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Streaming giant Netflix (NFLX) will report its first quarter 2025 financials on Thursday, April 17. Heading into the print, NFLX stock has shown resilience amid the broader selloff in equity markets. The stock is trading in positive territory year-to-date and has climbed about 51% over the past year.
This resilience can largely be credited to the company’s core subscription business, which continues to grow steadily thanks to rising global paid memberships. The streaming giant has maintained its position as a market leader, even as competition has intensified.
Still, not everything is smooth sailing, and Netflix is not completely immune to macroeconomic headwinds. As the economy faces potential recessionary pressures, there are growing concerns about the impact on consumer discretionary spending. At the same time, there’s caution around the possibility of reduced advertising spend from businesses, which could weigh on Netflix’s ad-supported tier. Let’s take a look at analysts’ expectations for Q1.
Netflix: Q1 Expectations
Netflix is gearing up to report its first-quarter earnings for 2025, and Wall Street is anticipating continued improvement in its top and bottom lines. Analysts expect the streaming giant to post earnings of $5.74 per share, reflecting an 8.71% increase compared to the $5.28 it delivered in the same period a year ago. Notably, Netflix has a solid track record of outperformance, exceeding earnings expectations for four consecutive quarters. In its most recent report, the company delivered a 1.67% earnings beat.
On the revenue side, Netflix forecasts 11% year-over-year growth for the quarter. While this figure comes in slightly below the company’s full-year guidance of 12%–14% growth, management attributes the variance to the timing of recent price adjustments and the seasonal nature of its advertising business. Even so, the outlook remains optimistic.
Strong subscriber growth continues to be a key catalyst behind Netflix’s solid financials. Combined with gains in average revenue per member (ARM) and the increasing contribution from its ad-supported tier, these factors are helping to fuel top-line performance. As revenue grows and margins expand, Netflix is also expected to see a lift in profitability and free cash flow.
What’s Ahead for Netflix Stock?
Netflix entered 2025 riding high after a record-breaking 2024, during which it added 41 million new subscribers. The momentum will likely sustain, driven by solid monetization strategies that will help boost revenue and profitability.
Netflix sees ample room for further growth. It estimates that it has only captured about 6% of its total revenue opportunity, leaving a significant upside.
Engagement remains a key catalyst for growth. During its last earnings call, Netflix revealed that subscribers spend an average of two hours daily on the platform. This is due to its strong original content. The company continues to invest in high-quality films, series, and live events, which are helping retain users and differentiate Netflix from competitors.
Meanwhile, Netflix’s ad-supported tier is quickly becoming a key growth catalyst for the company. Over half of new subscribers in eligible markets opt for the lower-cost ad plan, which grew by 30% in Q4 of 2024, following a 35% gain in the previous quarter. With advertisers eager to tap into the platform’s broad reach and Netflix continuing to enhance its offerings, ad revenue is poised to become a significant pillar of the company’s long-term growth.
To strengthen its position further, Netflix has rolled out new initiatives like the “Extra Member with Ads” option and intensified its password-sharing crackdown. Moreover, strategic price hikes in significant markets, including the U.S., contribute to its ability to fund content development while expanding margins.
The Bottom Line
While macroeconomic pressures may still weigh on consumer behavior and advertiser budgets, Netflix appears well-equipped to navigate these challenges. The company’s multi-pronged revenue approach, loyal user base, and content leadership provide a strong foundation for continued growth.
Analysts maintain a “Moderate Buy” consensus on Netflix stock, reflecting optimism tempered by near-term economic uncertainties. However, for investors looking ahead to April 17 and beyond, Netflix remains a compelling long-term investment.
