The Walt Disney Company (DIS) 7 Aug 242024 Q3 Earnings call transcript

Good day, and welcome to The Walt Disney Company Third Quarter 2024 Financial Results Conference Call. [Operator Instructions] Please note today's event is being recorded.

I would now like to turn the conference over to Alexia Quadrani, Vice President, Investor Relations. Please go ahead.

Good morning. welcome Call. The to Quarter Disney pleasure Earnings XXXX my everybody Walt to Third It's

release, XX-Q on press this www.disney.com/investors. Our Form morning issued remarks and earlier were are available our at and website management's prepared

call the transcript, well and call. presentation, all as a on available earnings as be quarter is made being third our Today's and will replay webcast, the website after

today's consisting previously announced, call only a we a format will As new session. of question-and-answer follow

Disney's Iger, Financial Chief Officer; me this Bob Joining Vice Chief are Johnston, Hugh and Executive Officer. Executive Senior morning and Instructions] President [Operator

that, the we're with And operator, ready first question. for

[Operator of comes America. Instructions] from Bank Ehrlich with question Today's Jessica first Reif

two, I'm on NBA. and theme going parks on try to squeeze in one one to

I of So park first you coming Maybe ships moving on or provide next, have will XX and months and Can demand quarters, include cruise ships about for expectation OI fiscal that we on this level think global color you as with mid-single-digit QX 'XX? the about theme here. parks, protracted is so. decline lot several to since guess, the last you three the this fiscal a pieces expect where from weakness? think right the over the benefit stated there's that on And really

there years? step-up the make in the drivers, And monetization can dollar contract contract the the profitable when likely growth, 'XX. incremental million rights WNBA NBA, hundred new Are with in have new on now complete, early including several you'll the that begins maybe fiscal

to first answer X-part was can. try This it I'll Thanks, is I Jessica. Great. That so a Hugh. as best question,

change. our QX. had growth apart while call saw does demand, a attract peel to parks. significant I certainly audience. cancel want slight just in wouldn't I strong is is emphasize to it in we we moderation obviously a sort X% really actually vacations, First, reason reluctant strong IP people a And are the so in again, so It to QX, revenue The of

business domestic saw consumer products, parks, quarter we and we up is a parks domestic said, XX% ships. of saw attendance That in Within actually Experiences cruise is It's either the international flat including bit. income that, and parks. the not little an perspective. that's per operating from caps XX% or

We number QX we expect out as earlier the And mentioned in see to the in a -- flattish just really in revenue coming letter, few parks. quarters. a of

couple think protracted, quarters don't So I'd just a of as but I it refer of similar results. to likely

our our some do would I coming in we in, keep ships in 'XX. will us offset this as than we've and bit just well affect to for a attached and slowdown mind, Now of 'XX in both overall, that a Mufasa. expenses But bit call a expectations by so that's as as far have more and the Entertainment what bit seen X Moana a business, being

of year year, Regarding that let doesn't later. Jessica, everyone deal, and next remind you just kick in the NBA deal it's me first the a all,

the have We current year more deal. on X

one all, significant now years, goal to finals the have means call the we A XX which we the was XX package, for at they of or got for years looked what as finals first and more for maintain drive us. And it, we we've value

to WNBA It value growing delight We the of a delight. been know also deal the reflects of large value of that, growing programming. live There's advertiser's the component audience and also women's value sports. and the basketball an this. overall, Also, that's reflects an

at time, to sports as of it long the ESPN this the to to Also look in some as XXXX. digital has period the ability while been and for our in particularly a direction, time rights of we of strategy secures deal, bring part ESPN end a of for launch lock flagship

So we from in digital. of pieces time revenue moving that be a in, of more the driving to this distribution terms in kicks year will by that a believe now, lot place more the in advertising revenue,

that rights, in here every revenue international particularly markets. in is thing finals, drive secured world, deal. some not that tremendous years, in in specific done the we've another this early but the be about to the value but going Not And will we've market And well. as there's most added around profitability to the

Our next question at from today Swinburne Morgan comes Ben Stanley.

sort earnings wanted significant company the of outlook you the I Disney+, about this the Bob, ask as becomes also Maybe where look how for context both for going, contributor product but of to in to the a you is ahead.

