The streamer saw earnings jump 25% in the first quarter.
Netflix (NASDAQ:NFLX) is showing no signs of slowing down as the leading streaming service reported strong first quarter results.
Netflix topped revenue and earnings estimates in the quarter, and projects continued growth in the second quarter.
The company generated $10.54 billion in revenue in the quarter, a 12.5% year-over-year jump. The numbers came in higher than estimates of $10.52 billion.
Net income rose 24% year over year to $2.89 billion, while earnings climbed 25% to $6.61 per share. This was far better than analysts’ estimates of $5.71 per share.
The streamer was buoyed by some major hits in the quarter, including the show Adolescence and the films Back in Action, Counterattack, and Ad Vitam, all of which broke into the top 10 in various different categories.
Adolescence was a top 3 all-time most streamed show with $124 million views, while Back in Action was the sixth most popular English language film ever with 146 million views. Ad Vitam from France was the sixth most popular non-English language film with 63 million views, while Counterattack from Mexico was the 10th most popular non-English language film with 59 million views.
“We believe this steady drumbeat of must-see entertainment is what allows us to capture our members’ attention and, in return, delight them every time they visit Netflix,” management wrote in the Q1 shareholder letter.
Netflix did not disclose subscriber data this quarter for the first time, as part of a new strategy to put the focus on revenue and earnings growth. But management said revenue was fueled by higher-than-forecasted subscription and ad revenue.
Q2 outlook calls for 15% growth
In the second quarter, Netflix is calling for revenue of $11.03 billion, which would represent growth of about 15% as it experiences the full benefit from recent price changes, along with continued growth in membership and advertising revenue.
Further, it projects the operating margin to be 33%, which would be a six percentage point improvement year-over-year.
For the full year, Netflix maintains its revenue forecast of $43.5 billion to $44.5 billion, up from about $39 billion in 2024. This assumes robust membership growth, higher subscription pricing and a doubling of ad revenue. Currently, the company is tracking above the mid-point of its 2025 revenue guidance range.
On the earnings call with analysts, co-CEO Greg Peters discussed the company’s ability to weather choppy markets.
“Netflix specifically also has been generally quite resilient, and we haven’t seen any major impacts during those tougher times, albeit, of course, over a much shorter history,” Peters said. “I think that having the low-cost ads plan in our largest markets also gives us more resilience. And we think that we represent an incredible entertainment value, starting at $7.99 in the U.S. and Canada with the ads plan. It’s an accessible price point, and we really do expect the demand for entertainment to remain strong.”
Co-CEO Ted Sarandos also addressed reports earlier this week that the company is looking to double revenue by 2030, citing an internal document. Sarandos said this was not a forecast and expressed disappointment that it leaked.
“On rare and very disappointing occasions, our confidential and internal discussions can leak into the press. And while we wouldn’t normally comment about leaked internal information, we do want to be extra clear about this. We often have internal meetings and we talk about long-term aspirations. But it’s important to note that this is not the same as forecast. Our operating plans is the same as our external forecast and guidance,” Sarandos said. “We don’t have a 5-year forecast or 5-year guidance. But you can assume that we are long-range thinking, and that we’re working hard every day to build the most loved and valued entertainment company for all of our stakeholders.”
Netflix has a median price target of $1,100 per share, which would suggest 13% growth. It has a P/E ratio of 45.
