Netflix (NFLX) has reported a robust performance for the second quarter of 2025, posting an earnings beat with significant revenue growth. The streaming giant’s revenue surged by nearly 16% year-over-year, reaching $11.08 billion in Q2, which surpassed Wall Street’s estimates of $11.07 billion. This strong financial quarter also saw the company’s earnings per share (EPS) come in at $7.19, exceeding analyst expectations of $7.08.
The impressive revenue increase was primarily attributed to growth in member numbers, higher subscription pricing, and increased ad revenue. Building on this positive momentum, Netflix has updated its full-year revenue forecast, now expecting between $44.8 billion and $45.2 billion—an increase from the previous range of $43.5 billion to $44.5 billion. The company noted that this revised guidance reflects a weakening of the U.S. dollar, alongside continued “healthy” member growth and strong ad sales.
Financially, Netflix’s net income for the period rose to $3.1 billion, or $7.19 per share—a notable jump from $2.1 billion, or $4.88 per share, in the equivalent quarter a year prior. The company also demonstrated strong cash generation, with net cash from operating activities reaching $2.4 billion, an 84% increase from the previous year. Free cash flow also saw a significant boost, climbing 91% to $2.3 billion. Consequently, Netflix raised its full-year free cash flow guidance to between $8 billion and $8.5 billion.
Furthermore, the company highlighted a strong operating margin of 34.1% for the second quarter, marking an improvement of nearly 3 percentage points from the prior quarter and almost 7 percentage points year-over-year.
It is worth noting that, for the second consecutive quarter, Netflix opted not to release quarterly updates on subscription data. Despite the positive Q2 figures, the company issued a cautionary note, forecasting that its operating margin in the second half of 2025 would be lower than in the first half. This anticipated dip is due to higher content amortization and increased sales and marketing costs associated with a robust calendar of upcoming content. Major titles expected in the latter half of the year include the second season of Wednesday, the finale of Stranger Things, Happy Gilmore 2, and Guillermo del Toro’s Frankenstein.
This forward-looking warning likely contributed to a slight dip in shares, which fell approximately 1% in after-hours trading.
