TLDR
- Netflix announces Q1 2025 earnings on April 17, with projected revenue of $10.5 billion
- The streaming platform gained 41 million new subscribers in 2024, now totaling 300 million
- Recent price adjustments include Standard plan increasing to $18, Premium plan to $25
- Broader market experiences high volatility with NASDAQ down over 15% in Q1 2025
- Expansion into sports content expected to increase production costs
Netflix will report its first-quarter 2025 financial results on Thursday, April 17. Wall Street expects the streaming company to post revenue of $10.5 billion, representing 12% year-over-year growth. Analysts project earnings of $5.73 per share.
The streaming pioneer continues to expand its global reach. Netflix added 41 million subscribers in 2024, bringing its total subscriber base to 300 million users across approximately 190 countries worldwide.
Price increases have helped fuel Netflix’s financial growth. The company recently raised its standard HD plan by $2.50 to $18 monthly and increased its Premium tier to $25 per month. These price adjustments, combined with the company’s crackdown on password sharing and expansion of ad-supported viewing options, drove strong performance throughout 2024.
Market Challenges Intensify
The broader investment landscape presents obstacles for Netflix. Markets have underperformed in early 2025, with major indices showing substantial declines. The tech-heavy NASDAQ has fallen more than 15% during the first quarter, while the wider market dropped over 10%.
Market volatility has increased dramatically. The Cboe Volatility Index (VIX) currently sits at 52.33%, compared to just 17.93% at the beginning of the year. This volatility comes amid new trade tensions and economic uncertainty.
President Trump’s administration has implemented several rounds of tariffs that have rattled markets. The government announced 54% tariffs on Chinese goods, while China retaliated with 34% tariffs on US products and services. More recently, the administration approved 20% tariffs on European goods and services.
These trade policies have prompted foreign investors, particularly from European countries, to reduce their holdings in US markets. Some economic analysts suggest the US economy may be entering a period of “continuous stagflation” – a concerning combination of persistent inflation, minimal growth, and high unemployment.
Growth Sustainability Questions
While Netflix demonstrated impressive growth in 2024, maintaining this momentum could prove challenging. The company’s recent decision to stop reporting subscriber numbers has raised questions among market watchers, with some interpreting this as a sign Netflix expects slower growth in 2025.
Competition in the streaming industry continues to intensify. This competitive pressure could result in higher customer turnover or a slowdown in new user acquisition for Netflix. The company also faces rising expenses as it moves into new content categories.
“Netflix’s content costs are set to rise as it increasingly ventures into live sports programming, such as NFL games and WWE wrestling, which are typically higher-cost businesses,” analysts note. These increasing expenses could put pressure on profit margins.
Past Performance Patterns
Examining Netflix’s historical stock movements following earnings reports provides useful context. Over the past five years, the stock has posted positive one-day returns after earnings announcements approximately 37% of the time.
This figure improves to 55% when looking at just the most recent three years. When the stock rises after earnings, the median gain has been 11%. When it falls, the median decline has been 6.7%.
Netflix currently maintains a market capitalization of $404 billion. The company generated $39 billion in revenue over the past twelve months, with $10 billion in operating profits and net income of $8.7 billion.
Despite economic uncertainties, Netflix remains a favorite among billionaire investors. Recent data shows 25 billionaires hold positions in Netflix stock with a combined investment value of $12.74 billion. This makes it the second most popular “kid-friendly” stock among billionaire investors.
The company’s extensive library of content targeted at children of various ages, combined with features like parental controls, makes Netflix an attractive option for family-oriented investment strategies.
For parents concerned about securing their children’s financial future, Netflix represents a potential long-term investment option. A survey of 2,000 UK investors revealed that 44% of parents feel stressed about making the right investment decisions for their children, while 35% worry they haven’t saved enough.
Investment experts emphasize the advantage of time when investing for children’s futures. As one report notes, stock investments benefit from compounding returns, meaning earlier investments have more opportunity to grow exponentially over time.
As Netflix prepares to announce its latest quarterly results, investors will carefully analyze the numbers for indications of how the streaming company is handling current market challenges and positioning itself for continued growth in an increasingly competitive environment.
