Disney’s price hikes pay off

It appears a price hike is just what Doc McStuffins ordered to give Disney a nice financial boost.

The Mouse House—which also just announced a successor to longtime CEO Bob Iger—reported a 5% year over year increase in revenue to $26 billion last quarter, but a 9% decline in operating income to $4.6 billion.

However, Disney reported that income from its Disney+ and Hulu streaming services increased 72% YoY to $450 million. This was “well above Wall Street analysts’ estimates and the company’s guidance,” according to the Wall Street Journal. Revenue from streaming-service subscription fees increased 13% over 2024, and revenue from streaming advertising and other sources increased 4%.

During a Monday earnings call, Disney CFO Hugh Johnston credited streaming revenue gains to price increases, domestic and international subscriber growth, and bundle promotions including one for Disney+, Hulu, and HBO Max (which is owned by Warner Bros., and possibly Netflix soon). Disney has raised prices for one or both of its streaming services each year for the last five years, and most recently increased prices for both in October, Business Insider reported.

For the company’s fiscal first quarter, which ended Dec. 27, Disney also reported a 6% YoY increase in revenue for its experiences segment to $10 billion, and a 6% increase in operating income to $3.3 billion. Similar to its streaming business, Disney has raised prices at its parks for four consecutive years, according to Business Insider.

“Overall, the company really has a lot of momentum right now, and that is what I think is most encouraging about the quarter,” Johnston told CNBC on Monday.

Disney is investing billions of dollars into its experiences segment, which includes theme parks, resorts, and cruise lines. Capital expenditures totaled about $3 billion last quarter, up from $2.5 billion in 2024, “due to higher spending on cruise ship fleet expansion and, to a lesser extent, new theme park attractions,” according to an earnings release.

On the earnings call, Iger said the company has “expansion projects underway at every one of our theme parks.” It recently launched its newest cruise ship, the Disney Destiny, and plans to launch another, the Disney Adventure, next month, Iger added.

Movies or parks? When an analyst asked whether a specific business segment may be the dominant moneymaker in the future, Iger said there will be “healthy competition” between both its entertainment (i.e., streaming and moviemaking) and experience businesses. However, “both have the ability to grow nicely into the future, given all the investments that we’ve made and the trajectory that we’re on.”

Time to “let it go.” Disney’s board of directors has selected Josh D’Amaro, its current experiences chair, to serve as the next chief executive. He’ll take over March 18, at the company’s scheduled annual meeting, according to a news release.

“There is no limit to what Disney can achieve,” D’Amaro, a 28-year company veteran, said in a statement.

He’s taking the reins from Iger, who was first appointed as CEO in 2005. Iger stepped down as CEO in 2020, only to return in November 2022 amid stiff criticism over how the new CEO was managing the company.