Results at a glance
- Period
- FY2026Q3
- Revenue
- $25.2B (25,248 MUSD)
- Net income
- $2.6B (2,638 MUSD)
- Net margin
- 10.4%
From the Disney Open LedgerView the live ledger
Disney reported $25.2 billion of third-quarter revenue (+7%) and $2.64 billion of net income attributable to Disney, with total segment operating income up 21% to $5.6 billion. Experiences revenue rose 10% to $9.97 billion and Experiences operating income jumped 20%. Entertainment SVOD subscription revenue grew 15%. This is the first full quarter under the new CEO that shows which segment funds which: parks and cruises still print the cash, streaming is turning on price and subscribers, and Sports is the margin absorber.
The Headline Numbers
Quarter ended June 27, 2026 versus June 28, 2025 ($ in millions except EPS):
| Metric | Q3 FY2026 | Q3 FY2025 | YoY |
|---|---|---|---|
| Revenue | $25,248M | $23,650M | +7% |
| Income before income taxes | $3,645 | $3,211 | +14% |
| Total segment operating income | $5,555 | $4,575 | +21% |
| Net income attributable to Disney | $2,638 | $5,262 | −50% |
| Diluted EPS | $1.51 | $2.92 | −48% |
| Adjusted EPS | $2.06 | $1.61 | +28% |
| Free cash flow | $3,072 | — | +63% |
GAAP net income and EPS fell hard because the year-ago quarter included a large non-cash tax benefit from Hulu's U.S. tax classification change. Adjusted EPS +28% and segment operating income +21% are the operating read. Management reiterated fiscal 2026 adjusted EPS growth of about 12% excluding the 53rd week (about 16% including it), guided Q4 segment operating income to about $4.9 billion including the 53rd week, and raised the share-repurchase target to at least $9 billion for fiscal 2026.
Revenue Deep Dive: Entertainment, Sports, Experiences
Segment revenue and operating income for the quarter:
| Segment | Revenue | YoY | Operating income | YoY |
|---|---|---|---|---|
| Entertainment | $11,345 | +6% | $1,680 | +64% |
| Sports | $4,500 | +4% | $858 | −17% |
| Experiences | $9,968 | +10% | $3,017 | +20% |
| Total segment OI | — | — | $5,555 | +21% |
Experiences is the engine. Revenue +10% to $9.97 billion on roughly 6% volume and 3% rate across the global portfolio. Domestic parks and experiences revenue grew 11%, including Disney Cruise Line expansion. Global guests +4%, domestic park attendance +3%, domestic per capita spending +4%. Segment operating income +20%, of which about four points came from an approximately $100 million tariff refund. Management's own words: "Total Parks & Experiences revenue increased 10%, driven by roughly 6% volume and 3% rate across the global portfolio." That is robust demand language tied to both attendance and pricing — and the ledger's PP&E climb to $44.7 billion is the balance-sheet mirror of that investment thesis.
Entertainment is the operating-leverage story. Segment revenue +6%; operating income +64% to $1.68 billion. Entertainment SVOD revenue +11%, with subscription revenue +15% and advertising +3%. SVOD operating margin hit 13% in the quarter. Subscription and affiliate fees for the Entertainment segment rose 12%. Toy Story 5's theatrical and consumer-products success is the product-ramp quote in the shareholder letter. Streaming is no longer only a subscriber-count story — price and mix are visible in the SVOD margin.
Sports grew the top line and compressed the bottom line. Revenue +4% to $4.5 billion; operating income −17% to $858 million. NBA and NHL postseason costs are the mechanical explanation. Sports subscription and affiliate fees still rose 8%. The segment funds brand and engagement; Experiences and Entertainment fund the profit bridge this quarter.
Management signal scan: robust demand and market expansion show up in Experiences guest growth and domestic per caps; new product / IP ramps show up in Toy Story 5 and SVOD product enhancements; selling prices show up as the 3% rate component in Experiences and SVOD subscription growth outrunning volume. The letter does not say demand exceeds supply or that capacity is sold out — parks are growing guests and spend together, which is a healthier shape than a rationing narrative.
The Margin Story
Consolidated costs and expenses were $20.5 billion versus $20.0 billion. Restructuring and impairment charges jumped to $900 million from $185 million — including the A+E investment impairment that also weighed on GAAP EPS. Interest expense, net improved to $298 million from $324 million.
