Disney Shifts Focus from Margins to Revenue Growth as Streaming Turns Profitable
At the Goldman Sachs Communacopia + Technology Conference 2026, Disney CFO Hugh Johnston outlined the company's growth story. The focus has shifted from margin expansion to revenue growth and operating income. Disney+ reached 13% operating margins in its latest quarter after years of heavy losses.
The service moved from annual losses of about $2 billion to sustained profitability. This fiscal year, the company expects 12% underlying earnings per share growth, with continued double-digit growth in fiscal 2027. Entertainment and experiences account for about 85% of total earnings and are driving future growth.
Disney is building a broader Disney+ ecosystem, which could include video, live TV, gaming, merchandise, parks, cruises, and talent interaction. The company wants to create a 'virtuous circle' where cost control funds reinvestment, driving growth and operating leverage. Artificial intelligence and tighter cost management will support this cycle.
The Disney+ app is being integrated with Hulu, and live TV integration is in development. Mobile viewing improvements are also underway. A partnership with TikTok aims to attract younger users and create short-form content for mobile screens. The company sees intellectual property as its main competitive advantage.