Netflix Q2 2025 Earnings Beat Forecasts: Revenue Surges 16% as Streamer Raises Guidance
Solid Beat on Earnings and Revenue
For the quarter ended June 30, 2025, Netflix reported:
- Earnings per share (EPS): $7.19 vs. $7.08 expected
- Revenue: $11.08 billion vs. $11.07 billion expected
The company also reported net income of $3.1 billion, a sharp increase from $2.1 billion a year ago. Revenue increased by nearly 16% year over year, driven by robust global member additions, higher subscription pricing, and expanding advertising revenue.
Outlook Boosted
Netflix raised its full-year revenue guidance to between $44.8 billion and $45.2 billion, citing the weakening U.S. dollar as a tailwind along with strong operational performance. Full-year free cash flow is now expected between $8 billion and $8.5 billion, reflecting a 91% year-over-year increase in Q2 free cash flow alone.
Strong Operating Metrics
- Operating margin: 34.1% (up nearly 7 percentage points YoY)
- Net cash from operations: $2.4 billion (+84% YoY)
- Free cash flow: $2.3 billion (+91% YoY)
Despite these numbers, the company warned that operating margin will dip in the second half due to heavier content amortization and marketing spend linked to a packed release calendar, including:
- Stranger Things finale
- Wednesday Season 2
- Happy Gilmore 2
- Guillermo del Toro’s Frankenstein
- Live boxing match: Canelo Alvarez vs. Terence Crawford
Investor Reaction Mixed
Shares fell 1.4% in pre-market trading Friday, even as the broader S&P 500 looked poised to open higher. Analysts attribute the slight pullback to valuation concerns — Netflix is trading at roughly 44 times forward earnings, near a three-year high — and the fact that the earnings beat was partially aided by currency fluctuations rather than domestic acceleration.
Still, analysts remain optimistic:
- KeyBanc: Reiterated Overweight rating with a $1,390 price target
- Pivotal Research: Maintains Buy rating with a $1,600 Street-high target
Bottom Line
The Netflix Q2 2025 earnings report showcased a healthy business firing on multiple cylinders — subscriber growth, pricing power, global reach, and advertising — even if some investors found reasons for short-term caution. With new content poised to draw massive global attention in the coming months, Netflix continues to prove its resilience and adaptability in the evolving streaming landscape.