Netflix Tops Wall Street’s Lofty Expectations, Raises Forecast

Jul 17, 2025

Herman Chan, a Senior Analyst for US Regional Banks at Bloomberg Intelligence, discusses Netflix's impressive earnings and strategic shifts. Netflix surpassed expectations with $11.1 billion in revenue, while embracing an ad-supported model amidst fierce competition. They also touch on how evolving consumer behavior affects the streaming landscape. Additionally, Chan highlights the resilience of regional banks in the current economic climate, noting their surprising performance against larger institutions despite previous concerns.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

Netflix's Market Domination and Outlook

Netflix raised its full-year revenue and operating margin forecasts, aided by a weaker dollar and popular shows.
Its market value now surpasses Disney, Comcast, and Warner Bros. combined, underlining its streaming dominance.

INSIGHT

Ad-supported Tier Drives Growth

Netflix's ad-supported tier attracts many new subscribers who want a lower price point.
This ad revenue has huge growth potential and could significantly boost earnings over time.

ADVICE

Leverage Ads to Lower Prices

Offer consumers a lower price tier supported by advertising to meet diverse budget needs.
Use ads to subsidize subscription costs, benefiting both the customer and the company revenue.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Watch Bloomberg Businessweek Daily LIVE every day on YouTube: http://bit.ly/3vTiACF.

While rival media companies are unloading assets and cutting costs, Netflix Inc. continues to thrive.
The owner of the world’s most popular paid streaming service on Thursday reported second-quarter results that exceeded investor expectations in every major metric, saying revenue grew to $11.1 billion and earnings jumped to $7.19 a share. The company also raised its forecast for full-year sales and profit margins.

The second quarter is historically slow for Netflix, which typically adds more customers at the beginning and end of the year. But the company released a steady slate of popular shows, including two of the most-watched titles of the year — the third season of Ginny & Georgia and the final season of Squid Game. The company also benefited from a weaker dollar. More than two-thirds of its customers live outside the US.

Shares of Netflix have nearly doubled over the past year and the company’s market value tops $500 billion. That makes Netflix worth more than Walt Disney Co., Comcast Corp. and Warner Bros. Discovery Inc. combined.

While investors used to judge Netflix by the number of subscribers it added in any given quarter, the company has stopped disclosing how many customers pay for its service, directing them to focus on more traditional metrics such as sales and profit.
Netflix expects to generate up to $45.2 billion in sales this year and says its operating margin is now forecast to hit 29.5%. Net income is on track to exceed $10 billion for the first time, thanks to exchange rates that will boost sales and a strong slate of programs. The second-half schedule includes new seasons of the hit shows Stranger Things and Wednesday, as well as movies such as Happy Gilmore 2.

Today's show features:

Mark Douglas, CEO of MNTN on Netflix earnings and the streaming giant’s advertising strategy
Bloomberg News Economics Editor Molly Smith on monthly retail sales and imports data, as well as weekly jobless claims figures
Bloomberg Intelligence Senior Analyst for US Regional Banks Herman Chan with a roundup of regional bank earnings out this week
John Gates, CEO, Leasing Advisory, Americas at JLL on the company's Q2 2025 “US Office Market Dynamics Report”

See omnystudio.com/listener for privacy information.