Netflix’s streaming advantage helped the company provide a bullish quarterly revenue outlook on Thursday.
The company rose 2.7% in out-of-hour trading as it surpassed Wall Street revenue expectations in a quarter, including hits such as the limited series “Pubescent,” the drama thriller “Zero Day,” and the unscripted series “Isle of Temptation.”
Stocks have risen 9% so far this year, compared to the 10% slump on the wider S&P 500 index.
The streaming giant also said co-founder Reid Hastings left his post as chairman of the board and became a non-executive chair of the board, “part of the natural evolution of our leadership structure and succession planning.”
With over 300 million global customers, Netflix has been signing up to markets around the world as consumers have gathered in low-cost ad support tier since its launch in late 2022.
Netflix said ad-supported tiers account for 55% of new signups in countries available.
“Having a diverse business model through subscriptions and a slow, rising ad-based layer will reduce the risk from harsher consumer spending that could drive cancellations,” said Paolo Pescatore, PP’s foresight analyst.
“Netflix is an essential service in our users’ lives. This will be the last subscription that users will cancel, given the wide range of programming,” he said.
According to data compiled by LSEG, Netflix reported revenue of $10.54 billion in the first quarter to $10.54 billion, stealing historical analyst estimates of $10.52 billion.
The diluted share profit of $6.61 exceeded the consensus estimate of $5.71.
Netflix said in the first quarter that revenue and operating income had broken its own guidance “depending on the timing of the cost, as subscription and advertising revenue are slightly higher.” He said his advertising revenue was “still very low compared to subscription revenue.”
Looking ahead, the company forecasts revenues to rise to $11.04 billion between April and June, surpassing the analyst consensus of $109 billion.
During that year, Netflix reconfirmed its revenue forecasts between $43.5 billion and $44.5 billion.
Some analysts say that President Trump’s economic policies and volatile tariff plans are increasing the likelihood that a recession will lead to consumers rethink streaming spending.
In January, the company reported that it had added a record 18.9 million subscribers in the fourth quarter of 2024.
In the quarter, Netflix declined to disclose subscriber numbers to highlight other performance metrics, including revenue and profit. Analysts say they believe changes will show slower growth for future subscribers.
