Netflix shows confidence in its revenue outlook and subscriber growth despite global uncertainty.
Netflix Stock Rises After Strong Earnings Report
Netflix’s shares went up by 2.7% in after-hours trading after the company reported better-than-expected earnings. This performance has outshined the broader S&P 500, which is down 10% this year. Meanwhile, Netflix stock has risen by 9%.
No Major Impact From Trump’s Economic Policies
Co-CEO Greg Peters said that Netflix hasn’t seen any big changes in how users behave, even with concerns about President Donald Trump’s tariff policies. This statement helped ease Wall Street worries about people cutting down on streaming subscriptions.
Ad-Supported Tier Boosts Subscriber Growth
Netflix’s low-cost, ad-supported plan is working well. Since it launched in late 2022, it has attracted many new users. In countries where this tier is available, it accounted for 55% of new sign-ups. Peters believes the affordable options will keep demand strong, even if the economy slows down.
Streaming Remains a Valuable Option During Tough Times
Ted Sarandos, Netflix’s co-CEO, said the company is focused on adding value. He highlighted that entertainment at home becomes even more important when people are saving money. Netflix remains a cost-effective choice for families compared to other entertainment options.
Reed Hastings Steps Back, Becomes Non-Executive Chair
Netflix also announced a leadership update. Co-founder Reed Hastings has stepped down from his role as executive chairman and will now serve as the board’s non-executive chair. This move is part of the company’s long-term leadership plan.
Strong Revenue Forecast for Q2 and the Full Year
Netflix expects revenue of $11.04 billion for the April–June quarter, which is higher than analysts’ forecast of $10.90 billion. For the full year, Netflix maintained its forecast of $43.5 billion to $44.5 billion in revenue. This estimate is based on steady member growth, increased subscription pricing, and a doubling of ad revenue.
Q1 Results: Big Earnings and Popular Shows
In the first quarter of 2025, Netflix earned $10.54 billion, just above the expected $10.52 billion. Earnings per share hit $6.61, beating the $5.71 estimate. Some of the major shows this quarter were the limited series Adolescence, the thriller Zero Day, and the reality series Temptation Island.
Advertising Still Small, But Growing
While Netflix‘s ad revenue is still small compared to what it earns from subscriptions, it is starting to grow. The company also mentioned that its revenue and operating income surpassed expectations due to slightly higher ad and subscription income, along with expense timing.
Netflix Remains a Must-Have for Viewers
Analyst Paolo Pescatore said that Netflix is well-positioned, even if a recession hits. He believes people will cancel other subscriptions before Netflix because of its wide range of content. In his words, “Netflix is an indispensable service in users’ lives.”
