Disney's new CEO explains the 3 pillars of his growth strategy, as the company beats earnings estimates

• Disney topped Wall Street's estimates in its latest quarter.
• New CEO Josh D'Amaro laid out the three pillars of his growth strategy in a shareholder letter.
• D'Amaro has faced several unexpected challenges since replacing Bob Iger.

Josh D'Amaro's Disney just exceeded expectations after a hectic few weeks.

Disney's revenue grew 7% to $25.2 billion in its quarter ending March 28, the company said on Wednesday morning, above the $24.87 billion estimate from analysts polled by Bloomberg.

Adjusted earnings per share rose 8% to $1.57 per share compared to Wall Street's consensus estimate of $1.51 per share.

Shares rose over 4% in pre-market trading.

D'Amaro, who took over for longtime CEO Bob Iger in mid-March, wrote in a letter to shareholders — also signed by CFO Hugh Johnston — that the company is "executing aligned to a long-term strategy built on three pillars."

Here are the pillars:

1. Investing in IP and creativity that breaks through, builds connections, and endures
2. Reaching more consumers in more seamless, engaging ways around the world
3. Using advanced technologies to power our storytelling and increase monetization and returns

"We are strengthening streaming through continued investment in the creative storytelling that defines us and in product and technology innovation, while advancing ESPN's direct-to-consumer future, and delivering on our bold growth plans at Disney Experiences," D'Amaro wrote.

Entertainment revenue rose 10% to $11.72 billion in the quarter, topping analysts' estimates for $11.4 billion, thanks to 14% growth from subscriptions and affiliate fees.

D'Amaro put a heavy emphasis on streaming in the letter and said the company's goal is to make Disney+ "more engaging, more personalized, and more central to how fans experience our brands."

Revenue for the experiences division that D'Amaro used to run — which includes parks, cruises, and products — climbed 7% and slightly exceeded the expected figure of about $9.4 billion.

The sports segment, anchored by ESPN and its revamped app, saw revenue tick up 2%, to just above the $4.59 billion estimate.

Disney's stock is up 8.7% from its late-March low but is down about 45% in the last five years and has barely budged in the last decade.

D'Amaro's honeymoon didn't last long

It's been an eventful few weeks at the Mouse House.

Less than a month after D'Amaro took the top job, Disney announced a major round of layoffs. The mid-April reorg hit marketing teams especially hard. Laid-off employees were given severance pay based on their level and tenure, Business Insider reported.

The Mouse House is also contending with the FCC, which ordered an unusual early renewal of ABC's broadcast licenses — days after late-night host Jimmy Kimmel made a joke about Melania Trump that provoked the anger of the first lady and President Trump.

Another curveball came when OpenAI canceled its Disney deal, which would have put AI-generated videos on Disney+ and given employees access to the enterprise version of ChatGPT. Disney ended up putting short-form vertical clips on its flagship streamer anyway, as have rivals Paramount+, Peacock, and Netflix.

"We continue to explore potential commercial opportunities with OpenAI and others," D'Amaro wrote in the letter.

And in D'Amaro's first week as CEO, the company shelved the debut of one of its biggest shows, "The Bachelorette," after a controversy around star Taylor Frankie Paul.

Embracing AI and tech

The Mouse House has been encouraging employees to use AI and has created an "AI Adoption Dashboard," Business Insider reported. Some staffers are using chatbots tens of thousands of times per month, and some who don't use AI have gotten check-in messages from their higher-ups.

AI is likely to be a key part of the "advanced technologies" D'Amaro referenced that can help drive the company's "storytelling and increase monetization and returns."

Within streaming, D'Amaro said Disney is investing in content, tech, and marketing, adding that the company has "a robust product pipeline aimed at increasing engagement and frequency of use."

Disney has also shaken up its streaming commerce and data teams after the departure of Ajay Arora, formerly the SVP of product management and engineering, Business Insider reported.

Another change is Disney's recent decision to cut stock-based compensation for some tech staffers, Business Insider reported.