Doubt has been cast on the accuracy of Disney’s documents after it emerged that the revenue of its theme parks division hit the lowest level of the year during the summer season for the past two years running despite claims in its filings that it generally increases in that period.
The discovery came to light through analysis of Disney’s results for the three months to September 27, 2025 which were announced on Thursday last week. Disney’s shares crashed 7.8% after it reported revenue of $22.5 billion for the quarter, missing analysts’ expectations of $22.8 billion and coming in roughly comparable with the prior-year period. It was driven by continued declines in Disney’s linear TV business, offset by strength in streaming and theme parks which sit in its Experiences segment.
The Experiences results are split into three categories – consumer products, and both domestic and international Parks & Experiences (including Disney Cruise Line). Revenue and operating income of all three categories increased on the same quarter in 2024 giving Disney a record year from Experiences.
The segment’s revenue rose 6% to $36.2 billion in the 2025 fiscal year leaving it with all-time high operating income of $10 billion. So it came as a surprise when Disney’s annual report revealed that attendance at its domestic theme parks was down by 1% during the year. International attendance increased by 1%, compared to 9% growth the previous year, which offset the domestic decline but still didn’t give Disney a net gain of visitors.
There is nothing surprising about a theme park operator’s revenue increasing even though attendance remains flat. Ticket price rises are the most logical mechanism to achieve this but higher per capita merchandise or food and beverage sales also have the same effect. More visits from guests who lack multi-day passes can even do it as they have to buy tickets for every day of their visit which costs more and thereby boosts revenue.
Nevertheless, the drop in attendance suggests that 2025 wasn’t entirely the walk in the park that Disney’s recent results indicate. It is unknown whether the bulk of the attendance loss was at the four parks of Walt Disney World in Florida or their two counterparts at Disneyland in California. However, what is known is that a fall of 1% represents a lot of people.
According to the Themed Entertainment Association (TEA), Disney’s domestic parks attracted 78.3 million visitors in 2024 so a 1% drop comes to a loss of 783,000 people which is far from insignificant.
On the face of it, there was no indication that the latest quarter was anything other than enchanting as the results of each Experiences category were up on the same period the previous year. However, a lot can change in any company over that length of time so looking at more recent trends can often give a better idea of the direction that performance is heading in.
Comparing the third and fourth quarter results of Disney’s Experiences segment this year reveals a sharp drop in revenue and operating income which may seem telling but in fact, it is perfectly normal. As Disney’s annual report points out, “each of our businesses is normally subject to seasonal variations and variations in connection with the timing of our product offerings.” Many companies have seasonal cycles and Disney’s Experiences segment is no exception.
However, drilling down even deeper into Disney’s data is much more illuminating. The operating income of its Experiences segment dropped 25% to $1.9 billion between the third and fourth quarters of this year which is the same percentage that it fell by between those two quarters in 2024. In contrast, the drop in the Experiences segment’s revenue doubled over the two periods, falling by 1.7% between the third and fourth quarters last year and by 3.5% during that time in 2025.
The widening of the drop wasn’t driven by consumer products as its revenue increased by 17.8% over the two quarters in 2024 and increased again this year by 17.6% to $1.2 billion.
Likewise, the international Parks & Experiences category wasn’t the culprit as its revenue declined by 1.2% between the third and fourth quarters in 2024 but rose by 3% to $1.7 billion over the same period this year. There is good reason for that. As this report revealed, attendance at Disneyland Paris plummeted by 1.8% to 15.8 million last year due to the Olympics which took place in the fourth quarter. With no Olympics this year, Disney’s international Parks & Experiences revenue rose from the third to the fourth quarter.
In contrast, revenue from Disney’s domestic Parks & Experiences dropped by 5.1% over that period in 2024 and crashed again by 8.5% to $5.9 billion this year. In turn, the drop in domestic Parks & Experiences’ operating income from the third to the fourth quarter widened from 37.1% last year to a massive 44.2% in 2025.
It remains to be seen why there was a sharper drop in domestic revenue and operating income this year from the third to the fourth quarter though the latter summer period followed the opening of Epic Universe, the mammoth Universal Studios theme park just minutes away from Disney World.
On its recent earnings call Disney played down the impact of Epic Universe as its chief financial officer Hugh Johnston said that “demand was, I wouldn’t characterize it as light. It basically came in line with our expectations. We’ve talked about Epic in the past, in particular, as something that we knew was going to be a factor in domestic parks, and, in fact, was very much in line with our expectations. If anything, it seems to be, in fact, impacting the rest of the competition down in Florida more that it’s impacting us. From a consumer perspective, we certainly feel good about it.”
Nevertheless, the revenue of Disney’s domestic Parks & Experiences still fell by 8.5% quarter-on-quarter over the three months to September 27, 2025, hitting the lowest level of the year.
You wouldn’t expect that on reading Disney’s annual report. It states that the impact of seasonal factors on its Experiences segment “generally results in increased revenues during the Company’s first and fourth fiscal quarters.” There is no doubt that the former is generally accurate but the latter is not as shown in the chart below.
To ensure a like-for-like comparison, the chart dates back to 2023 as that is when Disney formed its Experiences segment in a restructuring. The data in the chart comes directly from Disney’s filings and shows that its Experiences revenue has been lowest in the fourth quarter in two out of the past three years. The exception was 2023 when the fourth quarter Experiences revenue hit the second-lowest level of the year though this clearly doesn’t justify the claim that the segment generally has “increased revenues” during that time.
Putting this claim in complete context doesn’t explain away the contradiction. In full, Disney’s annual report states that “revenues at the Experiences segment fluctuate with changes in theme park attendance and resort occupancy resulting from the seasonal nature of vacation travel and leisure activities and seasonal consumer purchasing behavior, which generally results in increased revenues during the Company’s first and fourth fiscal quarters.”
The results of Disney’s Experiences segment demonstrate that this isn’t correct and the low fourth quarter revenue isn’t due to advance bookings for summer falling in a previous period. That is clear from Disney’s annual report which states that revenues from “theme park admissions are recognized when the tickets are used” and “merchandise, food and beverage sales are recognized at the time of sale.”
The claim that revenue from theme parks generally increases in the fourth quarter was only slightly more accurate before the dawn of the Experiences segment. Over the five years before 2023 the fourth quarter revenue of the theme park segment was the highest in one year, the second highest in two years and the second lowest in the remaining two.
This of course still doesn’t justify the claim that the segment generally has “increased revenues” during the fourth quarter. Even if it was once accurate in the dim and distant past it clearly isn’t the case now so should be removed from the annual report. Disney did not respond to a request for comment on why the statement is in its filings and whether it will be changed.
It is far from a technicality as it creates the impression that Disney’s Experiences segment gets a revenue boost in the summer season. The filings even claim that the reason for this is that “peak attendance and resort occupancy generally occur during the summer months when school vacations occur.” In reality, the revenue of Disney’s Experiences segment is generally the lowest of the year during that quarter.
Fortunately for Disney, its parks are busy during the winter holiday season which is why the first quarter revenue of its Experiences segment is generally the highest of the year. On Thursday’s call Johnston revealed that this year is no exception as forward bookings at Disney World “are up 3% in the first quarter.” He added that “they’re also up for the year. So [we] feel good about where demand is right now.”
Disney’s Experiences revenue hit an all-time-high of $9.4 billion in the first quarter of 2025 so if it rises on that in 2026 it should be music to investors’ ears. After the revenue of its theme park segment hit the lowest level of the year in the fourth quarter, the magic touch would come at just the right time.
Additional reporting by Chris Sylt