The Walt Disney Company (DIS) 10 May 232023 Q2 Earnings call transcript

Good day and welcome to The Walt Disney Company’s Second Quarter 2023 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Alexia Quadrani, Senior Vice President of Investor Relations. Please go ahead.

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

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

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

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Thank around you proves congratulate certainly me a world us gives the business. Super Alexia be Universal and digress to It theatres Allow Brothers. people good and about it love of afternoon moment the to success movie Mario to reason everyone. to for be optimistic tremendous the in for entertained

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XX% XX up and Disney The averaging first games round year's of the X the the playoffs. the in most we've last been networks, first viewers NBA ever across comparable playoffs watched was million point throughout versus

improve at our the new changes, domestic parks, TRON including fourth Walt reimagined exciting number the ABC Disney Run to at continued our and season. broadcast World. consecutive attractions, Mickey's run And one network entertainment continued with and at Toontown Lightcycle recent experience guest the Disneyland, the as pricing its we for

that to company and a for embarked I’m working. almost pleased is strategically back six last detailed time transformation been the strategy at significant success. Disney we sustained the in quarter and on growth say that I've months, to for we've re-align

creative Our is coordinated, well new operations. structure as allowing organizational returning and our a to efficient, and for streamlined approach our accountability leaders, as to authority more

initiatives $X.X about our are delivering the including announced consumer We're to our and progress to underway, exceed of and number streaming optimistic target meet quarter, track last a I The direct or billion. of operating cost-cutting on well in we're I'm reduction losses this business longer-term. quarter very fronts, on

in only we've our our subscriber Combined, franchises, are the that. and meteoric since brands, a differentiator further and reinforces seen robust ago years three growth the library significant space, launch

our of we forward about path further success. a for streaming, think in have to number position I DTC As clear our opportunities business

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look this the offering end and details by to year, the calendar sharing one-app out begin will the future. we more We roll of to in forward

advertising X,XXX exciting. potential portfolio of addressable, time. grow the scale macro you streaming, near-term as improves to why. than added today. of can is our advertising combined our are now past positioned headwinds programmatic grow. over to is streaming advertising, buying in advertisers a and with third XX% domestic audiences have programmatically we including well over Over when continue X,XXX details, you over We've opportunity Despite growth the drill down marketplace advertising the platforms, across on we And expect overall focused will see which market into advertisers of incredibly more to the year, platform today, the continue the We're and this also the and

content our by year launch which what successful to to our the incredibly the the over have on can on our tier plan ad-free and a the advertising I'm this higher we Meanwhile, set to of to both this and our in price begun better calendar positioning. the of have The of Europe later truth ad end Disney+ implemented will we reflect changes already Disney+. tier on value inventory just increased pricing addition, advertising we've only is And surface term plan long-term. offerings. longer we we In revenue with do for drive bullish scratch proven year

we the loyalty model look who future, ad-free we the opt to increase to continue for will pricing the drive optimizing revenue to and ad-supported option. premium and subscriber our reduce cost As for churn, growth subscribers tier, of lower reward

business. where streaming see we Additionally, in for I'd share areas a our key improvements opportunities few like to other

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audiences our allowing potential our augment the to platforms Second, us enable while expand streaming often amortize to content across costs success us windows. at and legacy our multiple our time same

our We also to well the our strike platform between and and local program global balance programming need right as as marketing.

addressable markets, profitability market evaluating in continue calibrating at specific ARPU potential. the the our and prospects and must we total Finally, looking investments

spending, internationally, our Disney for and essential confident what these streaming for of factors windowing one-app We're Walden. experience, enormous Dana future. our the of the we're are recalibrating under the streaming Co-Chairman Entertainment profitability. model, business make consolidating work volume potential advertising doing of success are of that strength right maximizing pricing in and investments long-term leadership our position it, why content streaming's combined to we the and content, the with global perfecting that sustained rationalizing the on the The and our Alan growth the and Bergman now opportunities, our business comes we're path All we

we've with the parks business we key our the This of this parks, see been our past for pleased as driver internationally. growth Turning especially a performance to quarter, company.

