Our earnings release and Form 10-Q were issued earlier this morning and are available on our IR website. Our IR website includes a cautionary statement regarding the forward-looking statements. Today's webcast may include forward-looking statements that we make pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, including regarding the company's future business plans, prospects and financial performance are not historical in nature and are based on management's assumptions regarding the future and are subject to risks and uncertainties, including, among other factors, economic, geopolitical, operating and industry conditions and decisions and legal and regulatory developments. Refer to our IR website, the earnings release and 10-Q issued today and the risks and uncertainties described in our Form 10-K and subsequent filings with the SEC for more information on risks that could cause results to differ. A reconciliation of certain non-GAAP measures referred to on this webcast to the most comparable GAAP measures is on our IR website.

Good morning. Welcome to the Walt Disney Company Fiscal Second Quarter Earnings Call. Thank you for joining us. I'm Ben Swinburne, Executive Vice President of Investor Relations and Corporate Strategy. With me today are Josh D'Amaro, our Chief Executive Officer; and Hugh Johnston, our Chief Financial Officer. While we intend to keep our prepared remarks brief on future earnings calls, as this is Josh's first opportunity to speak to the investment community as CEO, we wanted to take the extra time for you to hear from him directly regarding his priorities for the company. You will notice that we've adjusted our earnings materials to shift our focus more toward the Walt Disney Company as a whole rather than its individual segments. This is deliberate as we hope it helps explain why we believe the company is uniquely positioned, lays out our strategy and illustrates how our various business lines operate together. We also shifted to a shareholder letter this quarter, with the intent of including all the information we hope is helpful to the financial markets in one place. After Josh's remarks, we will take questions from the analyst community. And with that, let me turn it over to Josh.

