Netflix’s Financial Results Beat Estimates As Sales Grow 16%

Netflix (NFLX) has reported second-quarter financial results that surpassed Wall Street estimates as the company’s revenue grew 16% year-over-year. The movie and TV streaming service announced earnings per share (EPS) of $7.19 U.S., which topped the $7.08 U.S. consensus expectation of analysts.Revenue in the period totaled $11.08 billion U.S., which was slightly ahead of the $11.07 billion U.S. achieved in the same period of 2024. Sales were up 16% from a year earlier. Management attributed the decent print to more members, higher subscription pricing, and increased revenue from advertisements on the streaming platform. However, it should be noted that Netflix no longer releases updates on its subscriptions and whether they rose or fell during a quarter. Still, the company said that its net cash generated from operating activities during Q2 of this year was $2.4 billion U.S., up more than 84% from the previous year. Free cash flow also rose, reaching $2.3 billion U.S., a 91% year-over-year increase. Netflix also reported a Q2 operating margin of 34%, an improvement of nearly three percentage points from the previous quarter and nearly seven percentage points higher than a year earlier.In terms of guidance, Netflix said that it expects full-year revenue of $44.8 billion U.S. to $45.2 billion U.S., up from a previous range of $43.5 billion U.S. to $44.5 billion U.S.Netflix said the higher forecast reflects the weakening of the U.S. dollar compared with other currencies as well as strong membership growth and ad sales.Management also increased their full-year free cash-flow guidance to between $8 billion U.S. and $8.5 billion U.S., up from $8 billion U.S. previously.However, senior executives warned that “operating margin in the second half of 2025 will be lower than the first half due to higher content amortization and sales and marketing costs.” Netflix is rolling out expensively produced content throughout the rest of this year, including the final season of “Stranger Things,” and movies “Happy Gilmore 2” and “Frankenstein.”NFLX stock is down 2% after the company’s Q2 print. So far in 2025, the share price has gained 44% to trade at $1,274.17 U.S. per share.