Netflix Stock Soars 3.03% on Strong Q1 Earnings

On April 21, 2025, Netflix's stock rose by 3.03% in pre-market trading, reflecting positive market sentiment towards the company's recent financial performance and strategic initiatives.

Goldman Sachs released a research report indicating that Netflix's first-quarter financial report exceeded expectations in multiple key metrics. The market is anticipated to respond positively to these results, with a 12-month target price of $955 per share and a "neutral" rating. Analyst Eric Sheridan highlighted that the report and letter to shareholders included key points such as member growth driving steady revenue performance, and the impact of price adjustments in certain quarters. The operating profit margin significantly improved compared to the previous quarter, and the profit margin guidance also exceeded expectations. Additionally, the scale of share buybacks far surpassed the firm's pre-report expectations.

Netflix's total revenue for Q1 grew by 13% year-over-year (16% in constant currency), reaching $10.54 billion, surpassing Goldman Sachs' estimate of $10.42 billion and the market consensus of $10.50 billion. Regionally, revenue performance was robust. The U.S. and Canada region generated $4.62 billion; Europe, the Middle East, and Africa region generated $3.41 billion, with significant growth exceeding expectations; Latin America generated $1.26 billion; and the Asia-Pacific region generated $1.26 billion, all meeting or slightly exceeding expectations.

Netflix's GAAP operating income for the first quarter was $3.35 billion, significantly higher than Goldman Sachs' estimate of $2.95 billion and the market consensus of $3.00 billion. The operating margin reached 31.7%, also above expectations. Earnings per share were $6.61, higher than Goldman Sachs' estimate of $5.60 and the market consensus of $5.69.

Netflix's guidance for Q2 2025 is also impressive. The company expects total revenue to reach $11.04 billion, a 15% year-over-year increase (17% in constant currency), higher than Goldman Sachs' estimate of $10.80 billion and the market consensus of $10.89 billion. GAAP operating income is projected to be $3.68 billion, with an operating margin of approximately 33.3%, and earnings per share are expected to be $7.03, all exceeding market and Goldman Sachs' expectations. For the fiscal year 2025, Netflix reaffirmed its previous guidance, projecting total revenue between $43.5 billion and $44.5 billion, with a GAAP operating margin target of 29.0%.