Thank you, Ben. I want to begin by saying just how honored I am to be leading the Walt Disney Company. This is one of the world's truly great companies built over more than a century through powerful storytelling, constant innovation and a singular ability to forge deep emotional connections with audiences all around the world. I step into this role with genuine appreciation, a strong sense of responsibility and real optimism about what lies ahead. I also want to express my gratitude to Bob Iger. Bob led Disney with extraordinary vision. He led it with discipline and ambition. And because of that leadership, this company stands on a strong foundation with real momentum. I'm fortunate to be leading a company with exceptional assets, talented leaders and a well-defined strategic direction. My immediate focus is clear. We will execute with discipline against the plans and commitments we've already communicated to the market, staying focused on the priorities that we believe will unlock value for our shareholders. First, investing in the breakthrough creative storytelling that sets Disney apart; second, strengthening our streaming business through product and technology innovation; third, fully capturing the power of live sports as we continue building ESPN's direct-to-consumer business; and fourth, delivering on our bold growth plans at Disney Experiences. At the same time, while we execute our current plan with focus and precision, we're actively laying the groundwork for Disney's next phase of growth. Disney is uniquely positioned in the entertainment industry. No other company reaches consumers to the same degree across both digital and physical environments. Our goal is to leverage that position to extend our reach, deepen engagement and generate greater value from our world-class intellectual property. To fully capture this opportunity, we'll embrace technology more aggressively and build a more connected consumer experience with Disney+ right at the center. However, this morning, I want to stay focused on execution, how it's showing up in our results today and what it means as we head into the back half of the year. In the second quarter, we grew revenue and total segment operating income 7% and 4%, respectively, relative to the prior year and outperformed our guidance for the quarter. The outperformance was driven by stronger-than-expected revenue growth. Let's turn to our operating results in the quarter starting with streaming. Our focus remains consistent: improve the consumer experience, deepen engagement and continue building a healthy and more durable growth business. We made meaningful progress during the quarter on the platform itself with product enhancements that improve the Disney+ user experience. We were pleased with our entertainment SVOD financial performance this quarter, notably a sequential acceleration in revenue growth from 11% in Q1 of '26 to 13% in Q2. Importantly, subscription revenue growth was driven by both rate and volume. Additionally, we saw double-digit advertising revenue growth compared to the prior year period. We are highly focused on churn, and we continue to see the integrated Disney+ and Hulu experience benefiting retention. Disney+ has meaningful opportunity for growth internationally, and we're focused on scaling outside the U.S. We are increasing our local content investments and early results are encouraging. While more work remains, we're pleased with the progress we're making in both the consumer experience and underlying economics. Our IP remains central to our long-term streaming success. And we continue to invest in the great storytelling, franchises and talent that define Disney and fuel our film and television content. Highlights in the quarter that demonstrated this focus included returning series High Potential and Paradise along with our new limited series Love Story: John F. Kennedy Jr. & Carolyn Bessette. And we, of course, see the potential of the strategy in films like Zootopia 2, which not only generated $1.9 billion in global box office, but the franchise has now surpassed 1 billion hours streamed on Disney+. During the quarter, we released Pixar's Hoppers to critical success. A strong reminder of Pixar's track record of creating meaningful original IP that resonates with audiences all around the world. We are thrilled with last weekend's opening of The Devil Wears Prada 2. And as we look ahead, we're excited about our upcoming film slate, including The Mandalorian & Grogu, Toy Story 5, the Live-Action Moana and Avengers: Doomsday. When you look at our upcoming slate of franchise films, each has potential to resonate with our fans well beyond its initial release, moving across platforms, experiences and products in a way that deepens engagement and extends reach over time. At Disney Experiences, we continue to demonstrate strength in the core business and make progress against our growth initiatives with strong revenue growth of 7% and segment operating income growth of 5% in the quarter. Both revenue and segment operating income were ahead of our prior expectations and represent second quarter records. Over the past few quarters, the team has successfully navigated known attendance headwinds. We are now starting to lap these headwinds and expect attendance trends at our domestic parks to improve in Q3 when compared to the results we reported for Q2 today. Since our last call, Disney Cruise Line launched the Disney Adventure, our first ship homeported in Asia. And at Disneyland Paris, we opened World of Frozen as part of the reimagined Disney adventure world. These are meaningful milestones that extend the reach of our brands to new markets and new fans around the world. The strong demand that we're seeing for these attractions reinforces our confidence in the long-term opportunity across our portfolio of experiential assets, parks, cruise line and immersive experiences alike. We remain mindful of the near-term variability but are also well positioned to benefit from sustained consumer demand for live entertainment at a scale unique to Disney. Speaking of the power of live, ESPN continues to build toward a stronger direct-to-consumer future. Enhancements to the ESPN app, including Multiview, Verts and SportsCenter for You are making the offering increasingly compelling for fans. As we manage this business in transition, we remain focused on serving sports fans in a way that fully captures the value of ESPN and live sports within Disney's broader direct-to-consumer offering. Looking at the first half of the fiscal year and our expectations for the second half, we're executing with focus, delivering against our stated commitments and investing in areas that we believe will drive long-term value. As we look ahead, my strategic priority as CEO builds directly on that foundation. Let me summarize my long-term perspective briefly here. First, creative excellence: it will remain at the center of everything that we do. Creativity is Disney's greatest competitive advantage. It's always been the quality of our storytelling and the enduring connection our brands have with audiences all around the world. Second, we have a real opportunity to deepen our direct relationship with our fans by creating more connected Disney experiences across streaming, sports, games and experiences with Disney+ playing an increasingly central role. Third, technology: it can be a powerful accelerant for Disney, improving the consumer experience across our business lines, driving operational efficiency and unlocking new possibilities for creativity, growth and returns. To wrap up, our immediate priority is disciplined execution, but I'm equally energized about the opportunities ahead. Disney has iconic brands, extraordinary creative talent, powerful platforms and unmatched experiences. Our job is to execute with rigor, to invest with confidence and connect those strengths in ways that create lasting value for consumers and shareholders alike. With that, I'll turn it back over to Ben to begin our Q&A.

Thanks, Josh. We will now turn to questions from the analyst community. So our first question is from Sean Diffley from Morgan Stanley. This is for you, Josh, on strategic priorities. What are your three biggest priorities going forward? What are the biggest synergies between the businesses today? And any examples of how Disney can leverage learnings across its businesses?

