Disney+ and Hulu advertising revenue reached record levels in Q1 fiscal 2026, signaling accelerated monetization of the entertainment giant's 122 million ad-supported streaming subscribers.
Walt Disney Company today reported its first quarter fiscal 2026 results, revealing that the entertainment conglomerate's streaming services generated more than $5 billion in revenue during the quarter ended December 27, 2025. The performance demonstrates sustained momentum in Disney's transformation of its direct-to-consumer platforms into profitable advertising-supported businesses, with Entertainment SVOD operating income climbing 72% year-over-year to $450 million.
The streaming advertising gains come as programmatic buyers increasingly demand AI optimization and connected television budgets surge across the industry. Disney's platforms benefited from structural advantages including high-quality content environments, sophisticated audience targeting capabilities through Disney Compass data infrastructure, and expanding programmatic access through partnerships with major demand-side platforms.
Revenue growth across Disney's Entertainment SVOD services - comprising Disney+, Hulu subscription video-on-demand, and Disney+ Hotstar (through November 14, 2024) - reached 11% compared to the prior-year quarter, according to the company's executive commentary released February 2, 2026. The increase reflects both subscription revenue expansion and advertising revenue growth, partially offset by the adverse 1 percentage point impact from the inclusion of Star India revenue in the prior year.
Disney+ and Hulu captured seven of the top 10 most-watched shows of 2025 as reported by Nielsen, with Bluey maintaining its position as the most-streamed show in the United States for the second consecutive year with 45 billion minutes watched. The content performance demonstrates the platform's ability to retain audience engagement while monetizing through both subscription and advertising revenue streams.
The streaming services' financial performance coincided with Disney's deployment of new advertising technology capabilities designed to improve advertiser engagement. Chief Executive Officer Bob Iger and Chief Financial Officer Hugh Johnston highlighted ongoing experimentation with AI-powered planning tools and video generators during their prepared management remarks.
Disney's advertising infrastructure benefited from previous technology investments including the company's live advertising certification program announced in January 2025, which enabled real-time bidding capabilities for live streaming inventory through partnerships with Google Display & Video 360, The Trade Desk, Yahoo DSP, and Magnite. The certification program addressed fundamental limitations in traditional advertising technology for live content by pre-ingesting approved creative content to eliminate delivery delays during crucial viewing moments.
The company's refreshed Disney+ homepage, which launched in fall 2025, features streamlined navigation, a dedicated "For You" section, and modernized design intended to increase user engagement and advertising inventory value. Additional product enhancements include improvements to recommendation engines and personalization capabilities through artificial intelligence deployment.
Disney recently announced plans to introduce a curated slate of Sora-generated content on Disney+ following a licensing agreement with OpenAI. The integration represents an expansion of how the platform delivers content while creating additional advertising opportunities within AI-powered experiences. Platform executives indicated that ongoing experimentation remains central to innovation efforts, with new vertical and shortform experiences under development.
Disney's advertising revenue growth occurred against a backdrop of expanded programmatic access to the company's streaming inventory. The entertainment giant integrated Disney's Real-Time Ad Exchange with Amazon DSP in June 2025, providing advertisers direct access to premium inventory across Disney+, ESPN, and Hulu platforms while leveraging insights from both companies through clean room technology collaboration.
The Amazon DSP integration built upon Disney's March 2024 announcement connecting DRAX directly to Google's DV360 and The Trade Desk, significantly simplifying how advertisers access premium inventory across Disney's streaming platforms. These direct connections between Disney's ad exchange and major media buying platforms streamlined the ad buying process while delivering greater effectiveness for clients.
Disney also expanded biddable ad technology across streaming platforms in April 2025, making live content from Hulu and Disney+ available to advertisers through programmatic biddable integrations. The development enabled automated workflows to simplify access for buyers while allowing certified platforms to leverage spikes in viewership during pivotal live moments.
