Netflix reported a robust second quarter in 2025, with revenue climbing 15.9% year-over-year to $11.08 billion, slightly exceeding Wall Street’s estimate of $11.07 billion.
The growth was fueled by a combination of increased subscriber numbers, higher subscription pricing, and a burgeoning ad-supported tier. Net income soared 45.6% to $3.13 billion, or $7.19 per share, surpassing analyst expectations of $7.08 per share.
The company also raised its full-year 2025 revenue forecast to $44.8 billion to $45.2 billion, up from $43.5 billion to $44.5 billion, reflecting strong subscriber momentum, ad sales growth, and a weaker U.S. dollar.
Key Drivers of Q2 Performance
Subscriber and Pricing Growth: While Netflix stopped reporting quarterly subscriber counts in Q1 2025, focusing instead on revenue and engagement metrics, the company noted “healthy” membership growth. Price hikes implemented in January 2025, including the ad-supported tier rising to $7.99/month, standard ad-free to $17.99/month, and premium to $24.99/month, significantly boosted revenue. All regions saw double-digit revenue growth: U.S. and Canada up 15% to $4.93 billion, Europe, Middle East, and Africa up 18% to $3.54 billion, Latin America up 9%, and Asia-Pacific up 24% to $1.31 billion.
Content and Engagement: Popular releases like Squid Game Season 3 (122 million views), Adolescence (145 million views), Sirens, Ginny & Georgia Season 3, and films like Back in Action (165 million views) drove viewership. Netflix reported 95 billion hours streamed in the first half of 2025, with Ms. Rachel ranking as the seventh most-watched show. The redesigned TV homepage, launched in Q2, enhanced content discovery, with 50% of members using the new interface and showing strong engagement.
Financial Metrics: Operating income rose 45% to $3.77 billion, with an operating margin of 34.1%, up from 27.2% in Q2 2024. Free cash flow increased 91% to $2.3 billion, and net cash from operating activities grew 84% to $2.4 billion. Netflix raised its full-year free cash flow guidance to $8 billion to $8.5 billion. However, the company cautioned that margins may dip in the second half due to higher content amortization and marketing costs.
Live Events and Sports: Netflix is expanding into live programming, with successes like the Jake Paul vs. Mike Tyson boxing match and NFL Christmas Day games in 2024. Upcoming events include the Taylor vs. Serrano boxing rematch and WWE Raw.