Disney+ kept its momentum fully charged as the streamer easily topped Wall Street growth forecasts for the March 2022 quarter.
Disney’s flagship streamer gained 7.9 million customers in the first three months of 2022, to stand at 137.7 million, up 33% year over year. Analysts on average expected Disney+ to net 5.2 million new subscribers, per FactSet.
The results come after rival Netflix reported a loss of 200,000 streaming subscribers for the same period and forecast a 2 million drop for Q2, leading investors to fear a sector-wide slowdown after a pandemic-fueled surge over the last two years. Disney+’s strong gains dispell that notion and suggest that the Mouse House is stealing market share from Netflix.
Overall, Disney beat on the top line but missed on the bottom. The company reported revenue of $19.25 billion (up 23%) and earnings of 26 cents per share. Wall Street on average expected Disney to post revenue of $18.91 billion and earnings per share of $1.07 for the quarter, which is Disney’s Q2 of fiscal year 2022, per Refinitiv data.
Disney’s revenue for the quarter took a $1 billion hit, which it said was “for the amount due to a customer to early-terminate license agreements for film and television content” delivered in previous years so that it could use the content “primarily on our direct-to-consumer services.” That could be a reference to Disney’s former licensing deal with Netflix.
Shares of Disney were up over 4% in after-hours trading Wednesday. Amid the broader ongoing slump in U.S. financial markets. Disney stock closed down 2.3% in regular trading, to $105.25 per share — a new two-year low.
The quarterly results “once again proved that we are in a league of our own,” Disney chief Bob Chapek said in prepared remarks.
Disney’s Parks, Experiences and Products segment beat analyst expectations on the top and bottom lines, primarily on the strength of the company’s domestic parks business.
Looking forward, Disney+ is set for a big international expansion this summer, coming to 42 additional countries and 11 territories across Europe, West Asia and Africa. The latest phase of the streamer’s rollout will begin May 18 in South Africa.
In another bid to spur streaming growth, the media conglomerate plans to launch a cheaper, advertising-supported version of Disney+, initially in the U.S. in late 2022. Netflix is eyeing Q4 for the rollout of an ad-supported tier.
Disney also is banking on buzzy titles coming to Disney+ to draw in new subs and retain existing ones, like “Obi-Wan Kenobi” starring Ewan McGregor (May 27) and Marvel’s “Doctor Strange in the Multiverse of Madness,” expected to come to the streaming service sometime in July. As theatergoers returned to the multiplex, “Doctor Strange 2” raked in an impressive $185 million domestically over its opening weekend (May 6-8).
(Pictured above: Disney+ original series “Moon Knight” starring Oscar Isaac)