Following the company’s first-quarter earnings that exceeded both top and bottom line projections and reaffirmed full-year revenue forecasts, Netflix’s shares increased during Thursday’s after-hours trade.
Netflix executives defended with confidence the streaming service’s revenue forecast for the year on Thursday and expressed confidence that it would withstand any economic disruption brought on by President Donald Trump’s unpredictable tariff proposals.
Netflix co-CEO Greg Peters stated that the company had not observed any notable changes in customer behavior after an earnings report that exceeded analyst expectations. This statement is likely to allay Wall Street’s fears that Trump’s policies would cause recently frugal consumers to rethink their spending on streaming services.
In the first quarter, Netflix reported $10.54 billion in revenue, a 13% year-over-year increase and a beat over the $10.50 billion expert forecast from Bloomberg. The business had projected $10.42 billion.
Analyst projections of $5.68 were surpassed by earnings per share of $6.61. After posting $5.28 in the previous year, the company’s first quarter profits were predicted to be $5.58.
The business predicted Q2 sales of $11.04 billion, more than the $10.88 billion analysts surveyed by Bloomberg had predicted, and pointed to revenue for the current quarter above Wall Street projections.
The business reaffirmed its earlier prediction of sales growth of $43.5 billion to $44.5 billion and operating margins of 29% for the full year 2025.
The findings coincide with the company’s present ranking among the top Big Tech companies in an unpredictable economic climate that is fuelled by President Trump’s trade war.
When compared to its larger tech counterparts, such as Apple, Amazon, and Alphabet, who have had year-to-date falls of 17% or more, Netflix’s stock was up 9.2% this year as of Thursday’s closing. In 2025, the S&P 500 is down around 10%. After-hours trading saw a 2.7% increase in Netflix shares.
In the earnings statement, Netflix management stated, “We are off to a good start in 2025,” attributing its success to “slightly higher subscription and ad revenue.”
With more than 300 million members worldwide, Netflix has been growing its membership base in many areas since its late 2022 launch as users have gravitated toward its more affordable, ad-supported tier.
Peters pointed out that throughout past economic downturns, the entertainment industry—and Netflix in particular—had shown resilience. “We really do expect the demand to remain strong,” he stated.
The company’s less expensive solutions should also be beneficial, he noted. According to the firm, 55% of new sign-ups in the nations where it is available came from the ad-supported tier.
As the business works to increase engagement and boost its top line, with a particular focus on growing its global presence, Thursday also marked Netflix’s first report without membership statistics.
The firm has 301.6 million members worldwide by the end of 2024. In its letter to shareholders for the fourth quarter, Netflix stated that it will reveal subscriber figures going forward “as we cross key milestones.” Last year, the business added 41 million users worldwide.
The Wall Street Journal claims that Netflix has set ambitious financial targets, such as tripling its sales by 2030 and achieving a $1 trillion valuation. Right now, the streamer’s market value is little over $400 billion.
Ted Sarandos, co-CEO of Netflix, responded directly to the Journal’s claim during the results call: “We discuss long-term goals in our frequent internal meetings. However, it’s crucial to remember that this is not the same as a forecast.
“Our operating plans are the same as our external forecast and guidance,” he said. “Neither a five-year projection nor five-year advice are available. However, you may presume that we have long-term goals in mind and that we put forth great effort each day to create the most cherished and esteemed entertainment business for all of our stakeholders.”
The firm anticipates subscriber growth from its content portfolio, with its ad tier acting as a longer-term stimulus for attracting new users. Crackdowns on password sharing helped boost its subscriber numbers, though the advantages of such crackdowns are anticipated to diminish in the near future.
In the US, the firm increased the cost of subscriptions for all of its streaming tiers earlier this year, including the ad plan, which is still among the least expensive at $7.99 a month.
In the earnings statement, Netflix stated, “The recent pricing adjustments we made in large markets (including the US, UK, and Argentina) have performed in line with our expectations.”
The business declared on Thursday that it will begin hiking prices in France today.
Netflix also disclosed in the announcement that Reed Hastings, the streaming giant’s co-founder and former CEO, has moved from executive chairman to chairman and non-executive director of the firm by resigning as executive chairman to take a non-executive chair position on the board, citing this as “part of the natural evolution of our leadership structure and succession planning.”
“In difficult economies, home entertainment value is really important to consumer households,” said Sarandos, “and Netflix is a tremendous value in absolute terms and certainly in competitive terms.”
The business predicted that its sales for April through June will surpass the expert estimate of $10.90 billion, reaching $11.04 billion.
Netflix reiterated its $14.5 billion to $43.5 billion revenue prediction for the year, “which assumes healthy member growth, higher subscription pricing, and a rough doubling of our ad revenue.”
According to figures provided by LSEG, Netflix reported revenue of $10.54 billion for the first quarter, slightly above analysts’ projections of $10.52 billion.
According to Netflix, its operating profitability and revenue exceeded its own projections “due to slightly higher subscription and ad revenue and the timing of expenses.” The report stated that the revenue from advertising was “still very small relative to subscription revenue.”
According to Paolo Pescatore, a PP Foresight analyst, Netflix is well-positioned to weather a downturn.
“In the lives of its consumers, Netflix is an essential service. Given the depth and variety of content, it will be the final subscription that people cancel,” Pescatore stated.
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