Disney pleased both Wall Street and TikTok fans as it reported its first full quarter under CEO Josh D’Amaro.
Shares rose over 3% in early trading after the Mouse House posted strong earnings for the quarter that ended June 27.
Adjusted diluted earnings per share were up 28% year-over-year to $2.06, higher than analysts’ estimate of $1.86 per share. Streaming operating income more than doubled to $712 million this quarter, while operating income in Experiences rose 20% to over $3 billion.
Revenue increased 7% year-over-year to $25.25 billion, which was just below the estimate of $25.39 billion from analysts polled by Bloomberg.
Disney also announced a TikTok deal that will bring more short-form vertical video to Disney+ in the coming months. This deal will put user-generated content on Disney+ for the first time, with curated content from creators who can use snippets from hundreds of its movies and shows. (The Mouse House had reached a deal with OpenAI to add short AI-generated videos to its platform in December, before OpenAI ended the deal in March.)
Disney+ is becoming the “digital centerpiece” of the company and will, next year, begin to transform into a “comprehensive membership ecosystem” that the company hopes will deepen fan engagement and retention, D’Amaro and CFO Hugh Johnston said in their shareholder letter.
Disney is integrating Hulu’s content and features, including live TV, into its flagship streamer by the end of the year, D’Amaro said on the earnings call.
Disney+ could eventually become home to other streaming services, D’Amaro said, adding that the platform is “very well positioned for aggregation” and could lean further into third-party bundles to boost engagement and reduce cancellations.
Disney is also moving much of its Consumer Products business from the Experiences segment to Entertainment later this year.
“We believe this shift will have strategic and operational benefits by bringing the monetization of our IP through consumer products closer to the studios that create that IP,” D’Amaro and Johnston said in the shareholder letter.
The sports division, headlined by ESPN, was Disney’s weakest in the quarter, with 4% revenue growth and a 17% decline in operating income. Disney laid off some ESPN staffers last month after completing its acquisition of the NFL Network.
Heading into the earnings report, Disney’s stock had fallen 13.7% in 2026 and 17% in the last 12 months.
D’Amaro previously unveiled the three pillars of his long-term strategy: investing in IP and creativity, better connecting with consumers, and leaning into “advanced technologies,” including AI.
“We see emerging technologies as a significant opportunity for our company to drive returns, one that builds on our legacy of innovating at the intersection of creativity and breakthrough technology,” D’Amaro and Johnston wrote in their letter.
Disney has given employees AI tools like Claude and Cursor, and they’ll soon have access to OpenAI’s Codex, Business Insider reported last week. The shareholder letter said that the company had also given staffers in its Imagineering design division access to the J.A.R.V.I.S. AI tool, which Business Insider reported on in December.
