Disney (NYSE:DIS) reported its fiscal first-quarter earnings after the market close Thursday and removed any doubt about the importance of its streaming ambitions. The company’s direct-to-consumer (DTC) services reached more than 146 million paid subscribers. Disney said memberships for its flagship service Disney+ surged to 94.9 million, adding more than 21 million in the first quarter alone. New members were attracted by hits like The Mandalorian and WandaVision.
Even more startling, Disney reported a surprise profit of $17 million, or earnings per share of $0.02, though it marked a 98% decline from the prior-year quarter. Revenue of $16.2 billion was down 22% year over year, but up sequentially from $14.7 billion in Q3. The company also burned $685 million in cash during the quarter.
Revenue from the DTC business did some of the heavy lifting, climbing to $3.5 billion, up 73% year over year. The company’s other streaming networks did their part, as ESPN+ subscribers jumped to 12.1 million, up 83% year over year, while total Hulu subscribers climbed 30% to 39.4 million.
Broadcast and cable TV (linear networks) held the line, edging 2% higher, to $7.7 billion. Unfortunately, Disneyland Resort in California remained shuttered due to the pandemic, with partial closures of Disneyland Paris and Hong Kong Disneyland. This weighed on Disney’s parks, experiences, and products segment, as revenue slipped 53% to $3.6 billion.
Disney CEO Bob Chapek chose to see the glass as half full. “We believe the strategic actions we’re taking to transform our company will fuel our growth and enhance shareholder value, as demonstrated by the incredible strides we’ve made in our DTC business, reaching more than 146 million total paid subscriptions across our streaming services at the end of the quarter,” he said.
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