Netflix is no longer reporting number of subscribers on a quarterly basis. But it’s still motoring with a hot growth engine, delivering financial results for the first quarter of 2025 that topped Wall Street expectations.
The industry-leading subscription streamer reported Q1 revenue of $10.54 billion, up 12.5%, and earnings per share of $6.61 (compared with $5.28 a year prior). Operating margin was 31.7%, up from 28.1% in Q1 of 2024. It’s the first quarter Netflix will stop disclosing subscriber counts, a longtime metric investors have used to gauge its growth, as the company wants to focus the narrative on financials and user engagement.
On average, Wall Street analysts expected $10.51 billion in revenue and earnings of $5.66 per share, according to LSEG Data & Analytics.
In its quarterly letter to shareholders, Netflix said the revenue was driven primarily by membership growth and higher pricing. During Q1, Netflix hiked prices in the U.S., the U.K. and Argentina and on Thursday announced that it’s raising prices in France as well. “Revenue was modestly above our guidance due to slightly higher-than-forecasted subscription and ad revenue (which is still very small relative to subscription revenue),” the company said.
For Q2, Netflix expect revenue growth of 15% “as we see the full quarter benefit from recent price changes and continued growth in membership and advertising revenue,” it continued. The company projected an operating margin of 33%, a roughly 6 percentage point year-over-year improvement. It’s forecasting earnings per share of $7.03 for the June quarter.
Netflix’s earnings beat for Q1 comes amid broader fears of a looming economic downturn that could deliver a punch to consumer spending and ad budgets. For the full-year 2024, Netflix revenue rose 15.6%. The company reiterated its forecast for 2025 revenue of $43.5 billion-$44.5 billion (up 11.5%-14.1%), which “assumes healthy member growth, higher subscription pricing and a rough doubling of our ad revenue,” it said in the shareholder letter.
Netflix ended 2024 with a reported 301.6 million paid subscribers globally, up 16% for the year. But according to the company, the quarter-to-quarter sub count is not as relevant as financial and user engagement metrics, given its rollout of plans at different price points and its paid-sharing option (which lets subscribers add “extra members” to their accounts for an additional fee).
Analysts have suggested that Netflix made the change because its subscriber growth rate is slowing, while also noting other companies that have done the same kind of thing (in 2018, Apple stopped disclosing unit sales of iPhones and other product lines). Meanwhile, following the Q1 price hikes, Netflix can “obscure subscriber churn” while “showing meaningful revenue growth,” Wedbush Securities analyst Alicia Reese pointed out in an April 11 research note.
In announcing the Q1 earnings, Netflix said co-founder Reed Hastings would step down from his executive chairman role and going forward will serve as chairman of the board in a non-executive director position.
During the quarter, Netflix said it paid down $800 million of debut using proceeds from its 2024 refinancing and repurchased 3.7 million shares for $3.5 billion (with $13.6 billion remaining under its existing share-repurchase authorization). The company ended the quarter with gross debt of $15.1 billion and cash and equivalents of $7.2 billion. In Q2, Netflix has $1 billion of debt maturities, which it will pay down “with proceeds from our investment grade bond deal last year, which are currently held in short-term investments,” it said.
(Pictured above: Cristin Milioti in Netflix’s “Black Mirror” Season 7 episode “USS Callister: Into Infinity”)