This is for you, Josh, on strategic priorities. What are your three biggest priorities going forward? What are the biggest synergies between the businesses today? And any examples of how Disney can leverage learnings across its businesses?

Thanks, Sean. First and foremost, I'm focused on executing on the priorities that we've already communicated to the market. In fact, I just hit them in my prepared remarks. First, we're focused on creating best-in-class content. Second, we're strengthening our streaming businesses and driving top-line growth and profitability. Third, we're continuing to take advantage of the growing power of live sports and build ESPN's direct-to-consumer business. And then, of course, we're turbocharging Disney Experiences all across the globe. While we're focused on executing these priorities, we're also starting to lay the groundwork for the next phase of growth. A few high-level thoughts on that: First, we'll continue to build and fully leverage all of our IP. This starts with great storytelling, but the opportunity will be broader than that. We'll invest in both existing franchises and new IP, building on brands like Toy Story while also creating new stories that connect with generations of fans across the globe. The key is fully harnessing that IP across the whole company — in film and streaming, across our experiences, products and games so that each of our successes compounds in value over time. Second, we have a real opportunity to deepen our direct relationships with our fans by creating a much more connected Disney experience across streaming, sports, games and experiences, with Disney+ right at the center. Third, technology can be a powerful accelerant for Disney. It can improve the consumer experience across our businesses, drive operational efficiency and unlock brand-new possibilities for creativity, growth and returns. When you put that all together, our next phase of growth will be centered on creative excellence, a more connected fan experience and technology as an accelerant. But to be clear, in the immediate term, I'm staying focused on delivering the priorities that we currently have in motion. Thanks for the question.

Great. Thank you, Sean. Thank you, Josh. We're going to now turn to two questions on our direct-to-consumer streaming strategy. First question is from Michael Ng from Goldman Sachs, probably for you, Josh. The success in the parks was built on driving per capita and attendance through high-touch immersive storytelling. As you take the helm of the company, how do you replicate this high LTV model within Disney+? Specifically, does Disney+ become less a video repository and more of an interactive hub, including merchandise, park access and games integration?

The success in the parks was built on driving per capita and attendance through high-touch immersive storytelling. As you take the helm of the company, how do you replicate this high LTV model within Disney+? Specifically, does Disney+ become less a video repository and more of an interactive hub, including merchandise, park access and games integration?

Thanks, Michael. Lifetime value is something we're focused on across the whole enterprise. Disney has the world's most passionate and loyal fans. In our theme parks you see it all the time: they're a high-touch, high-LTV business and our biggest fans tend to be repeat visitors. A large number of our park visitors are also Disney+ subscribers, but there are millions of Disney+ subscribers who aren't regular park visitors. That's where we're focused. Our parks are essentially the physical centerpiece of the company, and similarly, we're building Disney+ to serve as the immersive, interactive digital centerpiece of the company. Over time, those pieces of the company will become increasingly connected. When we do this well, the lifetime value equation changes fundamentally. A fan who watches a Disney film, visits a park, plays a game and buys our merchandise isn't just a subscriber; they're in a relationship with a company that spans years and can generate value across every part of our business. That's the model we're building toward.

Great. We're now going to take a question from David Karnovsky from JPMorgan. Again, I think for you, Josh. As you think about Disney+ domestically, what path do you see to organically grow engagement? How do you think about this in terms of your own content but also through making the platform a portal through which third parties can distribute programming?

As you think about Disney+ domestically, what path do you see to organically grow engagement? How do you think about this in terms of your own content but also through making the platform a portal through which third parties can distribute programming?