Segment mix is the margin story that matters. Experiences operating margin for the nine-month period is about 30%. Entertainment SVOD margin of 13% in Q3 is the streaming proof point management has been promising. Sports' −17% operating-income decline is the offset. On an adjusted basis, the company is delivering mid-teens EPS growth guidance; on a GAAP basis, impairments and tax comps still dominate the headlines.
The One Big Question: Which Segment Funds the Story?
A $9.97 billion Experiences quarter that grows operating income 20% can carry a lot of narrative. The strategic question is whether Entertainment's SVOD margin stays in double digits when marketing and programming timing normalize, and whether Sports' cost spikes remain seasonal rather than structural. Management is already rearranging the org chart: Consumer Products moves from Experiences toward Entertainment in FY2027 Q1 so content creators capture more of the merchandise economics. That is an internal transfer of the profit pool, not a new customer.
Capital return is no longer tentative. At least $9 billion of buybacks in fiscal 2026, with treasury stock on the Q3 balance sheet at $14.8 billion, is the cash-flow statement made visible in equity.
Tracking a $25B Quarter in Plain Text
Parks, streaming, and linear sports share one chart of accounts so a reader can see the consolidated truth. We follow how we model every company. Film and TV content costs sit in Assets:NonCurrent:Other with a reconciling comment — no invented core account names. Income is credited (negative); expenses are debited (positive).
; FY2026Q3 Income Statement — quarter ended June 27, 2026
; Check: −25248 + 16520 + 0 + 3968 + 1321 + 801 + 2638 = 0 ✓
2026-06-27 * "The Walt Disney Company" "FY2026Q3 Income Statement"
Income:Revenue -25248 MUSD
Expenses:CostOfRevenue 16520 MUSD
Expenses:ResearchAndDevelopment 0 MUSD
Expenses:SellingGeneralAdministrative 3968 MUSD
Expenses:OtherNet 1321 MUSD
Expenses:IncomeTax 801 MUSD
Equity:Adjustments 2638 MUSD ; net income attributable to DisneyExpenses:CostOfRevenue here is costs and expenses minus SG&A — programming, depreciation, and product costs in one bucket. Expenses:OtherNet absorbs restructuring/impairment, interest, and equity income so the transaction still zeros to attributable net income of $2,638 million. PP&E at $44,744 million (up from $41,255 million at FY2025 year-end) is the Experiences capex story on the balance sheet.
The Multi-Year Arc
| Metric | FY2022 | FY2023 | FY2024 | FY2025 | Q3 FY2026 |
|---|---|---|---|---|---|
| Revenue ($M) | 82,722 | 88,898 | 91,361 | 94,425 | 25,248 |
| Net income to Disney ($M) | 3,145 | 2,354 | 4,972 | 12,404 | 2,638 |
| Total assets ($M) | 203,631 | 205,579 | 196,219 | 197,514 | 204,740 |
| PP&E ($M) | 33,596 | 34,941 | 37,041 | 41,255 | 44,744 |
| Disney equity ($M) | 95,008 | 99,277 | 100,696 | 109,869 | 110,032 |
Annual revenue compounded steadily while FY2025 net income spiked on tax items. The Q3 FY2026 balance sheet shows assets back above $200 billion, PP&E still climbing, and equity stable near $110 billion after heavy buybacks — a company investing in parks and returning cash at the same time.
The Verdict: Bull vs. Bear
Bull Case
- Experiences revenue +10% to $9.97B and operating income +20% — volume and rate both positive.
- Entertainment operating income +64%; SVOD subscription revenue +15% and SVOD margin 13%.
- Adjusted EPS +28% to $2.06 with full-year adjusted EPS growth guide intact.
- Free cash flow +63% to $3.1B; buyback target raised to ≥$9B.
- PP&E at $44.7B continues the multi-year parks-and-cruise investment that is already showing guest and per-capita growth.
Bear Case
- GAAP EPS $1.51 versus $2.92 — impairments and tax comps still dominate headline earnings.
- Sports operating income −17% on postseason costs; the segment is not self-funding growth this quarter.
- Restructuring and impairment charges of $900M (including A+E) are not a clean operating print.
- SVOD margin benefited from timing of marketing and programming spend — sustainability is unproven.
- The letter's demand language is strong on Experiences but does not claim industry-wide scarcity or pricing power everywhere.
Our Take: Q3 is the quarter the segment ledger was built for. Experiences is funding the narrative and a large share of segment profit; Entertainment is finally showing SVOD operating leverage; Sports is a cost center with strategic value. Adjusted earnings and cash flow support the raised buyback. Until GAAP stops needing large bridges for impairments and tax comps, value the operating segments — and keep reading the Experiences line first.
