenging always we rising we good an what that and costs. it feel and cost do all pressures, beverage. of close looking more to recent those, is from of merchandise we But I'll example we actually attention face of something a So you everything at pay one is with of to portion food one that in inflationary fuel. good and that inflation. margins. covers The the on, give that for mitigating executing impacts are we increased -- example you give is are But the

a volatility cost have robust volatility, and at fuel program in reduces that Disney and of minimizes We fuel. very Walt risk reduces the World, hedging

that do everybody tighter what the we have something suspended that have parks And doing We a reopened labor with program and that wages the minimize to were program impacts. impact so on can that dealing is Rising market. -- while while we the particular we cost. are and labor shut, is we

impacts you And also our some situation. pressure we're with very it, the any supply we to diversify supply chain receive to given suppliers, our suppliers those business of immune our demand that fluidity expedite we're availability chain, the to mitigate product of shipping. extent challenges. working we strong the working to can difficult the it's to seeing, the isn't impact with trust of shippers to On But experience we're we're financial global to through and the margins. aware fully the forecast right potential are and working accurately due But hard time now, to on any that

Alexia Quadrani

question? next Operator,


of From Jessica Rief Ehrlich with Bank America.

Jessica Reif Ehrlich

Can big will color give one inventory, share will on this theme from the effort for And ad about you're shift platform week, measurement, -- you you given selling upfronts you dollars? Is broadcast economy? you like with about you given just us changes Disney year's have do TAM this already adding ad-supported have incremental Disney+. some your will thinking of the subscribers? are coming pie Do having multiple and, for AVOD that ultimately the with rollout increase -- can or staying overall advertising what question, upcoming Hulu multipart. overall And Disney+, be linear? next it I on that? this thinking of an that will the in think how drive now How grow not? any Or you you're and one -- traditional service across the course, platforms much how for think you're

Bob Chapek


upfront And Let's have take first ad you this our see. combination asking tier. performance at for is been as around this a also And I'm us going this for expect a to strong reaction been Hulu, to key They the expecting first. know, very suggest, We're the excitement at years. same our the year. overall. from we the Disney+ as advertisers very of positive you part of has contributor be a for time, which

be high is to other sports in to that continue demand. are The thing going

of advertisers, focused content robust the original with past on as made the well slate And we've the right studio shows our original content and shows our that so we deals as games. and few years over

advertising growing-the-pie our with sort an only believe In proposition idea, that is terms Disney+. value enhanced of with of addition tier on we Disney+ of ad-supported of the the

going the it's believe to also be price going good advertisers. the to us it's great we another point, it's give consumer So for entry for because but

Our And that to that multiple a think given networks. linear to we're advertisers company, we for going reach. of our increasingly as portfolio our provide reach streaming platforms and are looking a broader

consumer solutions, for customers creating advertising our and time. for for both same the advertising comprehensive avenues, I we're think choice So at more


From Steven Cahall with Wells Fargo.

Steven Cahall

a the than Just seen first, carte sports network? more the the of always their lot key making peers. what's aggressive been back X. NFL Bob, already Maybe of holding historically some you ESPN put la peers to on has streaming a sports Disney pivot streaming. the a fully to of from like some in We've

the about bundle is You lot with and a Disney+ much talked Hulu. how working

you're try really that Of DTC much Christina, I sizing and even you've So strategy ESPN+ I'm make to billion this take of a have asked content again. fully it or carte the local to then any just going harder. content? maybe help is thinking on drive got all And what wondering the how about la that content so would in and either entertainment how in just before, $XX general spend, the

Bob Chapek


So know, for us. all of cash on as you our generators Networks, Linear they're huge

of to debt the acquisition to we've So we're that the through accumulate or of a good due down COVID had job to either really challenge. doing extent, some some chopping

those the DTC to puts fast I time, to situation At And too a a hesitancy very into ability conscious overall so healthier move of cash aggressively think more go in from the ESPN. area situation. is that company really our the our we're of flow away same