Thanks, David. Despite a competitive streaming marketplace, we saw an increase in engagement in the quarter. Our key drivers for engagement growth include content and product enhancements. On content, we'll continue to deliver exceptional programming across franchise films, television, live sports, general entertainment and international local programming. On product, the team is focused on improvements that reduce user friction, enable more intuitive discovery and help users decide what to watch sooner. For example, our video and browse initiative launched in the U.S. in January lets subscribers preview content directly while browsing so they don't have to click in and out of titles. Our tech team is making nice strides with experimentation. Engagement is critical to reducing churn; reducing churn might be the single most significant opportunity we have. On third-party distribution, we're selective but not closed. The right partnerships — whether on content or distribution — need to strengthen the Disney+ experience and deepen the fan relationship. Our bundling approach inside of Disney is a good example: it drives lower churn and higher engagement than services on their own. We'll continue to evaluate opportunities through that lens.

Okay. Next question is from Rich Greenfield at LightShed Partners. I think this is for you, Josh. You recently stated Disney+ will continue to evolve beyond the traditional streaming service to become the digital centerpiece of the company — a portal that connects stories, experiences, games, films and more in entirely new ways. Rich's questions are: what do you mean by digital centerpiece? Does it imply a shift away from third-party licensing and distribution to drive engagement with Disney+? How do you think about the trade-offs of reach and exposure on third-party platforms versus keeping content exclusive to Disney streaming platforms? And how do you reconcile Disney+ as the digital centerpiece with the Epic Games partnership that will place a Disney universe into Fortnite?

You recently stated Disney+ will continue to evolve beyond the traditional streaming service to become the digital centerpiece of the company — a portal that connects stories, experiences, games, films and more in entirely new ways. What do you mean by digital centerpiece? Does it imply a shift away from third-party licensing and distribution to drive engagement with Disney+? How do you think about the trade-offs of reach and exposure on third-party platforms versus keeping content exclusive to Disney streaming platforms? And how do you reconcile Disney+ as the digital centerpiece with the Epic Games partnership that will place a Disney universe into Fortnite?

Great question, Rich. First, digital centerpiece means Disney+ becomes the primary relationship between Disney and its fans — the place where everything comes together: entertainment, sports and experiences. It's less about a single product and more about a strategic posture. On third-party licensing, we distinguish between franchise IP and general entertainment. Franchise and brand IP stays on our platform; general entertainment library content can find audiences elsewhere, and that's been working well financially. Regarding Epic Games, Disney+ is the hub, but the hub needs spokes. Epic gives us an interactive, gaming-native environment to reach audiences, particularly younger ones, that we don't currently own. Think of that as acquisition and engagement feeding the centerpiece, not competing with it. Our roadmap runs from near-term streaming optimization and content investment through medium-term interactivity — vertical video, personalized ESPN, Parks AI work — to a longer-term single point of contact with our fans that drives lifetime value across everything we do. The through line is the fan relationship.

Okay. We're now going to move to three questions on Disney Experiences. I think for Hugh, a question from Sean Diffley at Morgan Stanley. On core U.S. parks trends, can you unpack the international visitation and Epic-related headwinds that you are seeing and if they are sequentially better or worse over the last few quarters?

On core U.S. parks trends, can you unpack the international visitation and Epic-related headwinds that you are seeing and if they are sequentially better or worse over the last few quarters?

Thanks for the question, Sean. We expect international visitation and Epic-related headwinds to ease in the coming quarters as we begin to lap both of those impacts. Q2 experiences results came in ahead of our prior guidance despite the fact that these headwinds did have some impact in the quarter on segment operating income, which was up 5%, and attendance in domestic parks, which was down 1%. While Q2 saw the full impact of those headwinds, excluding just the international visitation impact, domestic parks attendance would have grown. Our revenue growth for the quarter was 7% in Experiences and the lack of flow-through to operating income this quarter was driven primarily by preopening costs for World of Frozen and the Disney Adventure, which we won't be incurring in the second half of the year. We recognize that domestic attendance is an important metric for investors and we're focused on it as well. We're investing to grow our global footprint, including plans to expand the cruise line fleet from eight currently to thirteen ships by 2031. Tying our guest demand to our capital plans more directly, global guests — which aggregates domestic and international parks attendance along with passenger cruise days — grew more than 2% in Q2. The good news is, as we look forward, we expect growth to improve in the back half, and our forward bookings are very encouraging as we look to the rest of the year.

