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Netflix, Inc. (NFLX) reported a Q2 net income of $3.13 billion or $7.19 per share, exceeding expectations of $7.07, after markets closed on Thursday. Despite a favorable earnings report, Netflix stock fell 5% in morning trading on the following day, though it remains up more than 30% year-to-date and has gained nearly 500% over three years.
For Q2, Netflix’s revenue stood at $11.07 billion, a 16% increase year-over-year, though it slightly missed analyst estimates of $11.08 billion. The company added an estimated 5.1 million new net subscribers during the quarter, lower than the forecast of 6 million and down from 8.05 million in Q2 2024, bringing total subscribers to over 300 million.
Netflix has raised its 2025 revenue guidance to $44.8-$45.2 billion from a previous forecast of $43.5-$44.5 billion, while operating margin guidance has been adjusted from 29% to 29.5%. Despite trading at a premium P/E ratio of 50X earnings compared to the S&P 500 at 24X, the stock retains a Zacks Rank of 3 (Hold), indicating that growth expectations are priced into the stock.
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