Netflix raises guidance on earnings beat
Why it matters: Netflix's earnings results, presented early on in earnings season, typically serve as a bellwether for other entertainment companies.
But Netflix's powerful slate of hits in the second quarter could suggest its success is an outlier.
By the numbers: Netflix said its revenue grew 15.9% last quarter compared to the same three-month period a year ago.
Its quarterly revenue of $11.08 billion, beat analyst estimates, as did its earnings of $7.19 per share.
The company now expects full-year revenue between $44.8 billion and $45.2 billion, up from its previous forecast for $43.5 billion to $44.5 billion.
Its higher forecast, it said in an investor letter, "primarily reflects the weakening of the US dollar vs. most other currencies, plus healthy member growth and ad sales."
Zoom out: Netflix's success last quarter can be largely attributed to strong series that drove record-high engagement, such as the final season of "Squid Game" and the third season of "Ginny & Georgia," per Nielsen.
Netflix recorded the largest monthly uptick among streaming platforms in June, Nielsen said. Last month, Netflix commanded 8.3% of TV viewing in the U.S.
Netflix said it's optimistic about the second half of the year, thanks to several new series and shows, including the second season of "Wednesday" and the final season of "Stranger Things."
Between the lines: Like most U.S. entertainment companies, Netflix is also monitoring how the Trump administration plans to implement potential tariffs on foreign-made content.
In its earnings letter to investors, the streaming giant said, "Our most significant investment remains in the U.S."
It added that from 2020 to 2024, "we estimate that we contributed $125 billion to the U.S. economy."
The big picture: With more than 300 million global subscribers and a consistently profitable streaming business, Netflix has set the bar for the rest of Hollywood's entertainment giants.
The company no longer reports incremental subscriber figures each quarter and has pivoted to focus on revenue and profit growth to measure success.
Wall Street has applauded the streamer for its ability to convert attention into dollars, even as it lags traditional entertainment companies when it comes to its ad business.
Netflix's stock is up 43% so far this year, outperforming most of its rivals like Disney, Warner Bros. Discovery and Paramount which have gained between 10% and 24% year to date.
Netflix's market cap of $542 billion is more than double Disney's ($219 billion), and more than 17x WBD's ($31.7 billion).
What to watch: Netflix has been investing more in live programming, especially around sports, as it looks to beef up its ad sales opportunities.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
San Francisco Chronicle
2 minutes ago
- San Francisco Chronicle
As Newsom ponders redistricting, California projected to lose as many as 4 congressional seats
California could lose as many as four congressional seats in the 2030 apportionment, researchers say. A recent report from the National Democratic Redistricting Committee (NDRC) echoes earlier forecasts of the state's declining political clout, including from the non-partisan American Redistricting Project and from the Brennan Center for Justice at New York University. All three reports found the state could lose at least three seats; the Brennan Center projected four. California isn't alone. Other Democratic-leaning states like New York, Illinois and Minnesota are also expected to lose one or two seats due to population declines. Meanwhile, Republican-leaning Florida and Texas could each gain as many as four new seats. Since districts in many of these states tend to be heavily gerrymandered, and because the Electoral College is winner-take-all, these changes would help Republicans in both presidential and congressional races if current partisan preferences hold. The zero-sum math behind apportionment has always been the same: Each state receives seats in proportion to its population at each Census. For decades, that math worked in California's favor. Between 1950 and 1990, the state added an average of 6 new seats every apportionment cycle as its population ballooned. But lately, the state's growth has stalled out. Sky-high housing prices have driven hundreds of thousands out of the Golden State — often to the same red states that are gaining seats at California's expense. That process accelerated during the pandemic, as many Californians left the state and worked remotely from places with lower living costs, said Michael Li, senior counsel for the Brennan Center's Democracy Program. A large number of Baby Boomers also moved out of the state after retirement, he said. What's more, the immigrants who have lately powered the state's growth are staying away. Their numbers declined during the pandemic and under subsequent Trump-era restrictions. The projected decline of California's clout matters as Gov. Gavin Newsom is considering a countermove to Texas Gov. Greg Abbott's redistricting plan favoring Republicans. Abbott called a special legislative session to redraw the state's congressional maps, a move that breaks from the custom of a once-a-decade redistricting cycle. Typically, new maps wouldn't be drawn again until after the 2030 census, unless ordered by a court. But Trump allies are pressuring Texas to make changes early to give Republicans an edge before the midterms. 'They are clearly very, very scared that they're going to lose the House of Representatives in this coming midterm cycle, and they're tipping their hand that they're going to need to cheat,' said John Bisognano, the president of NDRC, which fights for redistricting favorable to Democrats. For his part, Newsom could have a hard time using redistricting as a tool of partisan power. Even if the governor wanted to redraw congressional maps to favor Democrats, which state law already makes difficult, the math might only work out until the next Census. Data shows that not only is California's population stagnant, it's shrinking fastest in Democratic parts of the state. On average, between 2020 and 2023, Republican-leaning congressional districts in California grew, while Democratic ones shrank. California has limited tools to hold onto its political clout. For one thing, the state could invest more in boosting census participation, said Howard Fienberg, co-director at The Census Project. 'People may not be willing to report their information especially if they have illegal identity statuses or they are not proficient in English,' said Fienberg. 'It's also hard to count people accurately in rural or clustered urban areas.' Of course, California could also combat its declining influence by doing what it used to: attracting lots of new residents. Some signs are positive. As more companies require in-person work, people are moving back to the state and the trend could shift in the near future, said Li. 'We are still only halfway through the decade,' said Li. 'The future could look very different.'