Great. Another question. This is from Steven Cahall from Wells Fargo. Hugh, have you picked up any change in behavior at domestic or international parks due to the increased price of oil and gasoline? How are you managing around these risks? And at this point, do you anticipate any shift to your adjusted EPS growth guidance for fiscal '26 or fiscal '27 due to macro factors?

Have you picked up any change in behavior at domestic or international parks due to the increased price of oil and gasoline? How are you managing around these risks? And at this point, do you anticipate any shift to your adjusted EPS growth guidance for fiscal '26 or fiscal '27 due to macro factors?

Thanks, Steve. No, we haven't seen any change in consumer behavior from elevated gas prices thus far and are currently seeing a material impact on the remainder of the fiscal year based on forward bookings. Disney World bookings are pacing up strongly. Even with our 40% increase in cruise capacity, booked occupancy remains in line with the prior year. However, we're mindful of the macro uncertainty consumers are facing, and we're not immune to the impacts, including how a significant further rise in fuel prices from current levels could eventually lead to changes in consumer behavior. If that possibility were to occur, each business has levers in place to make adjustments to help offset those kinds of macro pressures. As we communicated in our letter, we expect 12% growth in adjusted EPS for fiscal '26 and double-digit growth of adjusted EPS for fiscal '27, both excluding the impact of the 53rd week.

Great. Maybe over to you, Josh, last question on Experiences. This is from Rick Prentiss at Raymond James, looking for an update on the capital expenditure investment program. What are you most excited about? What have you learned from the recent openings of World of Frozen at Disneyland Paris? When can we expect the investments to drive an inflection upward in attendance at the parks?

Looking for an update on the capital expenditure investment program. What are you most excited about? What have you learned from the recent openings of World of Frozen at Disneyland Paris? When can we expect the investments to drive an inflection upward in attendance at the parks?

Thanks, Rick. I'm excited about a lot. The capital investments we're making to create new experiences based on our most popular IP are an important part of our strategy to continue growing our experiences business. These investments diversify our portfolio and allow us to reach more Disney fans. I was at the opening of World of Frozen in Paris in March. If you get an opportunity to go and see it, you can understand why the guest response has been so great. It completely transformed our second gate at Disneyland Paris. We have so much more of this coming around the world, and the investments are working hard for us. While we haven't officially announced opening dates for some other major attractions, we have more projects underway around the globe than at any time in our history. In '26, most of our forecasted CapEx in Experiences includes the new ship and the ramp of major new expansions at Walt Disney World in Orlando, Disneyland and our Shanghai Disney Resort. Looking to the next decade, the majority of our CapEx is earmarked for investments that expand our capacity. Our business has a solid track record of generating great returns and driving long-term earnings and cash flow growth. Each one of these investments is individually justified and designed to entertain guests for generations to come. We also have a few exciting expansions underway using a capital-light model — a new cruise ship with an oriented land company in Japan and a new theme park in Abu Dhabi with our partner Miral. Demand is healthy. We're expecting attendance at our domestic parks in Q3 compared to the prior year period to show improvement compared to the 1% decline reported in Q2, as headwinds related to international visitation stabilize and we begin to lap the opening of Epic Universe.

Great. We have two questions now on the content front. Josh, this one's from Jessica Reif Ehrlich from Bank of America. Some of Disney's greatest growth years were driven by original IP from Disney, Pixar and Marvel. Can you provide color on how you plan to supercharge your content division? What changes should we expect now that content is unified under Dana Walden?

Some of Disney's greatest growth years were driven by original IP from Disney, Pixar and Marvel. Can you provide color on how you plan to supercharge your content division? What changes should we expect now that content is unified under Dana Walden?

