Netflix Inc (NASDAQ:NFLX) stock fell 4.84% (As on July 18, 11:20:41 AM UTC-4, Source: Google Finance) after the company reported results for the second quarter of 2025 that surpassed analyst expectations for revenue. The streaming giant also raised its full-year forecast. Operating margin for the second quarter stood at 34.1%, which is an improvement of nearly three percentage points from the prior quarter and over seven percentage points from the same quarter last year. In Q2, the company had a wide variety of hit series like Squid Game S3, Sirens, Ginny & Georgia S3, The Eternaut and Secrets We Keep, and popular films like Tyler Perry’s STRAW and Exterritorial. The company have completed the rollout of the Netflix Ads Suite, the proprietary first-party ad tech platform, across all the ads markets.
NFLX in the second quarter of FY25 has reported the adjusted earnings per share of $7.08, missing the analysts’ estimates for the adjusted earnings per share of $7.19. The company had reported the adjusted revenue growth of 16 percent to $11.08 billion in the second quarter of FY25, beating the analysts’ estimates for revenue of $11.07 billion. Netflix’s user growth in the US has slowed, according to market researcher Antenna. The company boosted its customer base for a couple of years by cracking down on password sharing. The benefits from that program have started to wane.
Looking ahead, Netflix issued upbeat guidance for the current quarter. The company expects revenue to hit $11.53 billion, topping analyst estimates of $11.28 billion. EPS is also projected to come in above expectations at $6.87 versus the $6.70 analysts had anticipated. For the full-year, Netflix now expects revenue to be between $44.8 billion and $45.2 billion, higher than the earlier projected range of $43.5 billion to $44.5 billion. The raised forecast is a combination of a weak US Dollar, healthy member growth and ad sales, according to a company statement. Net Income is likely to cross $10 billion for the first time on an annual basis, thanks to exchange rates that will boost sales and a strong slate of programs. The second-half schedule includes new seasons of the hit shows Stranger Things and Wednesday, as well as movies such as Happy Gilmore 2. The company expects ad revenue to roughly double to about $3 billion in 2025.
However, shares fell as much as 2% in extended trading after the management warned of lower operating margin in the second half of 2025, in comparison to the first half, due to higher content amortisation, along with higher sales and marketing costs, in proportion to an increased content slate during this period.