Disney's Entertainment direct-to-consumer (DTC) business has announced a strong fiscal quarter, with Q4 operating income soaring by 39% year-on-year. Full-year streaming profit reached $1.3 billion, significantly exceeding the previous year's figures by $1.2 billion, and surpassing the company's initial guidance by $300 million. In contrast, just three years prior, Disney's DTC operations reported a $4 billion operating loss.
Total Disney+ and Hulu subscriptions reached 195.7 million at the close of Q4, marking an increase of 12.4 million from the previous quarter, largely attributed to wholesale growth at Hulu. Disney+ concluded the period with 131.6 million subscribers, a rise of 3.8 million quarter on quarter, with gains observed in both domestic and international markets. Quarterly DTC revenue experienced an 8% year-on-year growth, despite a two-percentage-point impact from the removal of India’s Disney+ Hotstar from the comparable base.
Operating income jumped 39% to $352 million, driven by increased subscription revenue from ARPU and subscriber growth, partially offset by increased spending on programming, marketing, technology, and distribution. For fiscal 2025, DTC operating income of $1.3 billion was fueled by improved results at both Disney+ and Hulu. Disney is now focusing on streaming as a key growth driver and is moving towards a unified app strategy.
Internationally, Hulu is now the general entertainment brand within Disney+, superseding the Star tile. Domestically, the company is working to consolidate its entertainment output into a single app, designed to simplify the user experience and better showcase its bundles. The company is also implementing navigation and discovery enhancements, more personalized recommendations, and an expanded perks program for Disney+ subscribers, along with targeted investments in local originals and licensed content in key markets.
Looking ahead, Disney expects continued growth in its streaming business in fiscal 2026 and is targeting a 10% operating margin for its Entertainment DTC SVOD operation. Management anticipates Entertainment DTC SVOD operating income of approximately $375 million in Q1, as it continues to expand Disney+ and Hulu and prepares for a broader integrated app experience. According to Disney, “Disney’s DTC operations were posting a $4 billion operating loss.”