Netflix's Q2 Results Showcase The Strength Of Its Leadership In Streaming

Last Thursday, Netflix Inc NFLX reported its second quarter financials, reflecting strong growth in advertising and increase in global subscribers. While the Walt Disney Company DIS and Warner Bros Discovery Inc WBD are about to launch their streaming bundle, Netflix is staying out of any combinations with its rivals as it succeeded to remain a “go-to” streaming destination for users.

Second Quarter Highlights

For the second quarter ended on June 30th, Netflix reported revenue grew about 17% YoY to $9.56 billion, surpassing LSEG’s estimate of 9.53 billion, fueled by the boost in average paid memberships. 

During the April 1st to June 30th quarter, Netflix gained 8.05 million net paid customers, which translates to YoY growth of 16.5% YoY as it reached a global total of nearly 278 million subscribers. As of 2025, Netflix will no longer reveal such figures as it aims to focus on revenue and operating margin as primary financial metrics, along with engagement in terms of time spent as the best proxy for evaluating customer satisfaction.

Netflix earned a net income of $2.15 billion, or $4.88 per share, which is a significant rise from last year’s comparable quarter when it earned $1.49 billion, or $3.29 per share. Earnings per share of $4.88 surpassed LSEG’s consensus estimate of $4.74 per share.

Guidance

As for the third quarter, Netflix guided for revenue of $9.73 billion, which is below Wall Street’s consensus estimates of $9.83 billion. 

However, it did increase its full-year revenue guidance as it expects growth of 14% to 15%, compared with previous guidance range between 13% to 15%. Netflix also expects full-year operating margins to grow from previously reported 25% to 26%.

Numbers never tell the whole story.

While it remains on track to achieve its subscriber goals for 2025, Netflix is shifting its focus towards monetizing its ad inventory. As it continues to work on scaling its ad-supporter subscriber base, Netflix believes it will further increase its ad-tier memberships in 2026 and beyond. Co-CEOs Greg Peters and Ted Sarandos also spoke of evolving use of gen-AI in what seems to be a deeper way compared to prior earnings calls. Sarandos also emphasized that AI will merely serve as a tool to serve creators tell better stories and not replace them, while helping users find the content they love. But when it comes to specific plans, Netflix is keeping its cards close to the chest which shouldn’t come as a surprise considering that rivals like Disney are working on their streaming platforms in an effort to catch up. Five years since its streaming debut, and even the world’s biggest entertainment company like Disney still didn’t figure out streaming entirely. While Disney continues trying to figure out Netflix’s winning formula, Netflix remains the industry’s gold standard.

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