Netflix surpassed expectations for key metrics in Q1, driven by higher-than-expected subscription and ad revenue.
The company reported $10.5 billion in revenue, a 12.5% year-over-year increase, and net income of $2.9 billion, up 24% and exceeding its $2.44 billion forecast. Operating margin improved to 31.7% from 28.1% a year ago, topping the projected 28.2%.
The streaming giant, featuring hits like Adolescence, Shonda Rhimes’ The Residence, and live WWE Raw broadcasts, anticipates stronger Q2 revenue growth due to recent price hikes, sustained membership growth, and increased ad revenue. Unlike many firms facing tariff-related challenges, Netflix benefits from families retaining in-home entertainment subscriptions during economic cutbacks.
This quarter, Netflix stopped reporting quarterly subscriber numbers and average revenue per member, shifting focus to revenue and profits. Revenue growth was partly fueled by membership increases, with the company ending Q4 with 301.6 million subscribers. Internally, Netflix aims to double revenue to $80 billion by 2030 and grow global ad sales to $9 billion, per The Wall Street Journal.
Netflix CEOs Ted Sarandos and Greg Peters addressed concerns over the Trump-imposed tariffs and a potential looming recession during the company’s first quarter earnings call, noting that as of right now they’re not seeing signs of any downturn in Netflix’s business.
“We’re paying close attention to the consumer sentiment and where the broader economy is moving, but based on what we are seeing by actually operating the business right now, there’s nothing really significant to note,” Peters said.
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