The paragraph is an introduction to The Walt Disney Company's Second Quarter 2025 Financial Results Conference Call. The operator initiates the call and introduces Carlos Gomez, the Executive Vice President, Treasurer, and Head of Investor Relations. Carlos welcomes participants and notes that various documents like the press release, Form 10-Q, and management's prepared remarks are available on Disney's investor relations website. The call is being webcast, with a replay and transcript available afterward. He also highlights a cautionary statement about forward-looking statements, emphasizing that these are based on current assumptions and are subject to risks and uncertainties, which could lead to actual results differing from expectations.

The paragraph announces Disney's plan to open a new theme park in Abu Dhabi, marking another milestone in the company's history. CEO Bob Iger, speaking from the UAE, highlights that Disneyland Abu Dhabi will blend Disney's magic with Emirati culture and serve as a major entertainment destination for travelers from various regions. This will be the seventh Disney theme park resort, offering immersive experiences through a mix of contemporary design and advanced technology.

Disney has formed a strategic partnership with the Miral Group of Abu Dhabi, where Disney will manage the design, licensing, and operations while Miral provides the capital and construction resources for a new destination. Disney is expanding globally, investing over $30 billion in U.S. theme parks in Florida and California. This expansion is part of broader strategic priorities aimed at future growth. The company's second quarter results showed strong performance, with a 20% increase in adjusted EPS compared to the previous year. The Experiences segment, which plays a crucial role in Disney's growth, delivered record-high returns.

The paragraph highlights the strong performance and growth prospects of Disney's various business segments, despite some macroeconomic uncertainties and competitive pressures. The company reports success in its Entertainment division, with the Marvel film "Thunderbolts" opening as a global hit and several promising releases lined up for the year. Disney also notes strong sports viewership, particularly on ESPN, and hints at growing its direct-to-consumer offerings with a new ESPN product. Overall, Disney remains optimistic about revenue growth and profitability in its streaming business, which remains a core focus for the company.

In the paragraph, the speaker discusses the company's strategic initiatives aimed at enhancing the user experience and business growth, highlighting a successful first half of the fiscal year. The company is confident in its direction and optimistic about future performance. During a Q&A session, Ben Swinburne from Morgan Stanley asks about the effects of including Hulu and sports content into Disney+ on user engagement and sign-ups, as well as the company's ongoing growth strategy forecasted for the next few years. Bob Iger responds, confirming the strategy and outlook remain strong and are expected to drive business growth.

The paragraph discusses Disney's strategy for growing its streaming business by integrating Disney+ and Hulu to enhance user experience and decrease churn. The company also plans to launch ESPN direct-to-consumer with smart bundling, offering an unrivaled combination of Disney brands, general entertainment from Hulu, and live sports. Disney aims to leverage technology to further improve its streaming platforms through personalization, customization, and advancements in ad-tech, with significant upgrades expected in the near future.

The paragraph discusses the company's strategy for growth by investing in local content outside the U.S., noting that while it takes time to book costs until shows air, they are targeting specific international markets for development. Hugh Johnston confirms an increased financial guide for the year, maintaining long-term expectations. Stephen Khong from Wells Fargo congratulates the company on their Abu Dhabi venture and inquires about their location choice and target audience. He also asks about the improved domestic park margins, questioning whether the increase was mostly due to cruise operations or if there were underlying improvements in park margins. Hugh Johnston responds, noting margin improvements across all parks and experiences, not just from cruises.

Bob Iger discusses Disney's strategic consideration of opening a theme park in Abu Dhabi, highlighting the Middle East as a region with substantial potential due to the significant number of income-qualified individuals who find traveling to existing Disney locations costly and lengthy. He notes the successful sale of a new Disney cruise ship in Singapore as evidence of strong regional demand for Disney experiences. Iger emphasizes Abu Dhabi's advantageous location, with a large population within a four-hour radius and significant projected tourist numbers. He appreciates Abu Dhabi's commitment to quality, innovation, arts, creativity, and technology, making it an attractive location for Disney's expansion.

The paragraph discusses the decision-making process and positive experiences of choosing a certain location for a partnership, highlighting its existing architectural features like the Louvre and Guggenheim. The speaker emphasizes the strong connection and shared values with their partners at Miral and expresses confidence in the decision. The conversation then shifts to Bob Iger discussing Disney's upcoming theatrical slate, expressing excitement and confidence, particularly in the live-action "Lilo & Stitch" film, as well as the potential of Marvel films like "Thunderbolts" to drive value for Disney.