Thanks, Jessica. Creativity is central to our strategy, and we're focused on investing in IP that breaks through and builds enduring fan connections. Zootopia is a prime example. We understand the importance of investing in existing franchises while taking creative risks to build brand-new ones. Pixar's Hoppers is an example of original IP with strong critical reception, and Pixar has released eight original films since 2017, more than many competitors over that period. Consolidating our creative engines and distribution under Disney Entertainment streamlines operations, unlocks synergies and accelerates decision-making. Dana Walden is already moving on this. She has a long track record of high-performing creative businesses and is breaking down silos, prioritizing investment and maintaining the quality audiences expect from Disney. In about six weeks, we've centralized television programming within Disney Entertainment DTC, programming for Disney+ and Hulu while being smart about windows to linear to expand reach and maximize monetization. We've also integrated our Games business into Disney Entertainment to cross-promote franchises and extend storytelling. Dana is ensuring that every content decision, from development through distribution, is optimized for the fan and for the long-term strength of our brands.

Okay. A question from Jason Bazinet at Citi. I think this is also for you, Josh. Does Disney believe there is a secular shift towards short-form and user-generated content? If so, how can Disney capitalize on this shift?

Does Disney believe there is a secular shift towards short-form and user-generated content? If so, how can Disney capitalize on this shift?

Thanks, Jason. The short answer is yes. Short-form and creative content have exploded, and we're leaning into it because our fans want to engage with our brands and characters in new ways, especially Gen Alpha. We're experimenting with short-form content in a variety of ways. For example, our Creators Collection initiative brought creator-led videos to our streaming platforms. We'll continue that work. We're focused on ensuring our IP shows up in relevant ways across social platforms — short-form video, music videos, podcasts and more. We're adjusting our own products to reflect how consumers want to interact with our content: we recently introduced vertical video on Disney+, which is still early but already driving deeper engagement. We saw similar promising early performance with ESPN Verts. Across platforms and social, we're trying to meet fans where they are in ways that make sense to them.

Okay. Thank you. Question on the NFL for Hugh. This is from David Karnovsky from JPMorgan. The NFL appears intent on reopening media rights deals, given Disney and ESPN have guaranteed programming through the 2030 season. How do you weigh the opportunity to engage with the league now versus sitting on your existing deal until the opt-outs?

The NFL appears intent on reopening media rights deals, given Disney and ESPN have guaranteed programming through the 2030 season. How do you weigh the opportunity to engage with the league now versus sitting on your existing deal until the opt-outs?

Thanks, David. Our relationship with the NFL is as broad and deep as it's ever been, and we're excited about the upcoming NFL season with NFL Network and RedZone now part of our distribution portfolio on top of Monday Night Football and broader NFL coverage. We haven't yet engaged with the league on early renewal conversations. We're not dogmatic about the process and are always willing to have a conversation with the NFL to find new opportunities for growth. We expect to be in business with the league for years to come and will evaluate any deal with discipline and a focus on driving value for Disney shareholders. We're looking forward to our year of the Super Bowl and all it can bring to fans and Disney shareholders in the coming year.

Okay. Our next topic: we have two questions on technology. This is from Robert Fishman from MoffettNathanson directed to you, Josh. Given your second priority of embracing technology, should investors expect to see any differences in the way technology is already being used at the company and across your streaming services? Are there specific improvements or metrics like higher Disney+ engagement that we should use to judge success?

Given your second priority of embracing technology, should investors expect to see any differences in the way technology is already being used at the company and across your streaming services? Are there specific improvements or metrics like higher Disney+ engagement that we should use to judge success?

Thanks, Robert. Embracing emerging technologies is one of the priorities we laid out. That focus spans internal operations and customer-facing areas across each business segment. In visible terms, you'll see a greater level of interactive entertainment for Disney+ subscribers and more personalized content feeds across our streaming services. That personalization effort is already starting — an example is SportsCenter for You, which is like a personalized SportsCenter curated around the teams and sports most interesting to you. The goal is to drive higher engagement, which supports greater retention and ultimately benefits the bottom line.

And then we have a question also on technology from Laura Martin at Needham. Where is Disney integrating generative AI to lower costs and/or accelerate revenue growth today? What's on the roadmap to keep growing AI benefits to Disney shareholders?

Where is Disney integrating generative AI to lower costs and/or accelerate revenue growth today? What's on the roadmap to keep growing AI benefits to Disney shareholders?

