Netflix Beats Q1 Profit Estimates as Advertising and Subscriber Growth Accelerate

Strong quarterly performance driven by diversified revenue sources and strategic pricing

Netflix Inc. significantly outpaced Wall Street expectations for the first quarter of 2025, fueled by better-than-anticipated gains in subscription numbers and advertising revenue. The company reported net income of $2.89 billion, marking a 13% increase year-over-year and surpassing the $2.48 billion consensus forecast from analysts surveyed by FactSet.

Earnings per share reached $6.61, well above the anticipated $5.67, as the company continues to benefit from pricing adjustments and the expansion of its ad-supported subscription tier.

Revenue hits $10.5 billion, pricing strategy pays off

Quarterly revenue came in at $10.5 billion, aligning with analysts’ projections and up from $9.4 billion in Q1 2024. Netflix noted that revenue growth would have reached 17% without the dampening effect of foreign exchange fluctuations. A key contributor was a price hike introduced in January, which helped boost average revenue per user (ARPU).

Despite broader economic volatility tied to new tariff policies introduced by the Trump administration, Netflix stated it has seen "no material change" to its business outlook since the previous quarter.

Strategic shift: no more subscriber count disclosure

For the first time, Netflix refrained from disclosing subscriber growth figures — historically considered a key performance metric. Instead, the company highlighted that subscription revenue came in “slightly higher” than expected. The move is part of Netflix’s broader effort to align its reporting more closely with traditional financial metrics.

In Q4 2024, the last period with available subscriber data, Netflix added 18.9 million global users, bringing its total subscriber base to just over 300 million.

Long-term targets: $1 trillion valuation and 400M subscribers by 2030

According to a recent Wall Street Journal report, Netflix has set ambitious goals through 2030, including a target of 400 million global subscribers and doubling its annual revenue. The company also aims to triple its operating income from the current $10.4 billion to over $30 billion by the end of the decade. Netflix's current market capitalization stands at approximately $411 billion.

Ad-supported tier and content diversification drive growth

Launched in late 2022, Netflix’s lower-cost ad-supported subscription tier — priced at $7.99 per month versus $24.99 for the premium, ad-free plan — has played a key role in attracting price-sensitive customers. Industry analysts, including those at MoffettNathanson, suggest this offering will be a central driver of growth moving forward.

The company continues to invest in original programming, with popular titles such as Adolescence, Black Mirror, and Squid Game contributing to sustained viewer engagement. Additionally, Netflix has expanded into live sports content, which is expected to further enhance its competitive edge in the streaming market.

Revenue outlook for Q2 and full-year guidance unchanged

Netflix forecasts 15% revenue growth in the second quarter, driven by cumulative pricing impacts and continued momentum in subscriptions and advertising. Full-year guidance remains steady, with projected revenue between $43.5 billion and $44.5 billion, underpinned by “healthy member growth, higher subscription pricing, and a rough doubling of our ad revenue.”

As Netflix transitions toward a broader financial narrative beyond subscriber counts, its strong Q1 results and long-term strategic vision suggest the streaming leader is well-positioned for sustained growth in a rapidly evolving media landscape.

Stay tuned to The Horizons Times for continued updates on Netflix and the streaming industry.