Netflix posts strong earnings despite economic headwinds
Rising economic uncertainty amid a global trade war did little to dampen Netflix's financial results in the first quarter.
The Los Gatos-based streaming giant said its first quarter revenue grew 13% to $10.5 billion, fueled by membership growth and higher prices.
Net income jumped 24% to $2.89 billion in the quarter, well ahead of the $2.48 billion that analysts had forecast, according to FactSet.
The robust growth provided further evidence of Netflix's dominance in the streaming market during an uncertain economy.
'In times when consumers may be scrutinizing their spending on streaming services, expert sentiment remains consistent: Netflix will continue to be the default platform and the last to be cut by the vast majority of users,' said John Conca, an analyst at investment research firm Third Bridge.
Netflix stock rose 1% on Thursday, closing at $973.03 a share.
Earlier this year, Netflix raised prices on certain subscription plans in the U.S., including for its lower cost ad-supported plan, which has been growing.
During the first quarter, Netflix became home to 'WWE Raw,' which analysts said helped boost the streamer's advertising and drew significant viewership.
Some analysts said they believe Netflix will weather any pullback in the advertising market caused by global trade disputes.
Netflix launched its cheaper ad-supported tier in 2022 and it is still a small, but growing, part of its business.
'Because Netflix relies on advertising less than most of its competitors do, in some ways it will be less exposed to tariffs that constrict upfront commitments,' said Ross Benes, senior analyst at research firm EMarketer. 'I don't think the macro economic problems the world is facing are going to hit them.'
Programs that Netflix launched in the first quarter included limited series drama 'Adolescence,' about a 13-year-old boy suspected of murdering his classmate. The series has drawn 124.2 million views so far and is ranked third in Netflix's most popular English language shows of all time, surpassing the first season of Regency romance series 'Bridgerton.'
Other shows that launched in the first quarter included the Shondaland mystery series 'The Residence,' reality TV program 'Million Dollar Secret,' Kate Hudson comedy series 'Running Point' and romance movie 'The Life List.'
'We're executing on our 2025 priorities: improving our series and film offering and growing our ads business; further developing newer initiatives like live programming and games; and sustaining healthy revenue and profit growth,' Netflix said in a letter to shareholders on Thursday.
Last year, Netflix said it had more than 301 million subscribers.
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