And believe And that have a right doing the that it's know us point one dock, way on us immediate at is we'll But at for is so be be offering to now. expression. sort you DTC obviously, going putting But of a ESPN+ Linear will our we some if fully that's ESPN there in we on foot our you business the will, into that regain go point, ramifications DTC enable growth that what the that shareholders, to boat one cash we're full described. we going get there and flow Networks. model fully legacy from to when that good on foot for to an on able

Christine McCarthy

across I content that are our direct-to-consumer. that, as billion, talked sports. it's initially, we linear, platforms. creating your we drive our we on answer existing engagement we intent about talked where say into about the as world-class content our amount meaningful And on balance and subscriber segments various leverage dedicated all franchises. in spend earlier, mean to deeper be that leveraging about Steve, And about back can the going, remains. new content $XX it you teams that will into mentioned X/X of billion that will entertainment targeted Okay. of growth creative on property. of creating focused remember When $XX theatrical of general it content the question investments and as Also, still will platform. think when well across in distribution a we we're budget be that being enterprise-wide when This that That intellectual includes

content that entertainment, mentioned, shows But to want local we language language content. do saw content about rights. and general previously. of to the XXX English When haven't local XXX. ask provided Asia Latin outside you In broad Asia, India, we just this and or for give I Encanto that have XXX; you pipeline America, it's -- region; it's speaking. in of U.S. including perspective local want it's give as I'll You even breakdowns. investing XXX; XXX, some because that the in that Bob XXX and in in XXX, at Southeast look in sports EMEA, the you some region, though didn't about in is in I you Pacific

I in haven't we the given breaks outside that of of in are So before, that think regions the that U.S. we also kind but it up various

Alexia Quadrani

Operator, next question?


Barclays. Next question Kannan Venkateshwar with is from

Kannan Venkateshwar

if couple, could. I A

do goal, tier, especially expect we that in of the get that think XXX one. guess, think base I to be million really about do proportion we with for that first given release has that looking Disney would able since ad-supported at the on XX midpoint, subs given million this what don't streaming new now when if the year? more So been the And year you you will XXXX. China a premium a tier may to first, versus I movie Bob, to be lines the at to service, than secondly, So streaming the goal normal fact subs have trend are the

just in could what change that us when roadblocks help the If see you there some understand and could are we process?

Bob Chapek

our China. both business probably a worth Nile recent difficulty and And most in getting in films and releases of China though, our situation as But very market. record million to with and standpoint there at for from you without the I our films were noting, release. this $XXX did you market. Okay. it's submit from just the been Death franchises has guess, complicated strong crossed on some a And very long fluid, that a think, week political got Doctor we'll our And in I'm that know, continue this We've we've and less standpoint. Encanto. as and going brands extraordinary. a for having to a Strange in And time fan the we're start success than base that

box we be get really doesn't the rate relatively our China getting to do that take across without Christine, than the it have we there, pretty in to lower of confident the talk China, rest that office about difficulties we're So continue that even the it if you want were that given world. in do in success on to titles preclude streaming? we

Christine McCarthy

a Sure. On streaming, of expected right have ad-supported disclosed or now, we not mix mix tier. an

consumer have don't more Disney+ to brand providing we'll consumer service, any North continue choice. Star. So are makes that our the audience, choice. avenues tier, with sense core what when And points with and evaluate price product, even reach this for and we this having be across maximum create our from But multiple that consumers to that ad flexibility is us, and the Disney+ includes pricing and our broader for details we we a additional on as new consistent of able expand the an We'll you've heard theme well. principle

earn So will as look we profitability to to expect the positively contribute our ARPU we long-term our advertising we revenue achieve goals.

Alexia Quadrani

question? next Operator


Philip Question with is Cusick from JPMorgan.

