AI Takeaway
Disney reported Q1 FY2026 revenue of $26.0B (+5.2% YoY), but operating income fell 9.1% to $4.6B and operating cash flow collapsed 77.1% to $735M, signaling significant cost pressures and working capital headwinds despite top-line growth.
Revenue
$25.98B
++5.23% YoY
EPS (Basic)
$1.34
-4.96% YoY
Operating Income
$4.6B
-9.09% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew 5.2% YoY to $25.98B in Q1 FY2026 from $24.69B in the prior-year period, indicating continued demand across Disney's diversified entertainment segments including streaming, parks, and media networks.
Source: Source: 10-Q Income Statement
Operating income declined 9.1% YoY to $4.6B from $5.06B, with the operating margin contracting approximately 280 basis points to 17.7% from 20.5%, suggesting cost growth is outpacing revenue gains.
Source: Source: 10-Q Income Statement & Key Ratios
SG&A expenses rose 4.9% YoY to $4.12B from $3.93B, contributing to the margin compression and reflecting higher administrative and marketing costs across the business.
Source: Source: 10-Q Income Statement
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Upgrade to unlockOperating cash flow fell 77.1% YoY to just $735M in Q1 FY2026, a dramatic decline from $3.21B in the prior year. If this trend persists, Disney may face constraints on funding content investments, capital expenditures, and shareholder returns simultaneously.
Source: Source: 10-Q Cash Flow Statement
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Upgrade to unlockReported EPS of $1.63 versus the $1.59 analyst consensus — a +2.8% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $25.98B | $24.69B | +5.23% |
Operating Income | $4.6B | $5.06B | -9.09% |
Net Income | $2.4B | $2.55B | -5.95% |
EPS (Basic) | $1.34 | $1.41 | -4.96% |
EPS (Diluted) | $1.34 | $1.40 | -4.29% |
SG&A Expense | $4.12B | $3.93B | +4.86% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $202.09B | $197.05B | +2.56% |
Current Assets | $25.47B | $23.67B | +7.60% |
Current Liabilities | $38.05B | $34.85B | +9.18% |
Stockholders' Equity | $108.48B | $101.93B | +6.42% |
Cash & Equivalents | $5.68B | $5.49B | +3.50% |
Long-Term Debt | $35.82B | $38.69B | -7.41% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $735M | $3.21B | -77.07% |
Investing Cash Flow | $-2.74B | $-2.58B | -6.29% |
Financing Cash Flow | $1.98B | $-997M | +299.00% |
Share Buybacks | $2.03B | $794M | +156.17% |
D&A | $1.32B | $1.28B | +3.13% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 17.7% | 20.5% | -2.79% |
Net Margin | 9.2% | — | — |
ROE | 2.2% | — | — |
ROA | 1.2% | — | — |
Current Ratio | $0.669 | — | — |
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Disney reported Q1 FY2026 revenue of $25.98B, up 5.2% YoY, but operating income fell 9.1% to $4.6B and net income declined 6.0% to $2.40B. The headline revenue growth was overshadowed by significant margin compression and a 77.1% collapse in operating cash flow to just $735M.
Disney's operating cash flow fell sharply from $3.21B to $735M YoY (-77.1%) in Q1 FY2026, though the specific drivers are not detailed in the available filing text. Possible causes include unfavorable working capital movements, higher content cost payments, or timing differences in cash receipts — a key area investors should monitor in the full 10-Q filing.
Yes, Disney significantly accelerated share repurchases to $2.03B in Q1 FY2026, up 156.2% from $794M in the prior-year period. Despite this aggressive buyback activity, diluted EPS still declined 4.3% YoY to $1.34, reflecting the pressure on underlying earnings.
The most pressing risks identified from the financial data include the severe 77.1% drop in operating cash flow, a current ratio of only 0.67 indicating a structural liquidity gap, and operating margin compression of ~280 basis points to 17.7%. Disney also carries $35.82B in long-term debt, which limits financial flexibility.
Disney's balance sheet shows mixed signals: total assets grew 2.6% to $202.1B and long-term debt was reduced 7.4% to $35.82B, but the current ratio of 0.67 means current liabilities ($38.05B) significantly exceed current assets ($25.47B), representing a notable short-term liquidity concern. Stockholders' equity grew 6.4% YoY to $108.5B, providing a solid long-term equity cushion.