growth. We have Disneyland first At investment our on-going international have And underway parks Campus will including our been drive year. its we several Avengers underway currently to land resounding in development. and Paris, a allow in expansions continue a there, longer-term build to success that Frozen-inspired has capacity

its Pan's later Disney coming in the Kingdom, Our be this Shanghai at year Zootopia-inspired at expansion anniversary, open set And opening is year. Resort. XXXX. World the Tokyo half Resort, the Disney currently Kong opens Arendelle, new the in of Neverland is and Peter Rapunzel's will expansion, Frozen Disneyland to of Forest, which Frozen celebrating XXth Hong second

that for well guests visiting the coming expanding further on additional World, Regarding experience our Walt days will improve domestic for parks, the Disney access we holders for changes removing XXXX need reservation without pass just announced guests as tickets. as an visit additional for with certain reservations, to in including date-based annual

how our opportunities it brands sets and evaluating to investments. unyielding just future guests our ways where makes and we're And another our their our of world-class is at Disney of and parks direct franchises, powered sense the to by continuously what finding is apart. we're our number example business listening we experiences. content, and most improve a growth parks and closely The expansion unparalleled have of popularity to This other

our of a beginning, stories We're every segment including business, Pixar's our Destiny. hearts very into summer to Disney's and this special Jones illustrated of of with characters of across The key Dial slate Mermaid, as Lucasfilm's theatrical in and strong Indiana generations years been leaning the fans XXX The have and timeless place and our the of ago, our Little families. releases, From Elemental, hold and the success

to the alignment of I Marketing marketing that these at As for our past Officer there an across coordination structure in to role his clear in as Asad our we've our of been increasing by businesses. what's harness looking potential become That's several full and Brand studios. Chief why President enormous first Ayaz ever months, company our the named opportunity is is addition

For businesses. more to have content, successful consumers, the with products. experiences, offerings integration now years, of able in right our streaming, our audiences from reaching our our And incredibly with we're points the across be been and more touch in especially greater right with efficient and businesses successful marketing

audiences be continue and innovative ways a means speak our guests And to I deeper to Dana, say approach and seriously. for even take world. work. connections that this brand to our when taking Disney that's that to with Josh, us. have around proactive our goal we and thrilled much to people allow That's finding Alan, new I'm Jimmy marketing so I I so so know the Chairman, terrific And many privilege more why is

I turn With to Christine. will over that, things

good Bob Thanks afternoon and everyone.

year. $X.XX per certain items, share, or $X.XX, fiscal the diluted quarter, a versus earnings prior second decrease of Excluding

our at business. linear deep by consumer, that we're to improvements offset up As than declines more direct and network's

to As targets are excellent initiatives our meet the or Bob we efficiency exceed quarter. cost-cutting on making track we mentioned, and outlined are progress last on

restructuring took $XXX a approximately QX, During charge to related we severance. million, over primarily

we with year quarter. in While expected of to the of our to the severance over expect fiscal $XXX currently continuing charges bulk estimates, additional record this approximately are additional remainder that we the charge of refine million third

to strategic the process in are approach our discuss. content on our DTC curation you've services We align with to that in Bob reviewing heard changes the of the content

quarter will third to content. complete our take charge, in currently result, removing $X.X shift. charge not the produce as of volumes from an we to be in and will the impairment recognized remove content a going platforms of be recorded with primarily our The lower we we And million in expect $X.X be content will results, As which and forward, our certain streaming this approximately intend strategic to billion. segment review alignment

at the $X results in by was quarter and versus prior Now, our starting a networks. Business, Entertainment decline operating in to sales second decrease linear declined a content licensing quarterly modestly. DTC a with dive year primarily Distribution billion driven into and operating income in results improved our segment, other Media results by year-over-year

is due were driven domestic the domestic programming networks. last we costs both driven decreases by linear guidance million costs, linear at At with given our discussed of our results linear for at and the and this $XXX broadcasting. networks of decreased At consistent cable were production the approximately cable, results international football at last million higher NFL sports largely The quarter, playoff college to by which timing and $XXX networks, and quarter.

