Toy Story 5 Reaches For the Sky

**Jon Quast** (0:02)
Box office results for Reaching for the Sky. You're listening to Motley Fool Hidden Gems Investing.
Welcome to Motley Fool Hidden Gems Investing. Today, we're going to talk about some data center news that we have also taking a question from our mailbag. But first, we need to talk about Toy Story 5 coming out over the weekend, and it was not falling with style. It was flying. This movie was incredibly well-received, and I think it's going to be one of the best movies that we've ever seen. Matt, Rachel, I have to be honest with you here as I think about this. I thought Toy Story 3 was the perfect ending for that franchise. I really did. I did not like Toy Story 4 I can't imagine myself going out and seeing Toy Story 5 A lot of movies at the box office these days, I'm not really a huge fan of. I'll wait till it comes out on streaming, but I think I'm alone there because the results are telling a different story.

**Rachel Warren** (0:53)
Yeah, it's actually been pretty incredible. Massive win for Disney. So Toy Story 5 shattered expectations. They had a stunning $160 million domestic opening weekend. That's the single biggest debut of 2026 so far. If you look globally for opening weekend, the film raked in about $312 million. So definitely a sign that Pixar's legacy intellectual properties are still commanding really exceptional pricing power and audience draw in a really crowded media landscape. I think another point to bake here as well, like we're seeing really the box office is back in 2026 We're seeing this on track to be the highest grossing theatrical year of the post-pandemic era. There was a report that came out from Gower Street Analytics. They revised their global box office projections upward to just under $35 billion. That's up 16% from 2024 And we're seeing this across a variety of popular franchises. You had the Super Mario Galaxy movie cross the billion dollar milestone. You had Lionsgate's Michael closing in over $900 million.
So we're seeing that sustained traffic. I think it's showing that theatrical distribution is reestablishing itself. We're seeing a real core driver of entertainment economics with some of these releases. So pretty exciting if you follow this space.

**Matt Frankel** (2:03)
Yeah, and I'll just add a little bit more context here. So as Rachel mentioned, this is the best year for the box office since before the COVID pandemic. And it's not just Toy Story. Some of the other franchises have outperformed expectations. The Devil Wears Prada 2 is another recent one. It isn't just because inflation is making ticket prices higher either. That's what a lot of people kind of push back with. Okay, if movies cost 10% more, isn't that just what's driving revenue? The number of tickets sold is actually up 7% compared to this point last year. So bigger audiences as well as just more money per ticket. Rachel mentioned the global numbers, but domestically $10 billion in box office revenue, which is now what they're expecting. And that's up from 8.9 million in the best post pandemic year so far, which was 2023 We're now within striking distance of the pre-pandemic highs of the late 2010s, which were in the $11 billion range. So really good year so far.

**Jon Quast** (2:52)
Yeah. And I think that that really bucks the narrative that I've been hearing about, that the box office is pretty much dead. And I like that you pointed out the ticket sales themselves because we do have to adjust for inflation to make sure that we're comparing apples to apples. And so actually, yeah, more people going to the movie theater. I don't think that a lot of people who are sitting on the sidelines really expected that to happen. And I know that Toy Story 5, the results it's putting up are somewhat of a surprise. And so that leads us to our next little topic here as we discuss this. What are some of the winners in a box office market that is seeing this resurgence of interest from audiences?

**Rachel Warren** (3:30)
Yeah, I mean, there's a few ways to look at this, obviously. And I'm sure Matt and I both have thoughts on this. Disney is sort of the most direct operational winner here. And when you see a theatrical event like Toy Story 5, obviously they're not just making money on ticket sales. There's the downstream effects for theme parks, consumer merchandise sales, a lot of long-term benefits there. But I mean, to think of a sort of a counterplay to this entire trend, you can think about Netflix. They were toying with this massive multi-billion dollar distribution footprint during their pursuit of Warner Brothers, ultimately backed out. We've heard CEO Ted Sarandos explicitly state that building this massive theatrical distribution engine is not something that is a priority for them. And they've really remained keen on keeping their films out of traditional theater. So they've bypassed that volatile box office space with their high margin streaming subscription and rapidly expanding ad models. That's sort of a counterplay, but if you're wanting to benefit from the tailwinds for entertainment spend. One other kind of interesting company to mention here is Apple. You think about, not to have too many spoilers here, but the thematic core of Toy Story 5, the toys are facing a major crisis because Bonnie's obsessed with her new digital tablet and it actually mirrors the real world consumer discretionary spend trends we're seeing. Apple very much bridges that gap. People are leaving the house for entertainment, but they are consolidating their digital spend into premium devices. So Apple is another kind of interesting way to look at this.