at And it's broadening. when product, the really look we

obviously You've in Hulu. got -- brought

added Now sports, the you've the of to international ESPN you're product lot adding NBA rights news, overseas. in, coming a

here? the continued in out consumer it there's there does What's vision that I growth mind, pricing And the support your price and both probably subscriber think concern some might some increases face pushback. power? recent

your get to big topic. that on So thoughts I'd love

you parks I clarify, talking Experiences when are flattish wanted say to just just comment? clarify. the Or domestic I Hugh, you the wanted level? QX, at that And to is just about segment revenue

and we've me, start success is streaming largely let side, Building, television our significant of seeing and Well, Elementary me the by go driven XXX whether and Shogun the by and saying the led Emmy on can been that by nominations, Only believe the it's creativity, company had Murders Bear in shows what like The with success on. on I Abbott for and instance,

drives of on we've the had picture television in current huge you success, And at when motion creatively, on recently. And in success terms profound. picture the value it's front of the what look streaming, obviously, top motion lineup

had it's movies. consumption and same Deadpool and trailer The in the our Inside tremendous could the the true in first of is for early November. go movies, has Planet comments the on. for X Out the today, launched film Apes first since I thing for on Out, Inside early So

seeing Hulu, growth in programming everything from we portfolio gives which is pricing leverage on offerings have. IP, basically So FX, look the that's Disney-branded, when Geographic, National believe we seeing and of ABC, across includes of FOX-branded, programming our we're that this from the consumption we our what we're popularity us and obviously,

a price every be that adding have increased. later to increase, as concerned. churn and nothing actually of that channels consider year, time we're that that that -- that add we like and believe going we've this pricing the that, we slate, So little into that had only these success more, would get leverage not the has I'll from We're modest we new significant. we've movie We taken bit our a the features,

variety buy adding adding news, the is which we're the is aggressively bundling tile the our programming, to we're why that mean The I it, of platform. to what goal obviously creative why ESPN all engagement to we're ability is by across And on basically a grow consumers engines. wider to offering while give of

it's more we saying you that feel bullish the of nicely it, XXXX. can to And very in about expect much about We're fiscal business. except grow future not going this

The about more doing features other we talking we're it the a basically that need is successful technology been lot that now. business make thing I want that to business. a to adding add a and And right higher-margin we've higher-return,

in technology, by our more future we're we backlash stronger and on on need this to gone that But to We June. We the started business. that September. initiative both have efficient. we need already and in had work the we've that all features, and side the at That to our no of know the in, of working that By we've make earnest marketing the bullish recommendation and on programming the out in side, adding kicks technological been way, notifications password-sharing we're also all engines, these doing. about

you Hugh and And about mentioned when then over it, think -- Mufasa. Moana

releasing almost Let X you me just movies that in next the the years. read be making to we'll and

only America, there's Mufasa, and about Avengers, few. streaming reason just think in those we're I you box Avatar, office, Captain Moana, be think but Snow potential when to Mandalorian Four, name Thunderbolts, have Fantastic potential headed. about to the And bullish White, those Toy the to a of drive of global value, Story, a not where We Zootopia,

Experiences. your was And Ben, Flattish reference to question. answer to in other

Robert with today MoffettNathanson. Our comes from question next Fishman

all Bob, investment and is the sports, going of between think of about movies spending now, especially talking about NBA for just the content as content TV you're deal forward? Disney, balance right what the you the scripted and future after that

you go? And update to then X us Hugh, on about how free free 'XX? just on can And cash year parks to quarter with for impact cash in think the content flow this spending expectations flow the and

of top creates the is it We NFL. and are in the that Well, it of top value our part sports, represents because directions NBA that the in college on streaming. we've that investing to made. and value we deals of obviously long-term Obviously, the talked also because all about and future of football of significantly that the

our the terms creative of studio and about performing, movie our how in television, quality our talked terms bear I side, the IP. we've our IP about of -- that of the great has bottom both enough have but to lot brought in television the been And and creatively. the On the known say a also can't line, quality of businesses improvements

talented Emmy of on side, get don't really creative talented accident. people. XXX You working a nominations management work the Meaning people. with a of by lot lot of the great, That's

grows And a mix. blended it's over really it's see platform together I one as streaming a ultimately So you'll balance, think that it's our time.