advertising our revenue reflected costs. network in the contractual addition In sports television across ABC broadcasting to and rate increases results stations. own and NBA production decreases higher Lower

Second TV certain affiliate by the stations. decline X partially from offset impacted timing contractual by by percentage quarter X point Rate prior year, decreased points growth of linear revenue X point subscribers, recognition from fewer by of growth revenue non-owned X% from increases. the a adversely driven from networks was from domestic rating

marketplace advertising ad XX% non-comparable with ESPN sports domestic items, flat is quarter, domestic sales is up for cash CFP quarter-to-date stable, adjusted year-over-year, ads Second X% up. currently certain revenue linear linear ESPN revenue or although timing. including advertising declined pacing when The

entertainment However, the overall advertising been challenging. marketplace has

continue the moderated the anticipate of half back weakness year. somewhat, has While softness we into some may fiscal the that

we more But advertising are in capabilities as it revenue, be optimistic programming about partially offset look upfront addressable next International relates Bob we throughout particularly programmatic. to prior our at in versus decreased week. our by mentioned, income cycle, the the business presentation and by leader our sharing lower And continue forward to advertising ability year, to operating as a costs. driven details to channels lower

sequentially to operating improved versus on approximately Moving QX. by direct-to-consumer, million $XXX losses the

Disney+ quarter, increased by XXX,XXX with net During modestly, to $X million. grew international additions. subs, the second close Core over core subscribers

growth price from quarter in QX, strong increase, QX subs QX. we we may linger XX%, domestic into the growth. While the ads in net continued domestic do And softness the while ARPU to revenue by expect impacts reflecting domestic increased in saw slightly Disney+ subscription from rebound sub sequentially core declined

last At by with ESPN slightly ARPU we the was subscribers softness advertising Plus comments lower and quarter space. per-subscriber near-term revenue, Hulu, the Hulu the in addressable in made prior regarding impacted quarter. advertising over increased at line

expenses, versus DTC the costs, production programming quarter and SG&A, including second declined in QX. and

shift expenses will to of part in changes timing results quarter and recent contribute operating about costs driven Disney+ our outperformed approximately slate QX of widening shifts QX. versus in due by DTC some million, the third marketing $XXX of Hulu. direct-to-consumer losses to into those million QX at by $XXX Our operating The guidance by

price will advertisers, not improvements As the our we confident to but continued increases, changes we results improve our strategic time executing our relationships deliver, content remain opportunities take on duration and in long-term before, disciplined the our given path planned as trajectory, with have to our further approach linear, be on-going costs. and to expanding we're strategy, noted with

would shy a of in second roughly in At offset due of versus to be Licensing decrease and mod quarter that in improved due Content the year continued $XX the we quarter, a our bit guidance results, Avatar, the distribution prior of distribution Sales million results Other, results prior Water. results The a break-even. generated loss theatrical the success Way by partially TVS were to Lower

anticipate fiscal In Destiny, prior the will million the timing quarter, Indiana late decline key this Dial releases, of year, of million primarily $XXX third by quarter. In by very Jones, versus of the business's we the Elemental, marketing results in not $XXX to The titles, theatrical operating premiering until and driven with

products. on to the both experiences domestic Products, Parks, merchandise consumer with lower Experiences, billion, increases partially operating prior Moving offset over $X.X at by by international versus year increased licensing and to parks income at and XX% results and

by spot Disney Kong Disneyland and higher were international bright Resort. Disneyland a strong growth Hong and results parks at Shanghai this operating year-over-year with driven Paris, financial improved Resort, attendance quarter, Our income