The paragraph outlines Disney's upcoming film and television releases, mentioning a strong lineup that includes titles like Pixar's "Elio," "Fantastic Four," "Tron," "Zootopia," and "Avatar" this year, followed by "Avengers," "Mandalorian," "Toy Story," and a live-action "Moana" next year. The speaker reflects on the company's past focus on quantity over quality, particularly with Marvel, and suggests that a renewed focus on fewer, better-quality productions is expected to improve outcomes, highlighting "Thunderbolts" as an example. The discussion then shifts to a Q&A session, where Jessica Reif Ehrlich asks about advertising trends and a project in Abu Dhabi. Bob Iger responds to the Abu Dhabi inquiry, indicating that Disney is not investing capital but does not clarify if there is ownership or just a royalty arrangement. Hugh will address the advertising questions.

The paragraph discusses Disney's licensing arrangement for a new theme park, where Disney retains its intellectual property and licenses it to a partner who will operate the park. Disney will be heavily involved in ensuring the park meets its established quality standards by embedding employees within the partner's organization. Additionally, there's an update on Disney's advertising market, which is performing well, particularly in live sports, with significant growth noted in ESPN's advertising revenue. There is strong demand from sectors like restaurants and healthcare, although the direct-to-consumer side faces challenges due to increased supply from new market entrants. Overall, Disney expects their advertising growth to exceed initial projections for the year.

In the paragraph, Bob Iger discusses the approach to launching ESPN's new flagship service. He emphasizes that current subscribers of linear ESPN will automatically have access to this new service, although it will be known by a different name, which will be revealed soon along with the pricing strategy. The goal is to maintain a balance between traditional multichannel offerings and growing the direct-to-consumer (DTC) business. While the linear service will contain most of the core sports and studio programming, the DTC service will include additional features such as betting and fantasy sports. Iger notes the company's extensive portfolio of licensed sports and programming, which will be available across both platforms.

The paragraph discusses Disney's strategy to enhance the consumer experience by integrating Disney+, Hulu, and ESPN DTC services, offering users a taste of live sports with the aim of upselling them to Disney's direct-to-consumer service. The service is intended to be more feature-rich than the linear service, with clear distinctions between available options. The goal is a seamless, integrated experience across the platforms, benefiting subscribers. The latter part shifts to a Q&A segment where Michael Morris from Guggenheim asks about the Experiences segment of Disney, specifically about U.S. demand and the potential for double-digit operating income growth beyond fiscal '26, considering previous guidance of high-single-digit growth.

In the paragraph, Hugh Johnston addresses questions about the outlook for Disney's experiences business and international demand, particularly in China. He reports that bookings for Walt Disney World are up for the third and fourth quarters, reflecting optimism and influencing a change in guidance. Although international demand, specifically in China, isn't worsening, spending per person is lower due to economic challenges faced by Chinese consumers. Johnston anticipates that the experiences business will hit the higher end of their 6% to 8% growth guidance for this year, but refrains from providing specific guidance for 2026.

In the article paragraph, Michael Ng from Goldman Sachs asks about the learnings from the launch of Disney Treasure and expectations for upcoming cruise ships, as well as about international visitation at Disney's domestic parks. Bob Iger responds that the Disney Treasure has been well-received due to its high-quality integration of Disney intellectual property, and future ships will build on its success. He notes that the cruise business is expected to be a growth driver over the next few years with more ships being deployed. Hugh Johnston adds that international attendance at domestic parks is still below pre-COVID levels but remains in double digits, with a minor impact on the overall mix. He expects this trend to continue.

The paragraph discusses the expansion of parks by a company, mentioning the recent announcement of a park in Abu Dhabi and an existing presence in Singapore. Bob Iger responds to a question about further global expansion by indicating that, while no immediate plans for an eighth park are in place, they are not ruling out future locations. He emphasizes the company's focus on capital investment to enhance the business due to its high return on investment. Additionally, there is a mention of potential cost opportunities in the streaming segment through revenue growth and platform alignment.

The paragraph discusses a $30 billion investment plan to expand operations in Florida and California, reflecting confidence in these locations and potential job growth. The company is also expanding operations in other locations and enhancing accessibility through cruise ships. While another location isn't a current priority, future possibilities aren't dismissed. On the streaming side, opportunities exist for revenue growth and cost reduction, particularly in general and administrative expenses. Investment is planned in technology and content, including ESPN, with expectations of gaining marketing leverage over time.

The paragraph discusses the company's strategy to invest $30 billion in expanding its experiences segment in Florida and California. Bob Iger emphasizes that guest experience is crucial and they limit park attendance to ensure quality. The expansion aims to utilize existing property and intellectual property to add capacity without harming the guest experience. Specific projects mentioned include adding a villain's land, a car's land in Florida, and attractions in California like Pandora and Coco. The company has achieved record levels of return on invested capital in this area.

The paragraph discusses a conversation with Josh Damaro from Disney in 2022 about the impressive returns on invested capital before COVID-19. The speaker emphasizes the importance of allocating the company's capital towards areas with stellar returns. The paragraph concludes with Carlos Gomez thanking participants and the operator ending the conference call.

This summary was generated with AI and may contain some inaccuracies.