Shares of streaming giant Netflix (NFLX) slipped in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $7.19, which beat analysts’ consensus estimate of $7.07 per share. Furthermore, sales increased by 15.9% year-over-year, with revenue hitting $11.08 billion. This also beat analysts’ expectations of $11.06 billion.
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Netflix’s year-over-year revenue growth was mainly driven by an increase in subscribers, higher subscription prices, and growing ad revenue. In addition, all of its global markets posted strong results, with every region seeing double-digit revenue growth when adjusted for currency exchange rates. In particular, revenue in the U.S. and Canada region, which tends to be its second-largest region as pictured below, rose by 15% compared to 9% in the first quarter of 2025, thanks to the full effect of recent price hikes.
Subscriber growth also came in higher than internal forecasts, but the impact on Q2 revenue was limited because it picked up later in the quarter. Despite this, operating income reached $3.8 billion, which was up 45% from last year, while operating margin rose to 34% from 27%.
Netflix’s Guidance for Q3 2025
Looking forward, management has provided the following guidance for Q3 2025:
- Revenue of $11.53 billion versus analysts’ estimates of $11.28 billion
- EPS of $6.87 versus the consensus estimate of $6.71
Although Netflix beat on both earnings and guidance, the stock is slightly down in the after-hours market. This is likely due to its rally during the regular trading session, which probably created a small “sell-the-news” event.
Is NFLX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 26 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average NFLX price target of $1,345.47 per share implies 5.5% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
