Netflix reported a decent performance for the second quarter of the year – in its report, the streaming service giant revealed that it has clocked a 16% increase in revenue. The streaming service revised its full-year revenue outlook upward, now projecting a range between $44.8 billion and $45.2 billion. This updated forecast surpasses the prior guidance of $43.5 billion to $44.5 billion. The streaming service added that its members accumulated over 95 billion hours of content viewing during the first half of the year, marking a 1% increase from the prior year.
For the three-month period concluding in June, Netflix reported diluted earnings per share (EPS) of $7.19, a figure that exceeded the $7.08 consensus estimate from analysts compiled by LSEG. Overall, the total revenue for the period amounted to $11.08 billion, barely moving past analyst estimates of $11.07 billion. Net income during this timeframe was $3.1 billion, equivalent to $7.19 per share. This represents a considerable rise from the $2.1 billion, or $4.88 per share, recorded in the comparable quarter of the preceding year.
The $11.08 billion in revenue for the second quarter marked an approximately 16% year-over-year expansion. Furthermore, the company stated that net cash generated from operational activities for the quarter stood at $2.4 billion, reflecting an increase exceeding 84% from the prior-year period. Free cash flow also demonstrated substantial growth, reaching $2.3 billion, an expansion of 91%. As a result, Netflix elevated its full-year free cash flow guidance to between $8 billion and $8.5 billion, up from an earlier estimate of around $8 billion.
Netflix highlighted its second-quarter operating margin of 34.1%. This metric marks a growth of nearly 3 percentage points from the previous quarter and almost 7 percentage points from the same period a year ago. However, the company cautioned that operating margin for the latter half of 2025 is expected to be compressed relative to the first half. This anticipated shift is linked to elevated content amortization costs and increased sales and marketing expenditures, driven by a more concentrated content release schedule in the second half of the year. Following the earnings announcement, Netflix’s stock experienced a drop of around 1% in extended trading sessions. Its shares are currently priced at $1,274.17.
The next two quarters are set to be a busy one for the streaming giant – the forthcoming content lineup includes the likes of “Wednesday” (Season 2), the final season of “Stranger Things,” the feature film “Happy Gilmore 2,” as well as Guillermo del Toro’s “Frankenstein.”
This quarter represented the second consecutive instance where Netflix did not publicly release its quarterly subscriber additions. The company has instead pivoted to emphasizing broader financial indicators, such as revenue and profitability, as primary measures of success. In its official communication, Netflix clarified that its 16% revenue increase was primarily influenced by an expanding global member base, adjustments to subscription rates, and growing income from advertising.
Netflix’s updated full-year revenue expectation of up to $45.2 billion is coupled with a revised operating margin target of 29.5% on an FX neutral basis, translating to approximately 30% on a reported basis. This revised margin target represents an increase from the earlier 29% forecast. The company also forecasts net income for the entire year to surpass $10 billion for the first time. The advertising-supported subscription tier, which saw its price adjusted to $7.99 per month in January, now commands over 94 million monthly active subscribers globally (as of May). This tier accounts for more than 50% of new sign-ups in the markets where it is available. Netflix projects that its advertising revenue will approximately double during the course of the year. The company announced the full deployment of its proprietary ad technology platform, the Netflix Ads Suite, across all its advertising markets.