Disney reports earnings for quarter ended December 31, 2022

BURBANK, Calif. — The Walt Disney Company (NYSE: DIS) today reported earnings for its first quarter ended December 31, 2022.

Disney Media and Entertainment Distribution – Direct-to-Consumer

Direct-to-Consumer revenues for the quarter increased 13% to $5.3 billion and operating loss increased $0.5 billion to $1.1 billion. The increase in operating loss was due to a higher loss at Disney+ and a decrease in results at Hulu, partially offset by improved results at ESPN+.

Results at Disney+ reflected higher programming and production costs and increased technology costs, partially offset by higher subscription revenue and a decrease in marketing costs. The increase in programming and production costs was attributable to more content provided on the service and higher average costs per hour, which included an increased mix of original content. Higher subscription revenue was due to subscriber growth, partially offset by an unfavorable foreign exchange impact.

The decrease in results at Hulu was primarily due to higher programming and production costs and a decrease in advertising revenue, partially offset by subscription revenue growth. The increase in programming and production costs was attributable to an increase in subscriber-based fees for programming the Live TV service, more content provided on the service and higher average costs per hour. Higher subscriber-based fees for programming the Live TV service were due to rate increases and more subscribers. The decrease in advertising revenue was caused by lower impressions, partially offset by an increase in rates. Subscription revenue growth was due to increases in retail pricing and subscribers.

The improvement at ESPN+ was due to growth in subscription revenue attributable to increases in subscribers and retail pricing.

First Quarter of Fiscal 2023 Comparison to Fourth Quarter of Fiscal 2022

The following tables and related discussion present additional information about our Disney+, ESPN+ and Hulu direct-to-consumer (DTC) product offerings on a sequential quarter basis.

Paid subscribers (in millions) as of:

                                            December 31,  October 1,
                                                    2022        2022  Change
                                            ------------  ----------  ------
Disney+
 Domestic (U.S. and Canada)                         46.6        46.4      —%
 International (excluding Disney+ Hotstar)          57.7        56.5      2%
  Disney+ Core                                     104.3       102.9      1%
  Disney+ Hotstar                                   57.5        61.3    (6)%
   Total Disney+                                   161.8       164.2    (1)%

ESPN+                                               24.9        24.3      2%

Hulu
 SVOD Only                                          43.5        42.8      2%
 Live TV + SVOD                                      4.5         4.4      2%
  Total Hulu                                        48.0        47.2      2%

Average Monthly Revenue Per Paid Subscriber for the quarter ended:

                                            December 31,  October 1,
                                                    2022        2022  Change
                                            ------------  ----------  ------
Disney+
 Domestic (U.S. and Canada)                 $       5.95  $     6.10    (2)%
 International (excluding Disney+ Hotstar)          5.62        5.83    (4)%   
  Disney+ Core                                      5.77        5.96    (3)%
  Disney+ Hotstar                                   0.74        0.58     28%
   Global Disney+                                   3.93        3.91      1%

ESPN+                                               5.53        4.84     14%

Hulu
 SVOD Only                                         12.46       12.23      2%
 Live TV + SVOD                                    87.90       86.77      1%

The average monthly revenue per paid subscriber for domestic Disney+ decreased from $6.10 to $5.95 driven by a higher mix of subscribers to multi-product offerings, partially offset by an increase in retail pricing.

The average monthly revenue per paid subscriber for international Disney+ (excluding Disney+ Hotstar) decreased from $5.83 to $5.62 due to an unfavorable foreign exchange impact.

The average monthly revenue per paid subscriber for Disney+ Hotstar increased from $0.58 to $0.74 due to higher per-subscriber advertising revenue.

The average monthly revenue per paid subscriber for ESPN+ increased from $4.84 to $5.53 due to an increase in retail pricing, partially offset by a higher mix of subscribers to multi-product offerings.

The average monthly revenue per paid subscriber for the Hulu SVOD Only service increased from $12.23 to $12.46 due to an increase in retail pricing, partially offset by a higher mix of subscribers to multi-product offerings and lower per-subscriber advertising revenue.

The average monthly revenue per paid subscriber for the Hulu Live TV + SVOD service increased from $86.77 to $87.90 due to higher per-subscriber advertising revenue.