TLDR
- Netflix Q2 revenue rose 16% to $11.08B, beating estimates
- EPS came in at $7.19 vs. $7.08 expected
- Raised full-year revenue outlook to up to $45.2B
- Free cash flow surged 91% to $2.3B
- Shares dipped ~1% in after-hours trading on margin concerns
Netflix (NASDAQ: NFLX) closed at $1,274.17 on July 17, up 1.91% for the day, before releasing its Q2 2025 earnings after the bell.
The streaming giant reported revenue of $11.08 billion, slightly ahead of the $11.07 billion Wall Street expected. Earnings per share also beat estimates, coming in at $7.19 versus the $7.08 forecast. Year-over-year, revenue increased nearly 16%, while EPS rose from $4.88 to $7.19, a 47% jump.
Netflix cited healthy subscriber growth, higher pricing, and increasing ad sales as key drivers. This marked the second quarter Netflix opted not to disclose subscriber numbers, pivoting focus to overall revenue and profitability metrics.
Netflix, $NFLX, Q2-25. Results:
📊 EPS: $7.19 🟢
💰 Revenue: $11.08B 🟢
📈 Net Income: $3.13B
🔎 Revenue and operating income slightly beat guidance, driven by strong member growth, ad sales, and favorable F/X. pic.twitter.com/TOIbJnk4Sp— EarningsTime (@Earnings_Time) July 17, 2025
Operating Margins Rise, but Outlook Dampens Enthusiasm
The company posted an operating margin of 34.1% for the quarter, up nearly 7 percentage points year-over-year. However, Netflix warned investors that second-half margins are expected to drop due to higher content and marketing expenses. The guidance sparked mild concern, leading to a roughly 1% decline in after-hours share price.
Netflix reported net income of $3.1 billion, up from $2.1 billion in the same period last year. Net cash from operating activities reached $2.4 billion, an 84% increase, while free cash flow hit $2.3 billion, surging 91%. It also raised full-year free cash flow guidance to a range of $8–$8.5 billion from its previous ~$8 billion estimate.
Raised Full-Year Revenue Guidance
Netflix updated its full-year revenue forecast to between $44.8 billion and $45.2 billion, up from its earlier $43.5–$44.5 billion range. The revision reflects a weaker U.S. dollar and stronger member and ad revenue growth. Wall Street was expecting $44.5 billion.
The company expects Q3 2025 earnings of $6.87 per share on $11.53 billion in revenue, also above analyst forecasts. For comparison, Netflix posted $5.40 EPS on $9.82 billion in revenue in Q3 2024.
Content and Ad Suite Rollout Fuel Growth
Netflix completed its rollout of the proprietary Netflix Ads Suite this quarter. New and returning hits, like “Wednesday” Season 2, “Stranger Things” finale, “Happy Gilmore 2,” and Guillermo del Toro’s “Frankenstein”, are expected to boost performance in the coming quarters.
While Netflix delivered a strong quarter with improved cash flow and guidance, investor sentiment was tempered by margin pressure expected later in the year.
