[LOS ANGELES] Netflix reported first-quarter profit that exceeded Wall Street forecasts, boosted by a recent price increase and a strong slate of programming across the globe, such as the hit UK series Adolescence.
The owner of the world’s most popular online TV network said on Thursday (Apr 17) that earnings rose 25 per cent to US$6.61 a share, easily beating analysts’ estimates of US$5.68. Sales grew 13 per cent to US$10.5 billion, in line with projections.
This is the first time Netflix has reported financial results without disclosing how many customers it added or lost – the main yardstick investors previously used to gauge the company’s performance. Management is forcing investors to judge its success or failure based on more traditional financial metrics.
The company boosted operating income by 27 per cent to US$3.3 billion, beating expectations of US$3 billion. Its operating margin of 31.7 per cent was more than three percentage points above its own forecast.
Shares of Netflix rose as much as 2.2 per cent to US$994.31 in extended trading after the results were announced. The stock has been a bright spot in a troubled year so far for entertainment stocks, up 9.2 per cent through the close of regular trading on Thursday in New York.
While Netflix used to burn through cash to fund its growing slate of shows, the company now delivers billions of US dollars in profit and free cash flow. The company projected strong results in the current quarter – forecasting sales of US$11 billion and earnings of US$7.03 a share, both above Wall Street projections.
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The gains follow the company’s best quarter ever. Netflix added 18.9 million customers to close 2024. Most analysts anticipated the company’s growth will slow in 2025, especially after management raised prices in the US, its largest market.
As its subscriber growth slows, Netflix is seeking to make more from the customers that it already has by selling advertising and raising prices. The company is rolling out new advertising technology in the markets where it offers ads and said it’s boosting the price of its service in France.
The company’s performance has long hinged on the calibre of its slate of original programming, which this month also included a new season of its hit show The Night Agent and the debut of WWE Raw.
The company devoted a significant portion of its quarterly letter to shareholders touting its investment in programming outside of the US, especially in the UK and Mexico. Counterattack, a new film from Mexico, is one of the most popular foreign-language films in Netflix history. BLOOMBERG
