Netflix executives messaged Thursday that all is well with the business in the face of economic turbulence. But its full-year outlook tells a slightly more nuanced story.<\/p>\n
Netflix posted a big beat on operating margin for the first quarter, reporting 31.7% compared with the average estimate of 28.5%, according to StreetAccount. And it guided well above analyst estimates for the second quarter \u2014 33.3% against an average estimate of 30%.<\/p>\n
By its own phrasing, Netflix was \u201cahead\u201d of its own guidance for the first quarter and is \u201ctracking above the mid-point of our 2025 revenue guidance range.\u201d<\/p>\n
Still, Netflix declined to alter any of its longer-term projections. That suggests Netflix isn\u2019t quite as confident in its second half.<\/p>\n
\u201cThere\u2019s been no material change to our overall business outlook since our last earnings report,\u201d Netflix wrote in its quarterly note to shareholders.<\/p>\n
U.S. consumer sentiment is at its second-lowest level since 1952 as President Donald Trump\u2019s new tariff policies roil markets.<\/p>\n
Co-CEO Greg Peters noted during the company\u2019s earnings conference call that Netflix has, in the past, \u201cbeen generally quite resilient\u201d to economic slowdowns. Home entertainment provides a cheaper form of leisure than most other activities. A monthly Netflix subscription with ads costs $7.99.<\/p>\n
But the question remains how \u2014 or whether \u2014 an economic slowdown would pinch Americans\u2019 wallets and force higher churn among streaming subscriptions.<\/p>\n
Netflix stopped reporting quarterly subscriber numbers this quarter, so the company will likely not detail if it sees a customer slowdown later this year beyond reporting its underlying revenue and profit.<\/p>\n
First-quarter revenue of $10.5 billion was roughly in line with analyst expectations, while second-quarter guidance of $11 billion is slightly above.<\/p>\n
\u201cRetention, that\u2019s stable and strong. We haven\u2019t seen anything significant in plan mix or plan take rate,\u201d said Peters. \u201cThings generally look stable.\u201d<\/p>\n<\/p>\n
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