Laura, we see advanced technologies, including AI, as a meaningful long-term opportunity for Disney. We're committed to implementing AI in ways that keep human creativity at the center and respect creators and our intellectual property. Three areas of opportunity: First, using technology to enhance creativity and production processes — continuing a legacy from synchronized sound through Pixar's advances and even The Mandalorian. That can make production more efficient and increase the volume of content we produce. Second, in streaming, we're developing a hyper-personalized recommendation engine across Disney+ and ESPN and implementing AI to enhance ad targeting capabilities for dynamic brand messaging. Third, on Experiences, AI can make it easier for families to plan their trips, optimize their time with us and personalize the guest experience. There's a lot going on across these areas.

I'll add a couple of points on workforce productivity and enterprise operations. One initiative I'm particularly interested in is implementing precision labor demand forecasting across our theme parks. We think that can create a better guest experience, a better employment experience and better cost management. Across the enterprise, there are numerous pathways to drive efficiency and reduce costs. Lastly, we see our Experiences business as well-positioned structurally in a world of AI-driven content; it may increase the value consumers place on authentic real-life experiences that we deliver every day.

Great. We're going to now take two questions on the portfolio of assets at the Walt Disney Company. These are for Hugh. First, from Robert Fishman at MoffettNathanson: How do you view the importance of ESPN and linear networks through the lens of your priorities to drive creativity, quality and global scale at the company?

How do you view the importance of ESPN and linear networks through the lens of your priorities to drive creativity, quality and global scale at the company?

Good question. Let me address linear entertainment cable networks first. Think of these networks as brands with studios that produce content which we monetize across multiple distribution platforms. Separating monetization platforms into discrete businesses is highly complex and unlikely to create incremental value for shareholders, especially given today's valuations. Second, we're managing a monetization transition of these brands and are far along that migration path. We're generating more revenue at Disney Entertainment in streaming than in linear — more than double in this most recent quarter. The linear earnings base is becoming smaller every quarter within our P&L. Finally, while linear revenues are declining, Disney Entertainment as a segment is growing nicely and our guidance continues for double-digit segment operating income growth this fiscal year, excluding the 53rd week. Turning to sports, ABC is strategically connected to ESPN and sports generally. Sports is earlier in its monetization transition, having launched ESPN+ last year, and other streaming competitors are increasing their position in live sports. Sports rights are expensive and can be dilutive without scale, but we have scale in the U.S. and the biggest sports media brand in the world in ESPN. We view sports as a key part of our programming strategy and ESPN as an important contributor to our distribution portfolio. We have to continue to manage the economic transition for ESPN while better leveraging it for our overall business, and as we do so, we'll continue to deliver healthy consolidated earnings growth for shareholders. Regarding capital allocation, we're always assessing our portfolio to maximize shareholder value and will continue to do so.

Next question on the portfolio from Mike Morris at Guggenheim: Can you expand on the One Disney strength as it relates to your sports businesses and general entertainment assets? Specifically, how do those businesses fit into a Disney-focused paradigm that is strong across both entertainment and experiences? Are there any elements of the company that you would consider noncore in the context of One Disney?

Can you expand on the One Disney strength as it relates to your sports businesses and general entertainment assets? Specifically, how do those businesses fit into a Disney-focused paradigm that is strong across both entertainment and experiences? Are there any elements of the company that you would consider noncore in the context of One Disney?

One Disney is more than a headline. It's how we create, distribute, engage and monetize our stories and brands across the company to increase lifetime value and drive compounding returns for our bottom line and shareholders. It's also about operating less as a portfolio of assets and more as a set of connected businesses focused on the fan with an enterprise-wide lens on engagement and lifetime value. The entertainment networks are brands with studios that produce content we distribute across our platforms to increase reach and engagement. ESPN is the biggest sports media brand in the world and now includes more NFL content than ever, accessible across all distribution platforms. On noncore assets, we're always evaluating the merits of our brands, organizational structure and business priorities to deliver long-term value. If a compelling case exists to consider strategic alternatives for noncore assets, you can reasonably conclude we've looked at it and will continue to do so as the marketplace and our businesses evolve.