operating year, year, our year. by still over driven the offerings, by continued XX% cost income At Results was and from of parks up guest cruise offset gain in wage earnings and domestic below parks the prior but in cited cost a with last to experiences, sale domestic the associated impacts. new recovery line, a a generally including pressures versus we partially comparison quarter's income in the XXXX. the QX versus prior real primarily reflects estate call, costs post-pandemic inflationary other operating increases, came slightly prior XX% increased

parks we moderate prior comparing impact year's and experiences respectively. against in increases quarter, X% to as first the and both quarter X%, more comparable Domestic estate the year-over-year Lightning was per offering margins operating were prior growth of Domestic are full year, real and this capita the at prior Lane of attendance in spending and adjusted year. parks were sale. the GeniePlus for the once Per-cap

at there fiscal successful and We unfavorable line World. some been XXth keep the trends. year, we performance moderation these this typically historical see as back that the quarter-to-date events, types in Walt of be in will anniversary mind against Please those half an comparison of with celebration incredibly has year's prior demand in in Disney lapse third

coupled with expected third pressures, new parks year. impact the from union domestic to a is adverse agreement, drive prior operating cost in This quarter the to inflationary and including comparison, to margins modest experiences a compared

margins QX DPEP performance year. in expect international the prior parks higher from at that than contribution strong slightly are we However, the our result continued in to segment-level operating

in our DPEP all will will to focus be with business continue growth our for company, on our a and we manage of line guests. these enduring factors

like we Before this I the for company total a note related conclude, couple of items expectations would year. our to to

as at technology spend fiscal is of from last of expected approximately spend roughly well the we largely excluding guide DMED. fiscal to prior as strike, to For is timing writer will comparable due expenditures content DPEP at impacts capital year, that $X than XXXX, projects cash expect our remain to any XXXX potential This billion. billion, and company-wide $X.X total lower lower

We range. generate macroeconomic content back incredibly impact advertising moving operating this creation we are in state single-digit optimistic executing market, for our to the our you we progress. still the many But factors, keeping There about and the expectations we pieces, on grow that are fiscal of still half can to and value percentage on company, opportunities are long-term currently shifts, Bob including for high XXXX the forward of mentioned as look changes the global income the year. timing and could updated earlier, which revenue and plans expect our

Alexia that, I to the Q&A. for call turn will And with over

Christine. Thanks,

to to today. us we help many possible as one to as we we're As with operator, question to limit answers you order first to please try that, for get in yourselves ready Q&A, And ask transition the question.

come now [Operator of the Instructions] will Ben Please Morgan question-and-answer our will begin session. go And We question Swinburne ahead. first from Stanley.

over of the Good price wanted One afternoon. you. two increase the Thank months. about ask around on topics Disney+. you on I sort learned you Bob, what last is several to

can that base power little think you've company you of sound over to can the Obviously, the commented you a bit in customer just you looking it talk you around drive sort went pricing gives reaction that for and ahead. and trends. subscriber You've we optimistic And continue about what that confidence engagement time. Disney+, the well. Maybe see ARPU seen

And for similar then question sort the around And company? that Christine for teased short the you drive financial to that guess, cost the opportunities you're reorg deep the much. that about do, I Thank a you question sort results rationalization better at into have the But expectations. do you of very more that. exceed learned there opportunity maybe cost the and side. is company, there's now of might it, think to What more on to be

Thanks, Ben.

