Netflix 2Q25 financial results preview - what to expect 🔎

Netflix (NFLX.US) will release its earnings after market close today. Since the beginning of July, the company's stock has dropped about 6% from its All-Time High (ATH). The Q2 results could be a key factor in continuing the strong upward trend, but it's worth remembering that with such high valuations, the company is particularly susceptible to significant fluctuations. The options market is pricing in an approximate 8.5% price movement range following the earnings release.

Source: xStation

Q2 2025 Outlook

Analyst consensus expectations project revenue to grow to $11.06 billion, slightly above the company's own forecast of $11.04 billion. Exceeding $11 billion in quarterly revenue would mark a historically best quarter and represent over 15% year-over-year growth. This dynamic is expected to be supported by effective pricing management and revenue diversification across various business segments, including advertising revenue.

At the same time, the market anticipates significantly higher dynamics for operating income and net income, which are estimated to grow by 45% year-over-year. Improving profitability and pushing the operating margin to 33.1% are currently two key financial aspects for Netflix.

It's worth noting that last year, Netflix announced it would stop publishing subscriber numbers, which initially raised investor concerns. Nevertheless, if financial data supports a continued trend of profitability growth, investors should get used to the idea that Netflix's results will now be driven not by high subscriber volume growth, but by effective cost management and qualitative business development. For Netflix, it's time to reap the rewards of its dynamic subscriber base growth.

Additionally, investors will be paying attention to comments regarding the content created by Netflix itself. Management's outlook on the sports segment, new films and series, and an assessment of this year's productions could provide an important signal for the company's future prospects.

ESTIMATED RESULTS FOR Q2 2025

• Estimated Revenue: $11.06 billion

  • Estimated Revenue from U.S. & Canada: $4.85 billion

  • Estimated Revenue from EMEA: $3.5 billion

  • Estimated Revenue from Latin America: $1.33 billion

  • Estimated Revenue from APAC: $1.32 billion

• Estimated Earnings Per Share (EPS): $7.09

• Estimated Operating Income: $3.69 billion

• Estimated Operating Margin: 33.1%

• Estimated Cash Flow from Operations: $2.38 billion

• Estimated Free Cash Flow: $2.17 billion

FORECASTS FOR Q3 2025

• Estimated Revenue: $11.28 billion

• Estimated Earnings Per Share (EPS): $6.70

• Estimated Operating Income: $3.47 billion

• Estimated Operating Margin: 30.7%

FORECASTS FOR 2025:

• Estimated Revenue: $44.56 billion

• Estimated Operating Margin: 29.7%

• Estimated Cash Content Spend: $17.68 billion

• Estimated Free Cash Flow: $8.9 billion

Valuation Before Earnings

It's important to remember that in terms of valuation, Netflix remains a very expensive company. A P/E ratio of approximately 60x, a PEG ratio of 2.5x over the last 3 years, and an EV/EBITDA exceeding 47x mean the company faces the challenge of maintaining these values. Especially since the forward indicators for the next 12 months do not appear significantly lower. Netflix's strong valuation is based on its price-making and dominant position in the streaming platform arena.

However, it's worth noting that such levels leave a relatively small margin for error, and signals not only of weakness but also of strength that is worse than expected, could cause more pronounced movements in the shares of the American streaming giant.

Both forward and TTM (Trailing Twelve Months) indicators remain near record levels ahead of the earnings release. Consequently, maintaining the company's valuation remains one of the key challenges before the results are published. Source: Bloomberg Finance L.P.