news previously cash that. to guided have billion. free the if on a don't change there had And any But changed material obviously, Robert, on on $X flow, were have guide. we would we it, We

with question from And comes our next Steven Fargo. Wells Cahall

comfortable efforts helpful. was update wondering big Would your DTC around at So context price get Hugh, would any to about the margins margins thinking. talked you've point, you're this the that's love could I but sharing double-digit if if coming. some something double-digit timing with and us increases be on you paid to getting with just

And then just parks. on

in in I 'XX, think cruise cruise in the Adventure about we got And quarter? you the but think the still costs As preopening do those implied think like? Treasure, preopening costs you'll and you've look Destiny. fourth what's about what fiscal there, the as sail ship

a heavier that component. would to I dock Singapore the is love think cost, so little on understand just

on talk And a terms churn. haven't has to we're them. of the frankly, quite journey both with well Bundling The on impact to had getting double-digit positive Happy actually changed. levers Sure. about margins. in doing

to to the is driving of that growth. roll starting with helps So growth, Password which helpful drivers. out. of also from sharing just terms That's be in obviously, is going that perspective, one us

value at we're providing pricing We've all We feel we've that's the Bob all the that like still announced look scale that as of consumers good feel that earned And the our entire their marketplace, we With all structure keep that. about to with obviously, we and productivity. and consumers churn we're come. and creative reduce going mentioned product earlier benefits. and positively to do options. drive with should will come evaluating that pricing, in also the The feel to with us improvements to they're cost continue the and creative then

said that a timing, money are that. were We then great to get still money. our we've do no ton not ago, on something losing about. terms all intend the to we've that going we now to It's surpass update of In that we're continue a making progress. to urgency. is And that. and well and on more approaching that long journey ultimately double-digit We $X Obviously, think expectation I we've margins to talked we're making of with made quarter billion

in terms Regarding of number will a little number The year. the a the shared We've costs in double for over ships. be startup this that XXXX. cruise

you to can pay ships be the back that that. cruise So about quickly. said, tend very that, That assume will

So investments. those we feel positive certainly about

next with question our JPMorgan. Karnovsky David And comes from

could Bob, Is for you if this of marketing a terms wanted see on can sports, priority? I on ESPN. update partner On or for you you're looking strategic refresh And content? conversations if still what so, in to

for costs. references then the managing there's in multiple exact And Hugh, tightly commentary, to

left? I to you on could see this. if Where wanted How expand realizing much you opportunity sales now? are So is

or nothing it. about not, I be know And But believe of I for only is, a partner to quarters. opportunities sounded say number talked with over add. may thought thing I've like ESPN conversations we're particularly partnerships more The believe continue there still the content why the I've it. others, having last We to continued that's about can strategic we've on to broken and because side. it to record explore

big billion. And $X.X regarding to cost Look, our with world excess We opportunity view recall, to billion. Right. in was in $X.X do less. -- that raised costs, more there's always of estimate my original I companies, is

all to deliver to line and have. the back invest can business great So continue it we're to going in as the after go opportunities aggressively with to we the bottom both we

comes UBS. our question John with And from next today Hodulik

commentary Any XQ looking or softening I continue of you attendance details in launches expect in this the are Great. terms And do you're terms on trends business seeing out do for per to fall, it Venue then mean, or any the linear Maybe revenues secondly, the further to what for expect any cap just on turn parks. what expectations of expectations that 'XX? flat side. And guys. and first the you negative? the could in on you into soften potentially just and to

I'll take Yes, that.

In parks expectation you to I'm given already. caps. sure terms of attendance ready not lot versus business, peel per our to of it the I've kind I'm of a down

feeling consumer saw the consumer QX. to again, And what think, about we bit little in bit more. I is stress, internationally of with lower-income consistent fact we're is going we talked traveling high-income the a be the a that pretty

more I terms reflective fact going the going both line costs bottom of And of those of last in the got year this think year. just a you're we've top to then trends in out and will of some and line. continuation onetime coming that the see be

the strengthen. that Olympics. weeks in Not certainly expect a to over regard. challenge And Disneyland the a surprise, but Olympics obviously good the are see international I that felt to has some do and will something in is of couple the news booking look good Paris due happens.

