Video streaming giant Netflix has announced a $10.54 billion revenue and $3.3 billion operating income in Q1 2025, representing a 12.5 per cent increase compared to Q1 2024 revenue. The quarterly report witnessed a change as Netflix stopped disclosing its subscribers’ figures, a metric investors use to gauge its growth.
According to the report released on Thursday, the company explained that it wants to direct its focus on financials and user engagement and would report subscribers’ base when critical milestones are hit.
However, experts have suggested that Netflix made the change due to its declining subscriber growth rate, even though Netflix ended 2024 with a huge subscriber base of 302 million. In a similar case in 2018, Apple stopped disclosing unit sales of iPhones and other product lines.
Providing further insight on Q1 2025 earnings, Netflix said the revenue was driven primarily by membership growth and the introduction of higher pricing.
“Revenue was modestly above our guidance due to slightly higher-than-forecasted subscription and ad revenue (which is still very small relative to subscription revenue),” the company said.
Recall that during Q4 2024, the company announced an increase in its subscriptions across major plans in the US, Canada, Portugal, and Argentina – the first since October 2023. Its ad-supported tier was raised from $6.99 to $7.99 per month, while the standard ad-free tier increased from $15.49 to $17.99 per month. The highest-priced premium tier has also increased from $22.99 to $24.99 per month.
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Going forward, Netflix explained that in Q2 2025, it expects revenue to grow by 15 per cent, owing to price increases. It mentioned that the price hike would continue to spread across different markets and expand its advertising and ad tech platform.
“We are on track to reach sufficient scale with our member base in all ad countries in 2025.”
In addition, the streaming giant noted that experiments are underway to expand its strategy of acquiring major live events like NFL games and boxing matches. It also plans to extend its live stream events beyond the U.S. to other countries.
“To grow around the world and to delight and satisfy such a large and diverse audience, our strategy is to continuously improve and expand our entertainment offering, starting with great shows and movies from across the globe which first and foremost appeal directly to local audiences because we believe they want to see authentic stories,” the company wrote.
As part of its Q1 report, Netflix announced that co-founder Reed Hastings would step down from his executive chairman role to serve as board chairman in a non-executive director position.
The financial report follows recent tax fraud allegations on Netflix, Amazon, Meta, Alphabet, Apple, and Microsoft. The UK-based not-for-profit Fair Tax Foundation (FTF) accused the Silicon Six major tech companies of avoiding nearly $278 billion in U.S. corporate income taxes over the past 10 years.
Netflix Q1 vs Q4 2024
In its 2024 fourth quarter books, the video streaming giant gained dominance after adding a massive 18.9 million subscribers during the holiday. This summed its total base to nearly 302 million.
The streaming giant attributed the performance to a mixture of live sporting events, popular returning series like Squid Game, and singular moments, such as Beyonce’s football halftime performance, to attract a record number of subscribers over the festive period.
The company explained that its fourth-quarter programming slate surpassed its expectations as it generated large viewership on the second season of its survival thriller “Squid Game”. The dystopian Korean horror tale about a fictional, deadly game remains the most-watched Netflix TV series ever.
In other significant figures, the company recorded a profit of $1.87 billion on revenue of $10.25 billion, growing double digits from the same period the prior year. During the period, its shares also jumped more than 10 per cent to $960.60 in after-market trades.
In addition, shows such as the heavyweight boxing match between Jake Paul and Mike Tyson in November attracted 65 million streams, while the two National Football League games on Christmas Day, one featuring Beyonce’s halftime performance, brought in an average of 30 million global viewers, ranking among the most-streamed competitions in league history.
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