Philip Cusick

and long-term When does about huge if online parks will linear. comment in the take overall be domestic parks, for the to that I the at profitability A all I the hit expect a most if happen change happens, that then, a eventually. DTC company follow-ups, Clearly, us the both P&L year talk are of that for for U.S. model model? we've past the what's the what upside purely work? And of a versus structure of does a linear X? those on -- how ESPN+ numbers sports to seen you ESPN And the couple think as staffing or in on And potential of customers? as parks are On terms can. in parks not where at of can your the in of going Bob, can back go someday, attendance us I or well

Alexia Quadrani

to with And question? first do second. Bob the Christine, want you start then

Christine McCarthy

we're attendance parks aren't operations limit year, throughout And robustly. -- once back On on business, again, with we're come But obviously extremely and enjoying the could, when attendance choosing to using Sure. balance the are in have our system. pleased how demand days domestic attendance, and to parks they we trying goes our consumers have we not to domestic reservation back that but parks experience. the our us

consumer So attendance we're we're that a experience. something doing better is have to it but controlling,

things guests capacity. also the character April meet-and-greets But our additional Nighttime just things of that some on back we'll experience of looking And World we back Resort. month April Day Galaxy: the we've were a Walt And will continue like that really of we the brought our domestic is Cosmic at And parks. that opening Disneyland having also in with some capacity in we brought at brought back, to the Spectaculars attraction end all that. Disney forward weekend, and at new Memorial this be Guardians new Rewind capacity, our we're the to and at

Bob Chapek

future. super tell on will believe in sports. when I obviously, value take And of for quarter, could ultimate frankly, powerful, our on But domestic reach to ESPN we dominates on ESPN comes so linear And not a that Okay. were structure. to linear sports expression leg And it top pull could now, us love model to But we're sports. specifics do in for TV would it the But I going through profitability think shareholder be that nobody I our we appeal or trigger. do in I the time it that the And that think specifics the viewed powerful long how going off. to do last because that XX terms terms only have of of you when that impact And it our fan ready don't become offering to that fact, is would very will have that ESPN XX to programs that. actually our if lot the DTC on in offerings. the it's actually in can there's is third the us to I believe right of business. but offerings our But bundle. share that the really the that fans it comes the sports pull emphasize question, of would And most accretive it forward is of we're that that,

Alexia Quadrani

Operator next please? question


From Doug Credit Mitchelson with Suisse.

Douglas Mitchelson

then peaked know. just But I'm new to and could. engagement in up Disney+ Alexia, curious suggest you'll Disney+ fiscal trends content And So you maybe margin not as I and thinking as the much more And guess ramp. of I'm at X is Christine, show and viewing continued more 'XX. new this sure potential and for Disney+? separately, about XX% content for questions, you've confidence share I of in starts to churn Bob, lot fee a if let if Can for me park is guidance. international think versus to you're library, what how talk it just willing you

of a year; you shut making I cost I of but pandemic. that have idea the to could good how that was and very and the at was, U.S., little And with the you've longer, mystery. of down in theme is Kong apply parks X. good 'XX, going if china think the for what, closed for very, bit what Hong also structure part some year But you're also, you during disruption, overseas fiscal pretty the sorry what done a profitable. international but be some back look you question is a got in a parks a getting bit we're there's know you've still seeing idea domestic the

I'm if think margins time? about margins, do we over them those international to So U.S. getting curious and just closer closer

Alexia Quadrani

first up on Bob, take why you Christine don't then can And the half? parks. follow

Bob Chapek


things that a probably like get tremendous before first but of our low we with what's Disney+ you that The look first In as pleased in bundle. view, you in terms we're have DCC terms of the the extraordinarily guidance, data to confidence our know, we platforms, on from really course, calls, in that of of amount pretty why first time that watches the spent, is up. is the scores particularly of bullishness amount of engagement a comes come that to bigger platform, of And churn view also the the see, bundle us it information a churn. maybe they of when and our gives signed churn we've which the for when given idea at. said There's earnings somebody they proxy And efficient good Disney. this offerings the sort then, lot we on past

content, new elements, of going in market lot local coming we terms take markets franchises So view, very on entertainment of of added, look at terms the from a modeling each new the at can content, spend of we'll both as time we'll as that well us we model. suggests new being of like is things to to performance. first the sub they sort of addition modeling. look get we content and piece these in engagement, and in look we'll as at do in general of be it. guidance that a that, that adds of online, amount Disney+ achievable can And operating for both terms We when And