San Francisco Chronicle
2 minutes ago
- San Francisco Chronicle
The U.S. is losing its biotech edge over China — and that's bad news for the Bay Area
From gene therapies to cancer breakthroughs, California has been the driving force behind America's biotechnology industry. But today, that edge is slipping. A National Security Commission on Emerging Biotechnology report to Congress in April stated that the U.S. is dangerously close to falling behind China in biotechnology innovation, and called for urgent investment and strategic coordination to maintain global leadership. Genentech's founding in 1976 in South San Francisco marked the start of the modern biotech era, and, ever since, California has been at the forefront of countless scientific discoveries and medical innovations. However, recent funding cuts and an overreliance on China for manufacturing pipelines leave our nation vulnerable. As the report urges, the U.S. must prioritize biotechnology at the national level or risk relying on China to use this strategic power for good. In 2011, the Chinese government declared biotechnology a ' strategic emerging industry ' and has since committed billions to secure dominance in areas like synthetic biology, gene editing and biomanufacturing. In 2024 alone, China conducted over 7,100 clinical drug trials, surpassing the United States and accounting for nearly 40% of global trial activity. Despite U.S. tariffs under the Trump administration designed to counter China's economic influence, China's gross domestic product has remained strong, fueling even greater investment in strategic sectors like biotechnology. By contrast, the U.S. continues to lose ground, constrained by outdated regulatory frameworks and a lack of coordinated federal strategy. While China is building a biotech empire with deliberate, state-backed coordination, the U.S. is stuck playing defense with shrinking budgets. U.S. federal support for biomedical research is slipping, with the budget for the National Institutes of Health facing a 40% cut in the coming year. For a region like the Bay Area, home to some of the world's most promising biotech startups and research institutions, these cuts have a direct toll, including the termination of $314 million in funding that was to be used to train the next generation of biomedical and health researchers. Major institutions like UCSF, Stanford and UC Berkeley are now bracing for delayed projects, staffing freezes and reductions in early-career fellowships that are vital to sustaining long-term innovation. On a national level, promising studies have been halted midstream, leaving research gaps in breakthrough treatments for cancer, Alzheimer's disease and other major infectious diseases that impact millions of Americans. When U.S. investment in domestic biotech falters, it slows innovation at home and creates an opening for global competitors to step in. China's government is strategically positioning its biotech sector to fill the gap left by stalled American research. Just last month, U.S. pharmaceutical firms signed 14 licensing deals with Chinese biotech companies worth up to $18.3 billion, underscoring our growing dependence on China's rapidly maturing R&D capabilities. This shift carries significant implications for California. It is home to over 16,500 life sciences companies and establishments, more than any other state, according to the California Biotechnology Foundation. The state directly employs more than 466,000 workers and generates more than $414 billion in annual economic output. In 2023, California led the nation in venture capital investment, raising over $34 billion for life science companies. Further, California accounted for 40% of all U.S. life sciences patents filed in 2023, and more bioscience patents are issued to California researchers than to those in any other state. Losing ground to China isn't just an economic risk; it's also a national security threat that could reshape who controls the future of health care. While the U.S. system is built on competition and patient outcomes, China's state-controlled model prioritizes strategic control and global influence. In America, ethical safeguards, transparency and regulatory review shape medical progress. In China, the government's control allows for faster approvals but also looser oversight, creating the risk of untested or misused science. The National Security Commission on Emerging Biotechnology warned that China's biotech advances could be weaponized — from battlefield-ready biologics to more nefarious applications. As a scientist working in biotechnology in the Bay Area, I understand that California plays a central role in this global race. From early-stage research in university labs to large-scale manufacturing by leading biotech firms, the state's infrastructure, talent and capital drive America's competitiveness. The Bay Area remains one of the most dense and productive biotech ecosystems in the world, thanks to