Walt Disney reports $33 million equity loss from India joint venture in Q1 2025

The Walt Disney Company has reported a significant financial realignment in India following the deconsolidation of Star India in Q1 FY25, transitioning it into a joint venture (JV). This move has reshaped the company’s revenue contribution and financial outlook for the region.

According to Disney’s Q1 FY25 earnings report, the India business is expected to contribute $73 million to the Entertainment segment’s operating income for the fiscal year, a sharp decline from $254 million in the previous year.

However, the sports segment in India is expected to turn profitable, contributing $9 million in operating income for FY25, the company said, adding that it is a major improvement from FY24, when the segment incurred a massive $636 million loss.

The Q1 earnings for fiscal 2025 released by the company included approximately one and a half months of Star India operating results, whereas fiscal 2024 included a full year of results.

After November 14, 2024, Disney began recognising their share of the India JV in “Equity in the income of investees.”

According to Walt Disney, the JV structure led to an equity loss of $33 million in Q1, primarily due to purchase accounting adjustments, Walt Disney said, adding that it anticipates the full-year equity loss from the India JV to be around $300 million, largely driven by similar accounting factors.

“The Company and Reliance Industries Limited (RIL) completed their transaction to form a joint venture (India joint venture) that combines the Company’s Star-branded and other general entertainment and sports television channels and direct-to-consumer Disney+ Hotstar service in India (Star India) and certain media and entertainment businesses controlled by RIL (the Star India Transaction). RIL has an effective 56% controlling interest in the joint venture with 37% held by the Company and 7% by Bodhi Tree Systems, a third party investment company,” the company said.

According to the financial statement of the company for the first quarter ending December 28, 2024, the company reported a 5% jump in its revenue in the first quarter of FY2025, to $24.7 billion, compared to $23.5 billion in Q1 of fiscal 2024.

The advertising revenue of the company saw a dip. While it stood at $ 3.34 billion in Q1 2024, the amount came down by $100 million to $3.24 billion in Q1 2025.

The subscription revenue, however, saw a jump from $4.92 billion in Q1 2024 to $5.49 billion in Q1 2025.

The income from TV/video on demand (VOD) and home entertainment distribution also went up in Q1 2025 to $1.02 billion from 0.8 billion in the same period previous fiscal.

The revenue from sports from Star India alone stood at $39 million in Q1 2025, massively down from $399 million in the same quarter last year.

Revenue from entertainment for Q1 2025 stood at $10.8 billion, 9% up from $9.9 billion in Q1 2024. Out of this, revenue from Direct-to-Consumer stood at $6.07 billion in Q1 2025, up from $5.5 billion in Q1 last year.

According to the report, operating income from international linear networks declined by $85 million in Q1 2025, reflecting the impact of the Star India transaction.

Its income before income taxes saw a significant rise of 27%, reaching $3.7 billion, up from $2.9 billion in the same quarter of the previous fiscal year.  Depreciation and amortisation expenses went up from $1,243 million in Q1 2024 to $1,276 million in Q1 2025. The company saw restructuring and impairment charges costing Rs $143 million this quarter.

Additionally, diluted earnings per share (EPS) experienced a substantial 35% increase, climbing to $1.40 from $1.04 in Q1 of fiscal 2024, highlighting improved earnings efficiency.

The company’s CEO Bob Iger said, “Our results this quarter demonstrate Disney’s creative and financial strength as we advanced the strategic initiatives set in motion over the past two years.”

“In fiscal Q1, we saw outstanding box office performance from our studios, which had the top three movies of 2024. We further improved the profitability of our Entertainment DTC streaming businesses. We took an important step to advance ESPN’s digital strategy by adding an ESPN tile on Disney+. Additionally, our Experiences segment demonstrated its enduring appeal as we continue investing strategically across the globe.

“Overall, this quarter proved to be a strong start to the fiscal year, and we remain confident in our strategy for continued growth,” he said.

In its earnings report for the previous quarter, that is Q4 2024 released in November last year, the company had reported a 6% increase in its total revenue.