Shares of Netflix, Inc. (NASDAQ: NFLX) were down over 2% on Thursday. The stock has gained 4% over the past three months. The streaming behemoth is scheduled to report its earnings results for the first quarter of 2025 on Thursday, April 17, after market close. Here’s a look at what to expect from the earnings report:
Revenue
Netflix forecasts its revenue for Q1 2025 to increase 11.2% year-over-year to $10.4 billion. Analysts are projecting revenue of $10.5 billion, which implies a growth of 12% from last year. In the fourth quarter of 2024, revenues increased 16% YoY to $10.2 billion.
Earnings
Netflix has guided for Q1 2025 earnings per share of $5.58. Analysts are predicting EPS of $5.73. This compares to EPS of $5.28 reported in Q1 2024 and EPS of $4.27 reported in Q4 2024.
Points to note
In Q4, Netflix’s top line benefited from better-than-expected membership growth, which in turn was driven by a strong content slate and improved product/market fit across all regions. The company generated a record 19 million paid net additions in the quarter. Average paid memberships rose 15% YoY while average revenue per membership (ARM) grew 1%.
Starting from Q1, Netflix will no longer report quarterly paid memberships and ARM metrics but instead will provide updates on paid memberships as it crosses key milestones. From the second quarter onwards, it will publish a bi-annual engagement report every second and fourth quarter.
The streaming giant is starting 2025 on a high note with a leading position in revenue, profit and engagement. It has a strong content slate and the return of top shows such as Squid Game and Stranger Things this year is expected to boost engagement levels further.
Despite the heavy competition in the streaming space, Netflix sees opportunity for further expansion. As mentioned in its last earnings report, it has the advantage of not having to manage declining linear networks like many of its rivals. In addition, the company’s efforts in refining its plans and pricing to suit various customer needs, and improving offerings for advertisers to grow ad revenue are expected to yield benefits.
Netflix has forecast net income of $2.44 billion for Q1 2025 which compares to net income of $2.33 billion reported in Q1 2024 and $1.87 billion reported in Q4 2024. The company expects operating income of $2.94 billion and operating margin of 28.2% for the first quarter of 2025 compared to $2.63 billion and 28.1% reported in the same period last year. In Q4 2024, operating income was $2.27 billion and operating margin was 22.2%.