feeling positively front. So that overall, on

Our next Guggenheim. Michael Morris comes at from question

to seeing about the quarter in bundling of of bit of mix a subscriber there? how you ask mix to you It cited shift CTV in shift. Or on can you're you a what if the it And slip the wanted in tier? ARPU terms that, shift? Disney+. bit so, is performing function I the environment, little ad-supported impact you're Are talk a and at mix saying you domestic did that's little

bit think We about And just hear within parks a segment. the it demand moderation generally being one as surprising follow-up so booked was of on well little advance, the pretty Experiences vacations in quarter. to

feel So bookings little you with bit quarters And quarter, can versus you like us if help vary less maybe you visibility there's does advanced it have? in others. a much certain by how if

well. pretty happy you standpoint, people a a the both certainly to a points to profitability answer has on small effect Number To ad-free the in hit question And the Yes. the effect. ARPU, the shift or that, ad addition has correctly. small one, choose then bundling model as whether From model model. ad we're with

and we all things I'm visibility, is very good do Regarding the have which visibility, daily like at changes why emphasizing bookers and these visitors really that. margins, late are

projections forward, very I'm you. of why which we're Looking in got the I've the have that good we is good level expecting, into book that with confidence a sharing visibility

today question Bank. Kraft from next Our comes Deutsche Bryan at

I had two could. I if

advertising. on first Just

toward upfront of Are in the highlighted sales this trend third mentioned timing and light. you then licensing Is more that of of box to of TV with a given anything this there becoming a You Content and immediately real-time the business? And strong the Is seeing course. business. of or Other ad wanted quarter, from sales of read this? seeing But the it's recently press a as just in in the content increasing increased the beginning The part more it of very year, Or the some on parties? performance Sales/Licensing a sales content advertising is to have results licensing one-off? today BOI to driver which into office, demand content what to benefit terms more the along release the that encouraging. you're come I part macro advertisers of Are just pressures ask cautious?

is We X% overall Ad up healthy actually XX%. streaming market saw it. ESPN actually grow the now. advertising very about XX%. right talk to for was Happy up quarter. Sure. DTC was

So very, positively certainly very feeling regard. in that

regard. fact for we attractive softer the streaming have really categories, very our that well is of doing doing and and of we of little well. services is very ad that have. consumer a Auto the terms in the In well, IP that really, the well, doing live product service bit strong us. of that doing healthy sports And It's is that lot an products the market services, in and technology a a is fact financial overall, terms very But consumer so audience.

us have effectively that audiences new target sell rather streaming also allows basically our selling effectively. We more Disney which a seeking. that they're very platforms audiences to channels, selling enables to capability advertisers called across than just the We're streaming

a seeing we're from perspective, good So payback. technology

much are so second The numbers box the we've that at around was fact a the see the reality Yes, piece had office. success around licensing. licensing you that mostly

things So that's else. more driving what's than anything really

No that big The nonstrategic. company, IP to tactically, has IP which We'll been we us. strategy, that the to but continue big monetizing it. not strategy things are don't consider we is license. it's licensing things our The producing own are change our pretty in license and clear. a There for strategy core

more Operator, we one for question. time have

Our with Kannan next comes from Barclays. question Venkateshwar

I some growth over parks, do if And cruise over just you -- if to mean, X of in theme broadly back on guess, that X of CapEx can you're that about that seeing next expect would the in maybe and be next or terms what few ships elements, you're parks, there's offset talk step other of you extent what years? the investments the Maybe the can maybe that offset years a useful. I weakness So could kind impact making growth park. in and few the

numbers of that's year other is And loss-making one segment then And business. India. which out goes been next a probably your

would that be to once talk much is potential about appreciated. can extent you the contribution deconsolidated, the India So earnings

business, time. a very good about. It's investments that into One, making Kannan, great-returning been business the two we obviously, long very, a for Experiences we're feel things. the

guidance didn't you out long-term terms of making accelerate true businesses. in to I'm growth of those the investments well. segment to a not ships an the of of we as business, while wouldn't be way we cruise here So accelerated that in expect capital if that's And give

this Now on the investments keep in time that lead multiple are years. in mind business

term that But hence all exactly looking investing we growth, we'll when we're obviously, you of to because we're manifests, with the So accelerate and along. as share go turbocharge.

question, when the Regarding share deal. that India we'll we close the

it time for very, that that's lay we'll it the so effectively. to model you right do out think very it. very I can you all And clearly

Thanks you. today. for for And Thank joining Okay. everyone the thank want I to us questions.

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want the thank wish and us, We everyone you joining of to good for rest day. a