Netflix Reports Strong Q2 with 16% Revenue Increase

Netflix delivered a blockbuster second quarter, reporting revenue of $11.08 billion—about 16 percent higher than a year ago—and diluted earnings of $7.19 per share, a 47 percent jump that handily beat Wall Street’s target. Net income reached $3.13 billion, and operating margin expanded seven points to 34 percent, its highest level in four years. Co‑CEO Greg Peters told CNBC the surge reflects “healthy member growth, early traction in advertising, and a weaker dollar that flatters international sales.” The streamer also lifted its full‑year revenue outlook to $44.8 billion–$45.2 billion and now aims for a 29.5 percent FX‑neutral operating margin, or roughly 30 percent as reported. 

Although Netflix no longer discloses quarterly subscriber tallies, third‑party counters estimate the service has edged past 303 million global memberships. Internal data show that nearly half of new U.S. sign‑ups in early 2025 picked the $8 ad‑supported tier, helping ad revenue grow fast enough that the company still expects that line to double this year. To accelerate the ad push, Netflix completed its in‑house Netflix Ads Suite rollout and teased “interactive spots” that let viewers shop or vote onscreen during live events. 

Content was a clear catalyst: the long‑awaited Squid Game Season 3 drew 122 million views in its first month, while fresh instalments of Ginny & Georgia and sci‑fi epic The Eternaut kept engagement high. Looking ahead, management flagged second‑half crowd‑pullers such as Wednesday S2, the Stranger Things finale and a Christmas Day NFL game, plus the Canelo Álvarez–Terence Crawford boxing match that will stream exclusively on Netflix’s still‑nascent sports vertical.

Cost discipline remains tight even as Netflix spends aggressively on technology. The company said it is investing in generative‑AI tools to cut visual‑effects timelines and has already used AI‑assisted workflows on The Eternaut, trimming some sequences from twelve weeks of post‑production to four. Capital spending will stay elevated as Netflix buys bandwidth for live sports and builds out its ad‑tech stack, but the board reaffirmed plans to continue share repurchases with free cash flow that hit $2.27 billion in Q2.

Investors initially reacted with caution—shares slipped about 1.8 percent in after‑hours trading as some analysts called the new guidance “conservative”—yet Netflix stock is still up more than 40 percent year‑to‑date. CFO Spencer Neumann dismissed talk of big acquisitions, insisting the priority remains organic growth fuelled by programming hits, ad monetization and disciplined pricing. With a stronger revenue forecast, a widening margin and a slate stacked for the back half of the year, Netflix just reminded markets why it remains the yardstick by which every other streaming service is measured. 

Closing, Netflix is now the 18th biggest company in the world with a  Market capitalisation of $542b.