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Analysis

Disney Just Beat Earnings. Streaming Is Finally Making Real Money. Here's the Full Picture.

Josh D'Amaro's First Earnings Report Just Landed. It Was a Good One. Less than two months into his tenure as CEO, Josh D'Amaro delivered Disney's strongest streaming quarter ever alongside record theme park revenue — a clean beat across every major metric in one of the most…

Market Munchies·May 7, 2026·6 min read
May 7 news1

Josh D'Amaro's First Earnings Report Just Landed. It Was a Good One.

 

Less than two months into his tenure as CEO, Josh D'Amaro delivered Disney's strongest streaming quarter ever alongside record theme park revenue — a clean beat across every major metric in one of the most closely watched earnings reports of the season. Wall Street wanted to know whether Disney's turnaround was real or Iger's last hurrah. Wednesday's numbers suggest it is real. Shares rose 7%. Here's everything you need to know.

📊 The Scorecard

  Eight numbers. All of them good.

  • Revenue: $25.17B, up 7% — beat the $24.87B estimate
  • Adjusted EPS: $1.57, up 8% — beat the $1.50 estimate
  • Streaming operating income: $582M — beat Disney's own $500M guidance
  • Streaming operating margin: 10.6% — first time ever above 10%
  • Experiences revenue: $9.49B — Q2 record
  • Q3 operating income guidance: $5.3B — up 16% year over year
  • Full-year EPS growth: ~12% — maintained
  • Share buybacks authorized: $8B+ — raised

Clean across the board.

🎬 The Streaming Story

  Disney+ and Hulu revenue rose 13% to $5.49 billion. Operating income jumped 88% to $582 million. The streaming business crossed 10% operating margin for the first time ever. The honest caveat: those gains were primarily driven by price hikes implemented in fall 2025, not raw subscriber growth. Higher prices on a stable subscriber base produces better margins automatically. The real test is whether those subscribers stay when the next price increase lands. The reason for cautious optimism: Disney says it remains on track to hit at least 10% streaming margin for the full fiscal year. If that holds, the transformation from streaming-as-expense to streaming-as-profit-center is complete. That is the most important structural shift in Disney's business in a decade.

The early-stage bet to watch: Verts — Disney's vertical short-form video format on Disney+, launched in March — is showing high engagement rates with Gen Alpha, with Disney citing strong session completion metrics as early evidence that the format is retaining younger viewers rather than losing them to TikTok. It is not a revenue line yet. It is a product bet on whether Disney can keep younger viewers on its platform. Too early to assess at scale, but the early signals are encouraging enough that D'Amaro mentioned it unprompted on the call.

🎡 The Parks Picture

  What happened: Revenue up 7% to $9.49 billion, a Q2 record. Operating income up 5% to $2.62 billion. Domestic attendance down 1%. Why the attendance dip is not alarming: Disney is charging more per visitor and visitors are spending more once inside. Operating income rising 5% despite a 1% attendance decline means the revenue-per-visitor strategy is working. Why the attendance dip has a specific cause: The Iran war has suppressed international travel to the U.S. broadly. Fewer foreign visitors to domestic Disney parks is the same headwind hitting World Cup hotel bookings across the country. Disney expects year-over-year attendance to improve in Q3 — that improvement is, at least in part, a bet on the peace deal that sent oil down 7% yesterday.

The new ships: The Disney Adventure and Disney Destiny launches drove meaningful cruise revenue growth, helping the overall experiences segment hit record Q2 figures. Cruises are a deliberate hedge against domestic park attendance cycles — and a geographic one too. The Disney Adventure is homeported in Singapore, specifically positioning Disney to capture Asian and international demand that bypasses the U.S. travel slump entirely. When domestic park attendance softens due to fewer international visitors flying into the U.S., the Singapore-based ship captures some of those same travelers closer to home.

👔 What D'Amaro Actually Owns

 

Here is the honest version of the CEO transition story. Every metric in this quarter was set in motion before D'Amaro took the chair from Bob Iger on March 18. The streaming price hikes, the park investment cycle, the new cruise ships — all Iger decisions. D'Amaro delivered the results, but he did not design the quarter. What he does own: the forward guidance, the $8 billion buyback commitment, and the company's AI content strategy going forward. Disney recently concluded its partnership with OpenAI — a move analysts are reading less as a failure of any specific technology and more as a deliberate pivot toward building proprietary AI tools in-house, giving Disney tighter control over how its IP is used in AI-generated content. D'Amaro has not yet laid out that in-house strategy publicly. That is the next thing to watch.

🥊 The Competitive Reality Check

 

The WBD/Paramount merger is real competition. But the "Disney-killer" framing deserves pushback. The combined HBO-CBS-Paramount entity enters the streaming market with extraordinary IP depth — Game of Thrones, Mission Impossible, Star Trek, SpongeBob, CBS procedurals — and genuine brand cachet in HBO. That is the strongest competitive threat Disney has faced in streaming since Netflix. At the same time: the merged entity carries a debt load of $54 billion in new acquisition financing on top of WBD's existing obligations. Disney is running a 10.6% streaming margin. The new competitor is running negative cash flow on its streaming business while servicing an enormous debt stack. Scale without margin is not automatically a winning position. D'Amaro needs a clear competitive response before year-end. He does not need to panic about it today.

💼 Three Things to Watch

 

  1. Streaming margin sustainability. Can Disney hold 10%+ without another price hike? The answer will come in Q3.
  2. Q3 park attendance. Disney said it will improve. That depends partly on whether the Iran peace deal closes and international travel recovers. Watch the oil price as a leading indicator.
  3. The AI strategy reveal. D'Amaro needs to explain how Disney plans to use AI in content creation without OpenAI. That answer will shape how the market views Disney's long-term content cost structure.

Sources

 

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