72% of marketers planned to increase programmatic advertising investment in 2025, with Connected TV's share of media budgets projected to double from 14% in 2023 to 28% in 2025, according to Proximic by Comscore research released in February 2025. Disney's expanded programmatic capabilities positioned the company to capture growing advertiser demand for premium streaming inventory with sophisticated targeting and measurement capabilities.
The company's Magnite partnership extension announced in October 2024 expanded into Latin American markets while adding live sports and podcast monetization capabilities. Magnite's programmatic advertising technology facilitates transactions for more than 30 demand-side platforms that Disney works with, enabling automated advertising delivery across Disney's entire content ecosystem.
Disney's international streaming growth represented a strategic priority during the quarter, with management highlighting encouraging results from investments in local content. Engagement benefited from standout local originals including The Manipulated in APAC and Hija del Fuego in LATAM, along with content agreements with free-to-air broadcasters to increase depth of local programming.
The company's Latin American advertising infrastructure launch in June 2024 introduced Disney's Audience Graph, Clean Room technology, and BridgeID capabilities outside the United States for the first time. The expansion included a partnership with Mercado Libre that integrated MELI and Mercado Ads directly with Disney's Real Time Ad Exchange, allowing advertisers to access brand-safe streaming inventory on Disney+ while reaching unified audiences across the platform.
Disney's approach to international markets combined local content investment with advertising technology deployment designed to enable precise targeting while prioritizing user privacy. The company recently secured three international Emmys in top categories for Rivals, Bluey, and Yo, Adicto, demonstrating the quality of its international content strategy.
Independent measurement capabilities expanded across European markets as AudienceProject activated Disney+ measurement across the UK, Germany, Nordic countries, and other territories in January 2026. The direct integration within AudienceProject's platform eliminated manual data transfer processes while providing cross-device measurement spanning mobile, tablet, and connected television platforms.
Entertainment SVOD operating margin reached 8.4% for the quarter, reflecting Disney's progress toward its fiscal 2026 target of 10% SVOD operating margin. Higher SVOD operating income was driven by subscription and advertising revenue growth, partially offset by increased programming, production, and marketing costs.
For the second quarter of fiscal 2026, Disney expects SVOD operating income of approximately $500 million, representing an increase of approximately $200 million compared to the prior-year quarter. The company maintains its guidance for 10% SVOD operating margin for fiscal 2026 as investments in content and technology drive subscription and advertising revenue growth.
Entertainment segment advertising revenue declined 6% in the first quarter, reflecting an adverse 11 percentage point impact from the inclusion of Star India advertising revenue in the prior-year quarter, lower political advertising compared to Q1 2025, and Fubo advertising revenue. The company completed its transaction to combine certain Hulu Live TV assets with FuboTV in October 2025, resulting in a 70% interest in the combined operations on a fully diluted basis.
Disney's streaming platforms competed in an expanding market where CTV revenue growth exceeded 50% year-over-year for programmatic advertising technology providers during 2025. PubMatic reported working with 26 of the top 30 global streaming companies in the second quarter of 2025, representing 87% coverage of leading streaming platforms.
ESPN demonstrated its leadership as the preeminent destination for sports with strong ratings throughout the first quarter. ESPN Networks delivered their most-watched college football regular season since 2011, with ABC achieving its best college football season since 2006. The College Football National Championship reached 30.1 million viewers, becoming the second most-viewed cable event ever.
Monday Night Football delivered its second-highest viewership in 20 years, with Disney's NFL Divisional game drawing 38 million viewers - the most-watched event in the company's history. Season-to-date through January 24, 2026, ESPN delivered its third most-watched NBA regular season.
Sports segment operating income declined $56 million compared to the prior-year quarter, as 10% growth in advertising revenue was offset by higher programming and production costs and decreased subscription and affiliate fees. The temporary suspension of YouTube TV carriage had an adverse impact to segment operating income of approximately $110 million.
Disney closed its transaction with the NFL to acquire NFL Network and other media assets on January 31, 2026, including linear rights to NFL RedZone channel. The acquisition bolsters ESPN's offering with additional content for football fans, with plans to add NFL Network to ESPN Unlimited prior to the next football season.