Christine McCarthy

theme bit of heard On cities. you and out a really in is negative in can said positive could But Asia, Shanghai Paris. next that for Okay. to of a Doug. of of just On we of we tell. quarter, mind. as a think trends it's keep X international comments, Disneyland we're $XXX my it And impact give some the Hong seeing I so million too you very in tale I that parks, Kong us early see

talked about domestically, growth anniversary forward And York celebration. And this looking we're Avengers of re-themed with opened of area Disneyland themed our So Avengers summer. that what the New launch seeing -- already the XXth previously theme. open just expansion the at like in of recovery, continued Paris. over multiyear one there, the Marvel Hotel, will that particularly yield new we're their our very hotels theme recent a been large its first has for that's we've DLP, is and strong Campus, has to

guests staying love our exciting. very that's And there. So

what abate. it's that seeing think -- gives hope parks but it Asia me not their Hope when me gives a in see strategy, headwinds we're in will same hope. COVID-related I our is Paris that So rebound other

Douglas Mitchelson

the If park follow the up, to put previous about you've way longer it margins domestic than for separately, maybe parks, apply and I talked to peak. just potential could Would international parks simple term? higher that both is,

Christine McCarthy

for region said with right There's going that Asia Well, for that the uncertainty it update too much we've to -- not has in our domestic. I now. of international. Doug, we're just X parks

Alexia Quadrani

Operator we have time one for question. more


From Michael Morris with Guggenheim.

Michael Morris

little but a about I'm And My Disney+. this Christine, remains tier? tier acquire? on what curious the any about this else you then prior given your ad-supported have if you you be that you a that share of infrastructure. I potential advertising the what more that sizing first assets done on the like is, of cetera? to there second, implementation you pieces Or on building bit, do in talking ownership the place rollout, Are have anything ARPU the couple or through we're touched share advertising already of Hulu, of are need et I'm advertising So service. you curious the the to anything for can can to relative

present domestically, this ad-free that are a to I'm of than Given price could catalyst be where right higher on now half still Disney+ does is raise for ad-supported service? the if and actually if you price Netflix curious you the ARPU

Alexia Quadrani

why finish. Christine Bob, don't then start you can and

Bob Chapek

tier. operations. to that to and it. with in already of terms tier substantially combination our largely experience of really our good stack in tech our Hulu shape our the into this really us bring able we The because ESPN+, doing We're capabilities being Okay. And meet ad that's think advertising timing prepare Disney+ in we're current our and software, streaming already

a So significant while. we've of to for new. due technology looking there's increasingly to frankly, that that's much we've we been even this anything to over nothing the need in any time forward this investments way And process. in that acquire or, ongoing to developing go made And automate

at is will. teams if that this well-greased, reality. a are you And hard become at something work that's making our So

Christine McCarthy

like point a on haven't information for we you So price would tier, the our this incremental at ad-supported announced on it. time,

service not that we're We profitability something makes our sense say So But tier. the at evaluate contribute and I to pricing. long-term today. work will Hulu to you continue that And we look additive can their in as ad-supported going to terms will for this of that certainly our ARPU. it with that achieving we look do what goals. will experience will And believe to towards

Alexia Quadrani

non-GAAP Okay. I measures can Thanks for joining today. a referred Note thank measures the for want of on question, us call everyone website. to were this on and to to Relations equivalent be our that that Investor GAAP found reconciliation

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implied may and subject of from uncertainties, materially of differ results of variety results to statements Forward-looking the actual a factors. a or and expressed are number risks in light

such our factors, more report uncertainties on well other thank press today quarterly Form to joining please and XX-K, filings as Securities website and want the and of and us described on day. annual wish everyone about the issued in Exchange for today reports as good to a you with and release the XX-Q For risks Form the refer Relations We our Commission. information Investor rest