Netflix’s stock surged past $1,000 a share in after-hours trading Thursday following a blowout first-quarter earnings report that beat expectations on nearly every metric.
It was a victory lap for shareholders, but the numbers hint at something deeper — Netflix (NFLX) may have figured out how to thrive in a macro environment that’s hammering other tech giants.
With companies such as Alphabet (GOOG, GOOGL) and Apple (AAPL) down roughly 20 percent year to date as of April 18, investors remain bullish on Netflix’s stock, which is up more than 9 percent this year.
Investors are betting that Netflix, with its strong fundamentals and global scale, may be one of the few tech companies poised to thrive in a murky economic environment.
The results are in
Netflix pulled in $10.54 billion in revenue for the quarter, marking a 13 percent increase from a year ago. That kind of top-line growth shows the streaming giant is still expanding its reach. Strong revenue gains signal that demand is holding up, even as consumers get choosier with their wallets.
More importantly, Netflix is turning that growth into profit. The company posted $2.89 billion in net income, up nearly 24 percent from $2.33 billion in the same quarter last year. In other words, it’s not just making more money — it’s keeping more of it.
Earnings per share came in at $6.61, beating Wall Street expectations and rising more than 25 percent year over year. A beat here usually translates into stronger upward momentum in a stock.
Finally, Netflix’s operating margin hit 31.7 percent, compared with 28.1 percent in the first quarter a year earlier. A rising margin means the business is becoming more efficient, giving it room to absorb economic setbacks without pulling back on longer term strategic plans.
Beyond the numbers: A shift in the story
But Netflix’s headline-grabbing numbers aren’t just about growth — they’re about resilience.
While competitors warn of softening consumer spending, rising costs and global uncertainty from ongoing trade wars, Netflix’s earnings show a company built to absorb the shock.
Netflix’s business model relies less on physical goods and more on intellectual property. That gives it a unique buffer against tariffs and supply chain disruptions that are already squeezing some traditional tech and retail companies.
With U.S.-China tensions escalating and tariffs hitting sectors from energy to consumer discretionary, Netflix may be one of the few U.S. brands with truly global reach and minimal exposure to international trade tensions.
Why Wall Street is tuning in
A big reason Netflix is shining on Wall Street: It pivoted to focus more on profitability.
For the first time, the company didn’t report subscriber numbers for the quarter. That bold move didn’t spook investors, though. Instead, they cheered Netflix’s growing operating margin and free cash flow, which hit $2.66 billion in Q1.
Netflix credited part of its growth to its ad-supported tier, which the company acknowledged still generates only a small slice of total revenue compared to subscriptions.
Netflix’s earnings report also noted success in raising monthly subscription prices, which rolled out in January. Those changes raised a standard monthly subscription with ads by $1 to $7.99 and increased ad-free plans by $2.50 to $17.99.
Another edge: While other streamers, like Disney+, are barely turning a profit, Netflix is scaling up. It’s expanding into live events, sports and even gaming, increasing its engagement across platforms and demographics.
Netflix knows how to spend big on content and it’s mastered the art of turning cash into binge-worthy hits. In Q1, original hits such as “Adolescence,” “Back in Action” and “Counterattack” helped drive global viewership.
That willingness to spend big on original content is the engine driving Netflix’s growing ad-supported tier, which gives budget-conscious viewers a cheaper way to stay plugged in.
Looking ahead: Can Netflix keep it up?
Netflix held its full-year guidance steady and still expects 2025 revenue between $43.5 billion and $44.5 billion. That’s a reassuring signal for investors, since several other major companies, including Walmart, pulled back on guidance for the first quarter amid tariff uncertainty.
Earlier in the week, The Wall Street Journal reported plans by Netflix executives to double revenue by 2030 and reach a $1 trillion market cap. Its current market cap sits at $416.2 billion, but with shares trading at more than $1,000 in after-hours, that goal isn’t as far-fetched as it used to be.
“We do have big long-term aspirations and those aspirations are really grounded in the potential for growth that we see in the business,” co-CEO Gregory Peters said during the call with shareholders.
That long game may be exactly what gives Netflix its edge. While the broader tech sector is bracing for economic headwinds and pouring billions of dollars into AI research and development, Netflix has built a subscription machine that doesn’t rely on hardware and doesn’t need to navigate tariffs to grow.
Netflix isn’t totally immune to a downturn. But in a shaky economy, a strong performer with a solid lineup beats the chaos shadowing Wall Street.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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