How DIS (The Walt Disney Company) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a global entertainment and media conglomerate like The Walt Disney Company (DIS) makes money is essential for investors and anyone interested in the business of media, entertainment, and experiences. In this post, we break down Disney's quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick The Walt Disney Company Overview

The Walt Disney Company operates as a diversified global entertainment leader, spanning media networks, streaming, film studios, theme parks, and consumer products. Revenue comes from content licensing, streaming subscriptions, theatrical releases, advertising, theme park admissions, resort stays, and merchandise sales. Disney’s business segments include Entertainment (film, TV, streaming), Experiences (parks, resorts, cruises), and Sports (primarily ESPN and related properties), each contributing to its robust revenue streams.

Revenue Breakdown

• Total Revenue (Q2 2025): $23.6B (+1.8% YoY)
  • Entertainment Revenue: $10.7B (45.4% of total, +1.2% YoY)
  • Experiences Revenue: $9.1B (38.5% of total, +8.3% YoY)
  • Sports Revenue: $4.3B (18.3% of total, -5.5% YoY)
  • Other Revenue: $0.5B (2.2% of total, +41.5% YoY)
  • Growth is powered by strong performance in Experiences (theme parks and resorts), offsetting softness in Sports.

Gross Profit and Margins

• Gross Profit: $7.7B (32.7% gross margin)
  • Cost of Revenue: $15.9B (+7.9% YoY)
  • Disney maintains robust margins due to its scalable content platforms, high-margin theme park operations, and global brand strength.
• Most costs come from content production, park operations, and licensing fees.

Operating Income and Expenses

• Operating Income: $3.6B (+3.4% YoY, 15.1% margin)
• Operating Expenses: $4.1B (-15.7% YoY)
  • R&D: Not separately disclosed for Q2 2025
  • SG&A: $4.1B (+6.9% YoY, 17.6% of revenue) — includes marketing, administrative, and sales costs supporting global operations and content distribution
  • Disney continues to invest in growth and innovation while maintaining efficiency in its operating structure.

Net Income

• Pre-Tax Income: $3.2B (+3.8% YoY, 13.6% margin)
• Income Tax: Not disclosed for Q2 2025
• Net Income: $5.3B (+100.8% YoY, 22.3% net margin)
• Disney converts a significant portion of sales into profit due to its brand-driven pricing power and operational leverage.

What Drives Disney's Money Machine?

• Experiences Revenue: 38.5% of revenue, driven by theme parks, resorts, and cruises, which saw the highest YoY growth +8.3%
• Content Monetization: Disney+ and other streaming platforms, along with theatrical releases, drive recurring and event-based revenue
• Strategic Investments: Focus on streaming technology, park expansions, and global content production
• Future Growth Areas: Direct-to-consumer streaming and international park development, though some segments (e.g., Sports) face margin pressure

Visualizing Disney's Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially SG&A) taking the largest chunk.
• Even after significant costs in content and park operations, 22.3% of revenue drops to the bottom line.

Key Takeaways

• Disney's money comes overwhelmingly from Entertainment and Experiences, with theme parks and content licensing as core drivers
• High gross and net margins illustrate the power of Disney's diversified, brand-driven business model
• Heavy investment in content and park infrastructure, balanced by efficiency in operating costs
• Ongoing growth is driven by global park attendance, streaming expansion, and content monetization

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FAQ About Disney's Income Statement

1. What is the main source of Disney's revenue in 2025?

Disney generates over 45% of its revenue from Entertainment (film, TV, and streaming), with Experiences (theme parks and resorts) contributing nearly 39%. Sports and other segments provide additional diversification.

2. How profitable is Disney in Q2 2025?

Disney reported net income of $5.3B in Q2 2025, with a net margin of approximately 22.3%, reflecting strong profitability driven by robust park attendance and content monetization.

3. What are the largest expense categories for Disney?

The biggest expenses on Disney's income statement are cost of revenue (content production, park operations) and operating expenses, particularly Sales, General & Administrative (SG&A) costs, which reached $4.1B in Q2 2025 as Disney prioritizes global marketing and distribution.

4. Why does the Sports segment operate at a loss?

Sports, despite generating $4.3B in revenue, posted a YoY decline and faces margin pressure due to high rights fees and investments in digital sports platforms. Disney continues to invest in this segment, believing it will drive long-term growth—even if the division is unprofitable today.

5. How does Disney's effective tax rate compare to previous years?

Disney's effective tax rate for Q2 2025 was not disclosed. Historically, the rate has fluctuated due to international structuring and tax benefits from share-based compensation.