The launch of ESPN Unlimited marked an important step in Disney's direct-to-consumer evolution, with management expressing satisfaction with adoption and engagement patterns. ESPN app authentication from pay-TV subscribers, the pace of new signups, and engagement patterns exceeded internal expectations during the early implementation phase.
Bundling ESPN with Hulu and Disney+ creates what the company described as a one-of-a-kind streaming package combining sports, branded and general entertainment, and news offerings. The integrated approach leverages Disney's advertising technology stack to create sophisticated targeting capabilities, building upon previous partnerships with Amazon DSP that demonstrate the company's commitment to expanding programmatic access across premium streaming inventory.
Disney's advertising performance benefited from investments in data infrastructure designed to provide advertisers with sophisticated audience targeting capabilities. The company launched Disney Compass in January 2025, a unified data platform that integrates the company's Audience Graph and Clean Room capabilities into a centralized interface.
Disney Compass provides instant access to metrics through Always On Data features that track audience behavior and campaign performance in real-time. The platform's architecture incorporates ROI tracking mechanisms and engagement metrics, providing granular insights into campaign effectiveness across Disney's portfolio of properties.
Integration partners including Affinity Solutions, LiveRamp, Snowflake, and VideoAmp create an interconnected ecosystem for data activation and analysis. The centralization of data access addresses complexity traditionally associated with managing disparate systems while reducing technical overhead for cross-platform advertising campaigns.
The platform's privacy-forward approach reflects current industry standards for data protection and user privacy, addressing growing concerns about data security in digital advertising. Disney's objective-based data views system generates specialized reports aligned with specific brand campaign goals, indicating a customizable approach to data visualization and analysis.
Disney's streaming advertising growth occurred as traditional television advertising markets faced headwinds. German television advertising investments declined approximately 4% in 2025 according to Nielsen Media data, reflecting persistent weakness that ProSiebenSat.1 and other European broadcasters attributed to accelerated consumer migration toward streaming platforms.
Connected television advertising infrastructure continues maturing, with programmatic capabilities enabling precise targeting that traditional broadcast advertising cannot match. Industry projections indicated CTV's share of media budgets could double from 14% in 2023 to 28% in 2025, creating opportunities for platforms with sophisticated advertising technology and premium content.
Competitive dynamics intensified throughout 2024 and 2025 as major streaming platforms expanded programmatic capabilities. Netflix opened inventory to The Trade Desk, Google Display & Video 360, and Magnite, while Microsoft launched Premium Streaming campaigns targeting premium services. The competitive environment created opportunities for specialized providers and platforms with differentiated content offerings.
Disney's approach combines live sports content with general entertainment programming to provide advertisers access to diverse audience segments within single campaign structures. The NFL Network acquisition specifically addressed advertiser demands for live content inventory that traditionally commanded premium pricing through direct sales channels.
By incorporating NFL programming into ESPN's direct-to-consumer offering, Disney enables programmatic access to live sports advertising opportunities while maintaining premium positioning. The integration of Hulu into Disney+ creates unified app experiences featuring branded and general entertainment, news, and sports content that leverages advertising technology advances including real-time bidding capabilities for live streaming inventory.
Total company revenue increased 5% for the first quarter of fiscal 2026. Total segment operating income decreased 9% compared to the prior-year quarter, reflecting lower Entertainment results driven by film slate comparisons, partially offset by higher results at Experiences. Diluted earnings per share excluding certain items of $1.63 was 7% lower than the prior year.
Experiences delivered record quarterly revenue and operating income in the first quarter, with both increasing 6% compared to the prior-year quarter. The increase in segment operating income was driven by higher guest spending, an increase in passenger cruise days due to the Disney Treasure and Disney Destiny cruise ships, and 1% growth in attendance at domestic parks.
