Disney said in its fiscal Q1 earnings report on Tuesday that its new streaming service, Disney+, had 26.5 million paying subscribers during the quarter. CEO Bob Iger said on the company's earnings call that, by Monday, that number had climbed to 28.6 million subscribers.
The company announced in November that Disney+ had picked up 10 million subscribers within a day after it launched. Tuesday's report is the first subscriber update since then.
Iger told Julia Boorstin on CNBC's "Closing Bell" on Tuesday that "about 20%" of the 26.5 million subscribers came through a distribution partnership with Verizon that offered a free year of Disney+ to some Verizon customers. But there's no guarantee that customers who got Disney+ through free trials will resubscribe as paying customers once the trial is up.
Disney also did not update its guidance for the service. The company previously forecast between 60 million and 90 million subscribers by the end of its 2024 fiscal year.
Much of the service's subscriber growth was likely driven by its flagship show, "The Mandalorian," but the show's first season ended in December. Iger said on the company's conference call that "both conversion from free to pay and churn rate were better than we expected." Churn refers to the pace at which users sign up for and cancel subscriptions.
Here's a breakdown of Disney's average revenue per user for Disney+ and its other streaming services:
And here's how Disney+ stacks up against competitors:
Shares of Disney were up about 1% after hours.
Disney's primary rival, Netflix, said in its earnings report last month that it has more than 67 million subscribers across the U.S. and Canada. However, it also reported lower-than-expected U.S. subscriber additions for the quarter, which may indicate the streaming incumbent is feeling the pressure from competitors such as Disney+.
The news also comes after Apple declined to release subscriber numbers for its new streaming service, Apple TV+, in its quarterly earnings report last week.
The sector will only become more competitive as the streaming wars continue to heat up. Apple's streaming service, Apple TV+, rolled out in November of last year. In the coming months, AT&T's WarnerMedia will launch HBO Max, and Comcast's NBCUniversal will roll out Peacock in April.
Disney+ initially launched in the U.S., Canada, Australia, New Zealand and the Netherlands. It will roll out across other parts of Europe on March 24, the company said last month. It will launch in Latin America in October.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.