Netflix posted massive second-quarter earnings, reporting $11.08 billion in revenue and an operating income of $3.8 billion, with a strong 34.1% margin. These numbers not only exceeded Wall Street expectations but also reflected a dramatic improvement over last year. The company credited higher subscription prices and low customer churn for the surge in profit margins.
Netflix has shifted its focus away from subscriber counts to emphasizing revenue performance. In its latest report, the company highlighted that United States and Canada earnings rose by 15%, up from a 9% increase in the previous quarter. Analysts suggest the growth was driven by strategic price increases and the growing popularity of its ad-supported plan.
That ad tier, priced at $7.99 per month, surpassed 94 million monthly users as of May. Netflix revealed that more than half of new subscriptions come from this lower-cost, ad-inclusive model. The company expects ad revenue to double in 2025 and has invested heavily in its advertising infrastructure, touting enhanced targeting, new ad formats, and improved programmatic capabilities.
Despite avoiding subscriber disclosures, Netflix’s Engagement Report revealed high viewership, with members watching over 95 billion hours of content in 2024 alone. Originals like Orange Is the New Black, Ozark, and Money Heist each surpassed 100 million hours viewed. Family-friendly films like Leo and We Can Be Heroes exceeded 20 million views each.
Netflix projects Q3 revenues to reach $11.5 billion, with $3.6 billion in operating income and a still-healthy 31.5% operating margin. CEO Ted Sarandos reaffirmed the company’s creative expansion, stating the platform is actively seeking talent globally, including independent creators and influencers from social media.
This strategic shift towards advertising, selective price hikes, and global content creation is reshaping Netflix’s financial trajectory, placing it firmly ahead in the streaming wars.