we to ad because the potential reason, drive subs widen clearly that some surprised It leads product have substantial the what but supported did price by believe of in things in the to the in I pleasantly fact, Because for the service. the that more we were have subs to the got that discovered, to us delta question increase service due the elasticity. but de the loss Disney Disney+ the to to only minimis. of of pricing have was ARPU which we first, ad-supported the would of we, increases, On regarding the mind, the first relatively not a supported we With That service non-ad that was was service, between pricing one small. believe way, do, like was it loss, that obvious that non-ad think we is ad-free and we quarter, Plus. in we've

going advertisers, and an lean and us Rita up the digital our with digital in the prices led to mean, the into modest, advertising Suggesting, really that we because advertising for as ad-supported. the higher our team, opportunity delta, maybe ad-supported relatively by Farrow, there's growth quite to increasing up ARPU on look so subs this is fact, be attractive again, careful a front. prices I in the increases, ad-free, after raising considerable front a direction. discussion driving see no obvious on there's perhaps And to substantial that more sales reason, for in substantial. to we keeping in And this

I'll will are tag team she we thing reductions heartened And as mentioned, we're is path or quarter. and help on we, to ultimately we along which the categories, Christine strategies That with to us second meeting and spend growth, with $X.X by one billion it, the on growth, And is cost Clearly, last believe lead we that this. that you mentioned, we're So sorry, in exceeding that two a the of optimistic. comes in profitability and in that mentioned SG&A. content cost rationalization.

the the I'm XXXX. pushing come time, the we among get going the to again, said the to we the timing impact of But viewers, more are starting were price ad-supported, let have. the I'll and profitability. handle let the so content in much increases, what content would most handle the at subscribers things reductions and in Clearly, are the Christine potential to and Christine into XXXX, because that to doing SG&A. cost of XXXX on spend, containment SG&A that sorry, to we more already will committed

that different through reality looking looking become more other been because the more need that we're of this also there's up the effective of we're and finding our of progress progress. opportunities to did across that $X.X I'll other we which And we're which redundancies, at seen more into that. can cooperation But SG&A But eliminating there's has resources, the gotten entire exceed by and, rewarding, things into on also would those. to at ways Yes. lot course, for utilizing company, businesses. reductions, great headcount of and Hi, people There's billion. been further other good this, targets thanks had. some on But, we've going resources we're and throughout we as we've there's of really that I we've a all by just that picking the that really leaning do elaborate saying technology, Ben. ways tease

really say to the it of the balance the Some be, end some, going fiscal XXXX. real will of I this and help us be will impact realized is the year. of in But at year, in

again, look business it it something again, all having since and we be the leaders once looking comprehensive I of buckets. throughout company having, But, SG&A once we're our it, that wide a for all into are be have think, embraced, real

add those content. of markets. in around thing markets, And more ARPU very spent one not We including in we many money markets world, those we Disney+ and to money that, low only launch we a marketing the did launched many, Ben. on And many to lot on in spent local but markets,

the we business rationalize clearly and just profitability, at opportunities direction So, in reduce markets isn't the in potential we're expenses to those we looking revenue as this of where head there.

Thank Thanks. both. you

question. next Operator,

The go of ahead. comes Phil JPMorgan. next question Please from Cusick

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think business should the how investors you. for Disney? So, Thank and the long-term about risk, near-term both

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Bob. Thanks,

next Operator, please. question

Please of Nathanson go Michael from ahead. comes question next MoffettNathanson. The

impact your and of a you have offer Thanks. the as the do one I subscriber is, two. the first have global think in DTC on app Bob, to will what slowdown then content U.S. does for what you spending move in the solution? growth,

content future will said helpful. content cash there Any spending? You this future help from seeing this start Christine, this Thanks. is flat. year? year, And on Is any peak be help year on the declines cash then spending we and

me remind with startup let everyone, wanted it in so-called Michael, goal obviously, possible. we know, much growth digital years was, and many only half as content global The a ago, launch a as and this much we're three shelves service, ways. when we the sub still as flood as you achieve, To to possible. subs, so as was

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Hi, Michael. I'll your on content address question spend.