The company expects to deliver double-digit adjusted earnings per share growth for fiscal 2026, weighted to the second half of the year, along with $19 billion in cash provided by operations. During the quarter Disney repurchased $2 billion of stock and remains on track to repurchase $7 billion for the fiscal year.
For fiscal 2026, Disney continues to expect double-digit Entertainment segment operating income growth weighted to the second half of the year, driven by theatrical release slate and continued growth from SVOD services. Second quarter Entertainment segment operating income is expected to be roughly comparable to Q2 fiscal 2025.
The streaming services' trajectory toward profitability represents a fundamental shift in Disney's business model. The platforms combine dual revenue streams from subscription fees and advertising sales, providing multiple levers for monetization as the company invests in content, technology, and international expansion.
Disney's streaming advertising growth validates the viability of premium video advertising in programmatic environments. The company's performance demonstrates that sophisticated content, advanced targeting capabilities, and strategic programmatic partnerships can drive significant advertising revenue while maintaining high-quality viewer experiences.
The deployment of AI-powered advertising tools including planning capabilities and video generation represents an evolution in how streaming platforms optimize advertiser engagement. These capabilities position Disney to compete effectively against digital advertising platforms while offering unique advantages including exclusive content, extensive audience data, and cross-platform integration opportunities.
Disney's international expansion strategy, combining local content investment with advertising technology deployment, provides a blueprint for monetizing streaming services in markets beyond the United States. The company's success in launching advertising capabilities in Latin America and Europe demonstrates the global applicability of its advertising infrastructure and targeting capabilities.
The integration of clean room technology through platforms like Disney Compass and Amazon Publisher Cloud enables secure data collaboration while addressing privacy concerns that have reshaped digital advertising. These privacy-forward approaches allow advertisers to leverage first-party data for targeting without compromising user privacy, aligning with regulatory requirements and consumer expectations.
For marketing professionals, Disney's results reinforce the importance of premium streaming inventory within media plans. The platform's ability to deliver both reach and engagement creates opportunities for brand building and performance marketing across diverse advertiser verticals. The expanding programmatic access through major DSPs lowers barriers to entry while maintaining quality standards for ad placement.
The convergence of content quality, audience targeting, and programmatic efficiency demonstrated by Disney's platform positions the company as a critical component of connected television advertising strategies. As traditional television viewership continues declining and streaming consumption increases, platforms with comprehensive content offerings, sophisticated advertising technology, and strategic programmatic partnerships will likely capture growing shares of advertising budgets.
Who: Walt Disney Company reported first quarter fiscal 2026 financial results affecting its Entertainment SVOD services including Disney+, Hulu subscription video-on-demand, and Disney+ Hotstar (through November 14, 2024), serving advertisers through programmatic partnerships with major demand-side platforms including Google DV360, The Trade Desk, Amazon DSP, Yahoo DSP, and Magnite.
What: Entertainment SVOD revenue exceeded $5 billion with 11% year-over-year growth, while SVOD operating income climbed 72% to $450 million, representing an 8.4% operating margin. The company's streaming platforms deployed AI-powered advertising planning tools and video generators while expanding programmatic access through clean room technology integrations and direct DSP connections.
When: The quarter ended December 27, 2025, with earnings announced February 2, 2026. Disney expects to reach 10% SVOD operating margin for full fiscal 2026 and anticipates Q2 SVOD operating income of approximately $500 million.
Where: The streaming services operate globally with particular emphasis on international expansion in Latin America, Europe, and Asia-Pacific markets, supported by local content investments, advertising technology deployment, and measurement partnerships across multiple territories.
Why: The results demonstrate Disney's successful transformation of direct-to-consumer platforms into profitable advertising-supported businesses through strategic programmatic partnerships, sophisticated audience targeting capabilities via data infrastructure including Disney Compass, premium content performance with seven of the top 10 most-watched shows, and technology investments enabling real-time bidding for live streaming inventory. For marketing professionals, the performance validates connected television's growing importance within media plans as CTV budgets surge and programmatic buyers increasingly demand AI optimization capabilities.
