Operating income was $3.3 billion, up 27 percent from a year earlier, with the operating margin increasing to 32 percent from 28 percent in the first quarter of 2024. Both figures came in above forecasts on the revenue upside and the timing of expense spending, helping to boost earnings per share to $6.61 from $5.28 a year ago.
In addition, the company sees no change in its business environment, sticking with its 2025 guidance of $43.5–44.5 billion in revenue and a 29 percent operating margin, as there’s been “no material change to its business environment,” it says.
While Netflix stopped reporting subscription numbers starting this year, it indicated that its worldwide audience had reached 700 million, putting it on track to achieve its goal of becoming the world’s most valuable entertainment company.
That’s thanks to the launch of new content that addresses the preferences of a diverse global audience. In the first quarter, for instance, the company delivered the third most popular English-language series ever, Adolescence, which reached 124 million views. It also released a hit limited series 2 from its UK team and its sixth most popular English-language film ever, “Back in Action,” which reached 146 million views.
“We believe this steady drumbeat of must-see entertainment is what allows us to capture our members’ attention and, in return, delight them every time they visit Netflix,” the company said in its letter to stockholders.
Meanwhile, Netflix is expanding into live sports with popular WWE tentpole shows such as “Royal Rumble” and “Elimination Chamber,” which draw massive global audiences.
“Our live event strategy is unchanged—we remain focused on breakthrough events that our audiences love, and any rights or event deal we pursue has to make economic sense,” the company said. “A good example is our recently-announced Taylor vs. Serrano boxing rematch on July 11.”
Launching great content for diverse audiences allows the company to boost the monetization of its subscription base through price hikes.
“Netflix’s scale and distribution, and existence as the default streaming platform for the American consumer puts it in a unique position in regards to price increases.”
Subscription-based monetization isn’t confined to price hikes; it extends to ad-supported plans. These plans are the key focus of Netflix’s growth strategy for 2025, with the rollout of the Netflix Ads Suite, the company’s in-house first-party ad tech platform, in the United States on April 1.
“Our ads plan allows us to offer lower price points for consumers while creating an additional revenue and profit stream for our business,” the company said.
Patrizia Porrini, a professor of management at Long Island University, was impressed with Netflix’s performance in recent quarters. However, she was concerned about market saturation and growing competition.
“No doubt, Netflix is a powerhouse, but it also faces substantial market saturation and many competing platforms vying for consumers’ screen time,” she told The Epoch Times.
“While it has profited from its transition to streaming, it will now require an artful balancing act of pursuing content creation and mastering cost efficiency simultaneously in an increasingly competitive space.”
