Mumbai: We all grew up enchanted by the gleaming white castle, its spires stretching toward the heavens, a symbol of dreams brought to life. Since its debut in 1985, that castle, now softly lit by a setting sun with just the word ‘Disney' below, has stood as a beacon of imagination and innovation. Today, much like the castle, The Walt Disney Company stands resilient, weathering decades of change and continuing to captivate hearts worldwide.
Closing fiscal 2024 on a high note, Disney showcased a masterclass in adaptation and growth amidst shifting tides in the entertainment industry. With Q4 revenue soaring 6 per cent to $22.6 billion and full-year revenue climbing 3 per cent to $91.4 billion, Disney reaffirmed its status as a powerhouse, delivering not just profits but enduring magic for fans and shareholders alike. Diluted earnings per share (EPS) rose dramatically, with Q4 showing a 79 per cent increase to $0.25, and full-year EPS more than doubling to $2.72, reflecting improved operational efficiency.
Despite a 6 per cent dip in pre-tax income to $0.9 billion for Q4, full-year figures paint a brighter picture with an impressive 59 per cent jump to $7.6 billion compared to FY23. The company delivered $8.6 billion in free cash flow, marking an impressive 75 per cent year-over-year increase, driven by lower production costs and higher operating income. Share buybacks of $3 billion and dividends tracking earnings growth highlight Disney’s commitment to shareholder value.
Disney’s Entertainment segment witnessed stellar growth, with operating income soaring past $1.1 billion, reflecting a staggering >100 per cent year-over-year improvement. This resurgence was bolstered by a 14 per cent increase in revenue to $10.8 billion, driven by box office hits such as Pixar's “Inside Out 2" and Marvel's “Deadpool & Wolverine”, collectively amassing $316 million in operating income.
Direct-to-Consumer (DTC) profitability marked a significant milestone, transitioning from a $420 million loss in Q4 FY23 to a $253 million profit in Q4 FY24. Disney+ Core subscriptions grew by 4.4 million, reaching 120 million paid subscribers, while Hulu gained an additional 2 per cent to 52 million subscribers.
While the Sports segment saw a minor 5 per cent decline in operating income to $929 million, domestic ESPN advertising revenue increased by 7 per cent, showcasing continued strength in live sports. However, rising costs, particularly in college football rights, weighed on overall profitability.
The Parks and Experiences segment achieved record annual revenues of $34.2 billion, driven by higher guest spending and innovative offerings like the Disney Cruise Line. Nonetheless, Q4 revenue growth was modest at 1 per cent, with international parks reporting a 6 per cent decline in operating income, attributed to lower attendance and higher operating costs.
Disney invested $5.4 billion in capital expenditures, reflecting its focus on long-term growth via fleet expansions and next-generation attractions. CEO Robert A. Iger expressed optimism, emphasising Disney’s strategy to leverage its vast entertainment assets to deliver exceptional returns and sustained innovation.
Looking ahead, Disney projects high single-digit EPS growth in FY25, targeting $15 billion in operating cash flow and $3 billion in stock repurchases. Entertainment DTC operating income is forecasted to grow by $875 million, signalling robust momentum in the streaming space.
As Disney emerges from a challenging yet transformative phase, the FY24 results underscore its ability to adapt, innovate, and grow amidst industry headwinds. With a diverse portfolio spanning streaming, sports, and experiential entertainment, Disney’s fiscal trajectory remains a compelling narrative of resilience and ambition.
