The final season of global phenomenon “Squid Game” helped Netflix beat Wall Street earnings targets for the second quarter, and the streaming service raised its revenue guidance for the year.
Some investors had hoped for more from the dominant movie and TV streaming service, analysts said. Netflix shares had risen nearly 44% this year ahead of the earnings report on Thursday. The stock fell 1.8% to $1,251.86 in after-hours trading.
Netflix has been building an ad-supported service to reel in price-sensitive viewers, though it has said advertising will not be a primary driver of revenue growth this year. The company also has added live events such as WWE wrestling to draw advertisers and viewers.
For April through June, Netflix posted diluted earnings per share of $7.19. That topped the $7.08 consensus estimate of analysts polled by LSEG.
The company raised revenue guidance for 2025 to $44.8 billion to $45.2 billion, citing the weakening of the US dollar plus “healthy member growth and ad sales.”
Its previous guidance was up to $44.5 billion.
Investing.com analyst Thomas Monteiro said investors were expecting “a much stronger upward revision” to 2025 guidance.
“The full-year outlook now feels quite conservative, which is problematic for a stock priced for perfection,” Monteiro said.
“At this stage, the company appears overly dependent on further price increases — at least through 2026 — to drive revenue,” he added.
For the just-ended quarter, net income came in at $3.1 billion, edging forecasts of $3.06 billion. Revenue totaled $11.08 billion, above the $11.07 billion analyst projection.
Netflix released the third and final season of dystopian Korean drama “Squid Game” a few days before the second quarter ended in June.
The show is the most popular non-English Netflix show in the streaming service’s history. Season three racked up 122 million views, Netflix said.
Other releases during the quarter included “Sirens,” “The Four Seasons” and a third season of “Ginny & Georgia.”
The streaming video pioneer stopped disclosing quarterly subscriber numbers this year, instead urging investors to focus on profit as a measure of its success.
It said member growth was ahead of its forecast but occurred late in the quarter, which limited the impact on second-quarter revenue.
Looking ahead, Netflix forecast revenue of $11.5 billion and net income of nearly $3 billion. Analysts had projected $11.3 billion and $2.9 billion, respectively.
The company has new seasons of two of its biggest shows coming later this year. “Wednesday” returns in August, and the final episodes of “Stranger Things” will be released in November and December.
Chief Financial Officer Spencer Neumann, asked about the company’s view on acquiring assets from other media companies, said Netflix would be “choosy.”
“We’ve historically been more builders than buyers, and we continue to see big runway for growth without fundamentally changing that playbook,” Neumann said during a post-earnings video.
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