Netflix Q2 Earnings: Will Streaming Giant Deliver Binge-Worthy Sequel to Q1 Blockbuster?
Published on July 14, 2025 by Neil Wilson, Investor Content Strategist
Overview
Netflix is set to report its Q2 earnings on July 17, following a strong performance in Q1 that saw shares rise by 30%. Investors are eager to see if the company can maintain its momentum and potentially upgrade its full-year guidance.
Q1 Performance Recap
In April, Netflix reported a significant earnings beat for Q1, with a 13% increase in revenue, attributed to higher advertising and subscription revenues. The company raised its pricing for various plans, with the standard plan now at $17.99 and the premium plan at $24.99. Revenue for Q1 reached $10.54 billion, surpassing Wall Street expectations.
Shift in Focus
For the first time, Netflix did not disclose subscriber numbers, shifting investor focus to traditional financial metrics such as revenue, profit margins, and advertising income. The company aims to achieve $8 billion in free cash flow this year, with advertising revenues playing a crucial role in this goal.
Advertising Strategy
Netflix is enhancing its advertising capabilities, having launched an in-house ad tech platform in the US. This platform is expected to improve measurement, targeting, and ad formats, which are essential for the company's long-term advertising strategy.
Margin Expectations
Management has guided for full-year operating margins of 29%, with Q2 expected at 33%. However, increased costs from sales, marketing, and content production, especially in live sports, may pressure margins in the latter half of the year.
Market Expectations for Q2
Wall Street anticipates Q2 revenue to exceed $11 billion, indicating a year-on-year growth of 15.6%. Pre-tax profit is expected to rise by 41% to $3.55 billion, with earnings per share forecasted to increase to $7.07.
Analyst Ratings
Several analysts have raised their price targets for Netflix, with KeyBanc increasing its target from $1,070 to $1,390, and Canaccord Genuity raising it to $1,575. However, some analysts, like Seaport Global and JPMorgan, have downgraded the stock due to valuation concerns, noting that it trades at over 50 times forward earnings, significantly higher than its peers.