Industry Insider: Netflix Quarter 2 Earnings: Financials Surge Despite Stock Dropping
Netflix, the major subscription-based streaming service, provided their second quarter earnings report on Thursday, June 17, 2025, after the U.S. stock market closed at 4:00 PM EST. As many analysts perceived, Netflix did beat earnings expectations, but the upside surprise wasn’t enough to impress investors, resulting in a decline in stock price during the following trading session.
Problem
Despite the company’s stock price being up 42% in its Year to Date (YTD) and 1.7% during trading hours prior to its quarter results, Netflix’s results did not meet the elevated expectations held by investors.
Performance
The video platform reported their second quarter results at $11.08 billion in revenue, in comparison to their internal guidance or speculation of $11.04 billion. Earnings Per Share (EPS) came in at $7.19, beating the Wall Street expectation of $7.03. Looking ahead, the company forecasted $11.53 billion in its Q3 revenue, topping analysts’ expectations of $11.28 billion and projected EPS of $6.87 versus the $6.70 forecast.
Effect And Outlook
While the numbers reflected continued growth, market reaction was unenthused. William Blair analyst Ralph Schackart said, “Good quarter but tough to surpass high expectations.” In other words, when the stock consistently surpasses anticipations, it sets an unapproachable bar for the next quarter. Falling more than 4% on opening trading hours on Friday, Netflix still gave insight on the biggest contributors to their revenue and user-growth.
Depreciation And Advertisement
Due to escalating tariff threats, one key factor increasing revenue in the quarter was the decline of the U.S. dollar. With the dollar depreciating nearly 10–11% by mid-2025, global trade tensions, and growing speculation of Federal Reserve rate cuts, Netflix benefitted from the currency conversion. Understanding that a significant portion of Netflix’s revenue comes from international markets, a weaker dollar effectively increases the value of foreign earnings when converted to U.S. dollars, thus generating more profits than before in terms of American currency. Additionally, many insiders have addressed advertising as a major strength of subscriber and user growth. Netflix’s ad -supported plan, which reached 94 million global monthly users, a 24 million increase per month since November, and now costs $7.99 per month, continues to attract cost-conscious consumers seeking affordable streaming options.
Users
In terms of user sustainability, Netflix remains promising as momentum is seeming to build in the second half of the year. Co-CEO Greg Peters mentioned on the earnings call, “Similar to last quarter, we're carefully watching consumer sentiment…”. As the major hit show Squid Game released its third season, and others like Wednesday and Stranger Things are on track to produce more seasons, viewers have more than enough content to entertain themselves with. Additionally, having future NFL Christmas day games and weekly WWE Raw is likely to boost more subscriber growth and ad revenue. One of the biggest contingencies with Netflix is that it also acknowledged growing content and operating costs, especially as the service expands into live sports and potentially other properties, like the UFC. These rising expenses could weigh on net income and eventually diminish future EPS, even as revenue continues to grow.