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question next please. Operator,

Please Ehrlich from comes Jessica next Securities. Reif BofA of question The go ahead.

bigger Bob, will the you you. upfront, take that Thank you a share. in mentioned

you linear AVOD. to You'll I'm losses lean sub-universe or Plus. when thoughts the and heavily into digital in that will to drive I'm be losses, just enough ESPN your linear growth? pay-to-view ESPN And can start if enough how transitions, us the it give or decline face accelerating to transitions just is in offset it universe offset to on of or wondering, wondering and decline, it when thought,

I'll first. ESPN address the

right, haven't programming. know, And on don't make, is us that. we've terms know a and What at it advertising you even greater such anything, a we linear saying know, a of take business, changed get to service comes sub-declines than of structure both got in impact pricing that the to position if as but a circumstance those migrating we're to think on has do on and economics ultimately platform. it the anything decision having not impact forcing have networks, to We basically more an the and and to us cost that's direct an you going Obviously, were that channels, of probably I'm in it which flagship us, that look seeing regarding We timing. spending weakness. it's channels, on our obviously negative as because see not we on that impact it's to there's linear will only down, worrisome created for that, inevitability we but both direct-to-consumer ESPN's a huge streaming or really it's for

why put streaming business the we're taking, the got that business seeing steps changes, and advertisers exactly that way, into we a by we've streaming invested the effectively want. advertisers something program, that XXXX-XX, Jessica, we growth way that's why turn what granular in much that into changes a is with is, The the how business into technology on decline predicted serve very, which starting the even terms marketing the automated we more we've in very more with, us by fair profitable in declines begin but in sales a lean pressure and functionality digitally the to us, to of business reductions, of for the organizational we're in also, in the advertising, the both needed structure, the cost to way, delivering amount the all

way. will positioned very bullish We're leaning by ads in Hulu Hulu how opportunity combination, of advertising. our growing experience our digital and by one-app bullish making about and into about there. our a available So about We digital terms we're increase increase business. We're Disney+ and the bullish advertising we're serving as engagement that and think that

all streaming ESPN all businesses been to a need bundle, the the the to profitability. to connected, linear steps the we've are as the long-term and, kind and the things course, reaction of of to get grow deterioration that of growth So to health taking of

question please. next Operator,

Kannan Venkateshwar ahead. go The Please next Barclays. question of from comes

sounds services change with mind allow Hulu it's plans up combination it's the Does So scale. by oldest the or Disney+. single made content of announcement a you've cost maybe And make service? this would of raising the spending of revenues it biggest the businesses around, streaming despite your it of of Hulu based Hulu on profitable also Hulu, on of Bob, like but and one around, seem you. doesn't to buying rest Thank the one the it the be the be because now and appreciated. color the price any titles you combination much on Hulu with Hulu your on dropping structure to number on of

parks, help that. digits the historically, increases faster for mid-single and you And, could year? and Christine, business growth, revenue that Florida on how recent impact better the And, impact us than delivered has wage the grows scale might the of the EBITDA in

a costs. higher but cruise of ships, more also number have attractions, price, now You higher

growth So going algorithm could you broadly? more you. help us forward about Thank the think

in another and really from positive, a From know, also in general was share to came is that a early study regard, that I happen acquisition, the us on to it's have very determined retention is more we the XXXX, streaming business. on back I with after Disney+ a that we or strong in is first fully except And our have And enable everything grow and the to right had Kannan, did business, that contractual combination mentioned everything the will guess, subscriber earnings call not a as a, them Comcast of us I a was of fact, now will you that them. at it's best on advertiser's table. a path subscriber perspective. that more perspective, with call from entertainment to from XXXX. of content Hulu is early that table. that an arrangement as their we what very out further and this combination. in clear subscriber figure put look there's carefully what growth months back been But really the and this their future share perspective, at Starting I And, three I've to for the the

I say in some are of hands that headed predictive basically content How in way together of with the or is terms unfolds conversation for the hands have and or have that be Disney+ about that a Hulu them. up, to experience ends say be don't to say general some general reasons negotiation being there only So that that entertainment if the cordial end value aimed one already. ultimately any can't and in entertainment can't up. in we've tell we're I that of that. we how with is they're and we I conversations just would extent Comcast for seems can at been when real They've a want I had them combined I really where is they to in you described. that Disney+. ultimately constructive. solution, bullish with having and And But to where