And then moving to a question from Steven Cahall at Wells Fargo on efficiency. It appears that one of the early initiatives is to increase efficiency, including some recently announced workforce reductions. How big is the opportunity as you take a fresh look at the operations, where is the most room for improvement? And should we think about efficiency gains as falling to the bottom line or being reinvested into areas of growth like content and technology spend?

How big is the opportunity as you take a fresh look at operations? Where is the most room for improvement? Should we think about efficiency gains as falling to the bottom line or being reinvested into areas of growth like content and technology spend?

These are difficult exercises but an important focus for the organization. We're working to drive efficiency and rightsize the company for the state of the business today and where we want to go. Second, we're shifting more of our expense base into areas we expect to drive growth, such as content and technology. The recent staff reductions cited are part of our push to unify enterprise marketing and reflect a deliberate shift toward a more agile, technologically enabled and resilient workforce. We won't size the opportunity or rank-order areas because this is an ongoing exercise and a muscle we're building. We want a culture of efficiency and to fund growth from within the existing expense base. Across the company, we're aligning structures, capabilities and talent to what the business needs next, simplifying where we can and investing where it matters most. We're using technology to fundamentally change how work gets done and will continue to look for opportunities to redeploy capital, both financial and human, to areas that drive the highest returns for shareholders.

Okay. With time for two more questions, focused on our second quarter results and outlook. First, from David Karnovsky from JPMorgan, on the sports operating income guidance now mid-single digits, which includes the NFL Network transaction. Can you help quantify if the change from the prior commentary of up low single digits is all NFL Network? And any comment on what drove the stronger second quarter sports results versus guidance?

On the sports operating income guidance now mid-single digits, which includes the NFL Network transaction, can you help quantify if the change from the prior commentary of up low single digits is all NFL Network? And what drove the stronger second quarter sports results versus guidance?

As a reminder, the prior guidance of low single-digit increase was before the NFL transaction. So yes, the primary change is incorporating the NFL transaction. Regarding the quarter, sports operating income in Q2 came in a little better than expected because revenues came in slightly ahead and programming fees were slightly under — small variances to each.

David also asked: is there any additional detail you can give around the 53rd week impact by segment?

The 53rd week impacts all of our segments to a degree. Think about it as roughly a 1.5% or a little less than 2% benefit on full-year revenues, with some modest margin uplift given fixed costs that are accrued over the course of the year. Overall, it delivers about a 4% benefit.

And then lastly on the park side, what drove the better-than-expected top line, which was up 6% relative to the guidance we provided? Any indicators that give you confidence on domestic attendance or international parks and the macro impact to consider?

The outperformance came from core Park revenue and was broad-based: admissions were stronger, food and beverage and merchandise all came in a little stronger than expected. So the top line came in nicely. Right now, we're not seeing any macro weakness to point to, including at international parks, and we also have the benefit of the Paris World of Frozen opening, so we feel very good there.

Okay. And then our last question is coming from John Hodulik from UBS. John asked about the cadence of SVOD entertainment margins now that we've hit double digits here in the second quarter.

What's the cadence of SVOD entertainment margins now that you've hit double digits in the second quarter?

Thanks, John. We're proud to hit double digits this quarter. We're focused on driving top-line growth and we're investing as well. We want to continue to grow this business profitably and maximize what Disney+ can be for the company over time. We had previously talked about accelerating revenue growth, and we're pleased that we've been able to do so.

Great. That's all the time we have this morning. Thank you for your time. To close this out, I'm going to hand it over to Josh.

Thanks, Ben, and thanks, everyone, for your time this morning. We realized that we packed a lot of information into a new format, both on the call and in the letter. With this being my first earnings call as CEO, we felt it was important to spend extra time laying out our strategy and taking your questions. We also felt it was important to discuss our results with more of a unified approach rather than focusing on individual segments. I'll conclude by saying that I look forward to engaging with the investment community and our shareholders in the future, including on our fiscal Q3 earnings call in August. Thanks for joining today, everybody.