Netflix reported strong second-quarter earnings, with revenue reaching $11.1 billion, operating income of $3.8 billion, and a record operating margin of 34.1%. The results exceeded Wall Street expectations and reflected continued momentum across several areas of the business.
Revenue rose 16% year-over-year, driven by subscription price increases in mature markets including the U.S. and Canada, as well as growth in its advertising business. North American revenue was up 15% year-over-year, and the company continues to maintain low churn levels despite the higher prices.
Netflix also benefited from favorable foreign exchange conditions. The U.S. dollar weakened relative to other currencies during the quarter, boosting the value of international revenue, which accounted for 56% of total sales. CFO Spencer Neumann noted that the company’s updated full-year guidance “primarily reflects the foreign exchange impact from the weakening dollar,” though he also cited strong underlying fundamentals including “healthy member growth” and ad momentum.
This marks the second consecutive quarter in which Netflix has opted not to disclose subscriber numbers, instead focusing on engagement, revenue, and profitability metrics. The company reported earnings per share of $7.19, beating the consensus estimate of $7.08 and up from $4.88 a year ago.
Looking ahead, Netflix raised its full-year revenue guidance to a range of $44.8 billion to $45.2 billion, and updated its margin forecast to 29.5%. For Q3, the company is guiding to $11.5 billion in revenue and an operating margin of 31.5%, slightly lower than Q2 due to increased content and marketing spend.
The company’s ad-supported tier continues to scale. While external estimates like Visible Alpha project ad revenue will grow from $1.9 billion in 2024 to $3.9 billion in 2025, Netflix itself has yet to disclose detailed figures. Without official numbers or performance breakdowns, it remains difficult to assess how much scale or profitability the ad business has actually achieved.
Upcoming titles in the second half of the year include Squid Game, Wednesday, Stranger Things, and Happy Gilmore 2, a slate aimed at maintaining viewer engagement and supporting revenue across all tiers.
Despite the positive earnings report, Netflix shares traded lower in early Friday trading, possibly reflecting investor caution following a strong run. Netflix stock is up 134% since January 2024. The company’s valuation, trading at 44x forward earnings, remains near a three-year high.
In the U.S. streaming landscape, Netflix remains a top player by viewing share. According to Nielsen’s June data, YouTube led with 12.8% while Netflix followed at 8.3%. Disney’s combined platforms held 4.8%. Netflix’s position continues to evolve as competition from platforms like YouTube and TikTok intensifies.