Hi, Kannan.

and your earnings me on parks address Let outlook the question there. growth

new And is with do few would quarter our union predominantly. said, overall think also year to way is I alluded inflationary That with some first expect a most We do that So our the for coming wages costs. really And guest coupled from phrase call. we domestic a parks. I contract increased in areas trends. we earnings offerings. this the they're One solid we have being really new expect

some cruise with expenses So for cruise there's operating a also come operational support those. And the fifth our incremental along adding ship that we line have fleet. to

launched know I that we fall. the think you all Wish last back

a to downside and pressures there then job variety the of But across mitigate a they team continue look margin great risk coming The address we ways has pandemic the pandemic. So down utilize throughout potential cost done segments. and the management. at to of out tactics to

give is And the customer be the that just back our strongly the this we business. from But we to the during come business going for meeting a attendance. utilize talked the valve I we so last call by the that capacity come a attractions, increase the capacity on growth do they open some looking over that, to in some at business, most of want really That can they're said year, footprint past. up get our on or And and more they with are to will experience attractions in to the newer of back some as address on But the continuing only are to can And us. also people more increase impacted. bit in coming levers was that, are but little And We've think cruise it the fiscal you more that to incredibly out there. come while a wanting focus needs new not year. so about new know, IP, enjoy based in we closures this has business had so was business And pandemic. last that that there. really our to

we're And fleet. the ships also not even looking encouraged our what fiscal there of only the our ship balance out but to to year, reception legacy very within we're seeing new our the and by

please. next Operator, question

question comes of next from ahead. Guggenheim. Morris The Michael Please go

to there I'd Thank advertising. direct-to-consumer early. And details the wasn't the the course Disney+ share a But hear to mentioned love driver, takes It realize hear one afternoon. and might it's Good over you. ask early love about that on as can of product. pace any any I thoughts I you would advertising I early to wanted year. how and with about

impactful something like very love ability to and clearly have just intelligence, topic And much seems hot technology be a property your that a be to also artificial Bob, given a right to that protect as could pretty I'd ask threat use both well. intellectual it about your how now, then to it but could you second, business,

time. So how Thank I'd that you. on share the love any takes you can that over impact business would

a AI to earnings me. time get looking for cheeky, to calls does Not Michael, maybe I'm forward where

know probably Maybe You wouldn't the I difference, be don't know. perhaps. better. they'd

I'd use to the too. ask questions, AI

substantial pretty that opportunities for benefits. some pretty interesting developments some AI us represent clear It's and

will from to we're disruptive, also that not be to here, to we're some AI come I ones. and provide that IP legal try AI be already be to what and In extremely particularly the our some highly already to and better could going opportunities certainly team can that. to overtime you the manage, difficult clear only serve consumers. is could efficiencies is is do perspective. AI goal it real working to challenges create to the of to an and with grips management tell it's that of customer Getting closer a But we something to use some is ultimately starting think fact, that great ours,

this think not industries. our is but I industry only across

and to I'd services basically have the provide say to create So us customers. for I better because ways bullish overall to about think efficiencies I'm prospects they'll

not going more other specific to quite prepared hand, to challenging. there's On have am Getting right disruptive with a now. something the lot I we're be think I is and that really do will that to quite contend

for Hi, ad Mike. tier you. I question the will Disney+ take

at surface Disney+. advertising we we begun to longer-term know, really back the for you positioning. just do we've on as As on launched in December, advertising we this of opportunity And incredible an what can scratch look and

