- Netflix (NFLX) shares rose 2.64% to $998.70 in extended trading after reporting Q1 adjusted earnings of $6.61 per share on $10.54 billion in revenue, surpassing Wall Street’s estimates of $5.67 per share and $10.5 billion.
- The company maintained its 2025 revenue outlook of $43.5 billion to $44.5 billion and forecasted Q2 earnings of $7.03 per share on $11 billion in revenue, exceeding expectations of $6.25 per share and $10.9 billion.
- Despite economic uncertainties from tariff policies, Netflix’s 27% operating income growth to $3.3 billion, 31.7% margins, and a growing ad-tier plan enhance its resilience, with ad revenue expected to double in 2025.
Netflix (NFLX) shares surged 2.64% to $998.70 in extended trading on Thursday, buoyed by first-quarter results that surpassed Wall Street expectations, reporting adjusted earnings of $6.61 per share on revenue of $10.54 billion, compared to analyst forecasts of $5.67 per share and $10.5 billion. The company’s robust performance, highlighted by a 27% year-over-year increase in operating income to $3.3 billion and operating margins of 31.7%, reflects its ability to navigate economic uncertainties, including the impact of President Trump’s tariff policies, which have raised concerns about inflation and consumer spending. Netflix’s decision to raise prices for many global customers in the quarter contributed to its financial strength, while its lower-priced ad-tier plan offers a buffer against potential subscriber churn, as noted by Co-CEO Greg Peters in a post-earnings video interview.
Despite not disclosing an updated subscriber count, a shift from past practice when it reported a record 18.9 million paid subscription gains a quarter ago, Netflix’s management emphasized in a shareholder letter that both operating income and revenue exceeded expectations due to slightly higher subscription and ad revenue. Looking ahead, the company maintained its 2025 revenue guidance of $43.5 billion to $44.5 billion, signaling confidence in sustained growth despite global economic headwinds. For the second quarter, Netflix projected earnings of $7.03 per share on revenue of $11 billion, outpacing analyst expectations of $6.25 per share and $10.9 billion. Peters highlighted the historical resilience of entertainment during economic downturns, underscoring Netflix’s adaptability through its growing advertising revenue, which is expected to roughly double in 2025. While tariffs and potential advertising budget cuts pose risks, Netflix’s strategic pricing, diversified revenue streams, and strong content slate position it to maintain its dominance in the streaming industry.
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