Movies

Netflix earnings surged last quarter. Thank ‘Squid Game,’ price hikes and advertising

BBG News

Due to the success of series such as “Squid Game” and increased pricing along with rising ad income, Netflix announced robust expansion during the second quarter, surpassing predictions made by financial analysts.

In their home city of Los Gatos, the streaming service saw a significant surge in revenue, climbing by 16% to reach an impressive $11.1 billion. Simultaneously, their net income experienced a substantial boost, rising 46% to hit a noteworthy $3.1 billion compared to the previous year. Financial experts surveyed by FactSet had predicted that revenue would total approximately $11 billion and profits around $3 billion.

Hollywood Inc.

On Saturday, I was part of the massive crowd that flocked to Inglewood for Netflix’s grand fan gathering. Thousands of us gathered to celebrate our shared love for their captivating series and films. The event saw some exciting updates about their beloved productions!

Analysts on Wall Street have consistently viewed Netflix as the dominant player in the streaming market for some time now. Unlike before, Netflix no longer shares its customer count quarterly; it last disclosed that it had over 301 million subscribers back in 2024. However, there remains an expectation for Netflix to demonstrate financial progress since it’s looking to draw more advertising revenue and gain additional subscribers worldwide.

As a strong advocate for Netflix’s growth, I firmly believe that the company’s future financial surge will be fueled by its advertising business, launched in November 2022. This year alone, it is predicted that the streaming giant could amass an impressive $2.07 billion in ad revenue within the U.S., a figure projected to soar close to $3 billion by 2027, as per research firm Emarketer.

According to Paul Verna, a senior analyst at Emarketer, they’re witnessing significant income and are also successfully attracting many people to opt for or transition to their ad-supported level.

According to Netflix, their third-quarter total earnings are predicted to surge by 17%. Furthermore, they’ve raised their full-year 2025 revenue projection, anticipating a generation of approximately $44.8-$45.2 billion. This is an increase from the earlier forecast of $43.5-$44.5 billion.

By the end of May, Netflix announced that over 94 million users were actively utilizing their lower-priced advertising plan, suggesting that this ad-supported model is growing in popularity, with other streaming services also adopting a comparable approach.

Netflix stated in their shareholder letter that we are steadily advancing our ad-related ventures, and we anticipate nearly doubling our advertising income by the year 2025.

Previously this year, Netflix increased the cost on the majority of its subscription packages within the U.S. The most affordable tier with advertisements now costs $1 more per month at $7.99. According to Netflix, the feedback they’ve received regarding their recent price adjustments has been “generally in accordance” with their forecasts.

Hollywood Inc.

Netflix is stepping up its retail game by planning the opening of two brick-and-mortar stores, along with collaborating with numerous brands to market and sell merchandise inspired by their TV series and films.

Netflix encounters ongoing rivalry from various streaming platforms worldwide, as well as popular entertainment providers such as YouTube and TikTok, which capture a substantial portion of viewer’s leisure time.

In the second quarter, Netflix debuted several notable productions such as the Korean animated series “KPop Demon Slayers,” the drama “Calls from Beyond” (or simply “Sirens”), and the return of the hit show “Squid Game” with its third season.

As a movie critic, I’m thrilled to share my thoughts on “Squid Game’s” spectacular third season, which took the world by storm just a few weeks ago. This groundbreaking series not only claimed the title of the most watched program in an astonishing 93 countries during its premiere week but also shattered records with an unprecedented number of views within its first three days on Netflix. For a streaming platform that feeds on global audiences’ captivation by delivering unmissable content, this is nothing short of a triumph.

According to Melissa Otto, who heads research at S&P Global Visible Alpha, initiatives like those found in “Squid Game” Season 3 are not only positive but also demonstrate the originality of the content. These aspects attract viewers and motivate them to subscribe to Netflix or engage with its content.

I’ve had the pleasure of watching some truly remarkable shows on Netflix. They’ve garnered significant recognition, with a whopping 120 Primetime Emmy nominations to show for it. Shows like the limited series drama “Adolescence” and the comedy-drama series “Nobody Wants This” are just a few examples of their exceptional programming.

Netflix stock closed at $1,274.17 on Thursday, up about 2%.

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2025-07-18 00:31

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