Just on our do still come notwithstanding what very the new existing on have very that. and have into only that into Hulu seeing consumers everyone, lighter load we but by also a to Disney+ we're the advertising sign-ups also we're we versus encouraged macroeconomic challenging remind tier, come market, ad not ad so

tools a and lot in has Bob advertisers, our data our previously, As have mentioned tier and addressable providing programmatic to state-of-the-art invested so really ad we platforms ad technology our for not the those ad are also off gets only we for pay us investments the market to believe that we've going made future are but well as today and position stronger. overall

be on that be of for of ad will that is we'll The the consumers outside other by I we'll this have will in that mention just so calendar platform launching the the have or Europe offering want Disney+ to U.S. year, end another another tier we thing

Operator, question. time one for we have more

The Suisse. Mitchelson Doug last go ahead. comes from Credit Please of question

Thanks so much.

you consumers. the Is into that launched while you Is of integrating streaming single that approach and opportunity Just both. noted time was curious good monetization and to expand if still content a finally or just add if for of Bob, peak for ways the Wars you your separate for Disney+ buy in suggest to give a and app, subscriptions so platform platform, have continue into turning app conversation. efficiency that have the Disney+ that you would and choice? When to if other having see you the answer should to you maintaining flexibility was premium Disney+ Star could not the through Disney+ Hulu Christine. right can live struck yes I'm consumer that is losses? that the one can want XQ choice Thank is the just on on consumers at Disney the a I And platform approach. experience multiple the services consumers broaden and thought content, fiscal is of number And that I but Pixar if me and afternoon. give to get services Marvel to wanted right the to intriguing, entertainment to

-- that to subscribed on that We have announced that's experience now. the services for consumers for today, integrated app both we

one what other So for words, one a close call and it together it's one dual one? and in another is consumers. to Why it app bundle in So putting experience, open becomes good we app which have experience. taking the obviously out

be We general, lower it will basically more churn, benefit also attractive. think consumption in that

have a why it the Outside created platform, well. content that it's basically of It's Star, one States, Christine amount advertised which more an United and an the a all-in-one. reasons before. that than it programming going just It's to launch quite with we're working platform, offered we as mentioned. doesn't Hulu, all as has supported the of significant bigger it's And but

I to maybe the your lessening harsh. advertising, well little one goes general That growing one think So engagement, churn, undifferentiated. question, purpose an and app for of was entertainment, that costs. we're part curated answer Disney+ at includes entertainment question, reducing beyond bullish your a growing the general quality about of point growing But fees, and growing address to I that subscriber called branded which content includes

I'll And on Doug. Hi, losses your the answer the direct-to-consumer peak and question losses.

quarter November. was quarter had the that in we fourth direct-to-consumer is say, Just XXXX. That in the losses to and peak it did remind everyone, that reported in we case, we the of

sequential, So then improved since on is basis. seen what linked-quarter you've we a

in timing improvement out QX, releases that QX. $XXX widen comments, You've would another of and of QX, my $XXX million say $XXX seen million I in In releases. because marketing by did particularly some it those of improvement a million the the

path, that But losses a fiscal will but we balance be the QX because from will significantly linear through not in XX XXXX. of peak improving it's an aberration be

year. that quarters, in then that back saw the there and you So, should of the be back be peak was we in the for for two assume next QX we one improved will the balance QX and the to have path what you blip loss fiscal little expect on

helpful. Very

Thanks.

today. everyone the non-GAAP can of GAAP Note that measures Okay, measures fiscal to thanks investor joining thank on question. a that reconciliation to referred relations us sound I equivalent were on want website. for to for the

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

from Forward-looking results DTC cost the statements with are results differ expressed profitability. economic and subscriber, a to including factors subject and plans content, of actual and growth including and and operating in to variety industry or and organizational of execution light conditions our and may a implied in-connection savings number business risks, relating of risk structure changes, uncertainties or materially revenue

in described our FormXX-Q to form we uncertainties us about and you release for issue the a other day. For relations Security the factors the joining Exchange to We more XX-K, today, good information the findings rest investor everyone press and and key thank of and risk for want refer please website, and risk our the today wish Commission.

attending may disconnect. for you today's Thank and concluded. now is now you Conference presentation