its concentration of top-tier research institutions, world-class hospitals, a culture of entrepreneurship and the ability to attract the world's best and brightest to its academic and industrial ecosystem. But even here, the warning signs are hard to ignore. Federal NIH cuts have already disrupted major research projects at UC campuses, impacting our ability to attract talented students to our graduate and postdoctoral research programs, while venture capital is increasingly eyeing faster-moving regulatory environments abroad, preferring to license in late-stage assets from China instead of funding early-stage research at home. If Washington fails to prioritize a national biotech strategy, California's innovation engine could slow just as competitors abroad gain momentum. The state's economic future, public health leadership and ability to attract global talent are all at stake. China is no longer a distant biotech challenger and is actively reshaping the industry with its speed, regulatory agility and cost-efficiency, shifting the innovation center of gravity away from the U.S. The National Security Commission on Emerging Biotechnology has made clear that this is not just a matter of competition, but a strategic threat with long-term consequences for public health and national security. If America is to remain a global leader in biotechnology, we must urgently invest in our domestic research ecosystem and rebuild the infrastructure that has powered decades of discovery or be forced to surrender it to a rival that plays by different rules. Ash Jogalekar is a scientist and science writer based in the Bay Area. He is a scientist in residence at the Oppenheimer Project and works on emerging threats and technology risks in areas like biotechnology and AI.
CNBC
3 minutes ago
- CNBC
Earnings playbook: The reporting season heats up with Alphabet and Tesla on deck
The corporate earnings season heats up this week with some of the largest companies in the world set to report. More than 100 S & P 500 names are scheduled to post their latest quarterly figures, including Tesla, Alphabet and Coca-Cola. Those numbers come after a solid start to the reporting period. Of the roughly 59 S & P 500 names that have posted results, 86% have topped expectations, according to FactSet. Among those are Goldman Sachs and JPMorgan. Take a look at CNBC Pro's breakdown of what to expect in this week's key reports. All times are ET. Tuesday Coca-Cola is set to report earnings before the bell, followed by a conference call at 8:30 a.m. Last quarter: KO maintained its full-year outlook and said it expects tariff disruptions to be "manageable." This quarter: Analysts polled by LSEG expect roughly flat year-over-year earnings and revenue from the beverage giant. What to watch: Investors will look for updates on whether the company will move forward with a plan to switch to cane sugar from high fructose corn syrup for its drinks the U.S. — like President Donald Trump announced last week. "We appreciate President Trump's enthusiasm for our iconic Coca-Cola brand," the company said in a statement. "More details on new innovative offerings within our Coca-Cola product range will be shared soon." What history shows: Data from Bespoke Investment Group shows the company has beaten earnings expectations for five straight quarters. Wednesday Chipotle Mexican Grill is set to report earnings after the close, followed by a call at 4:30 p.m. Last quarter: CMG said it was seeing a "slowdown" in consumer spending . This quarter: Analysts see a slight decline in year-over-year earnings for the fast casual chain, LSEG data shows. What to watch: BMO upgraded Chipotle last week ahead of the company's earnings report, expecting strong results in the latter half of 2025. "We expect improving absolute performance and a widening gap to the industry to warrant a higher multiple," BMO said . What history shows: Chipotle has a strong track record around earnings. Bespoke data shows the company beats earnings estimates 78% of the time. The stock also averages a 1.6% advance on earnings days. Alphabet is set to report earnings after the closing bell, with a call slated for 4:30 p.m. Last quarter: GOOGL reported earnings and revenue that easily beat analyst expectations. This quarter: The Street sees double-digit earnings and revenue growth for Google's parent company, per LSEG. What to watch: BofA's Justin Post raised his estimates on Alphabet last week, calling for an earnings beat. "2Q positives could include: 1) Commentary suggesting ad spend has accel. since April, 2) Strong search results suggesting AI integration aiding monetization (lowering rev. reset risk), 3) YouTube beat on easy y/y comps, and 4) Cloud strength from added capacity & Workspace AI integration," he said in a note. What history shows: Alphabet earnings have beaten expectations for nine straight quarters, per Bespoke. Shares also average a 1.3% advance on earnings days. IBM is set to report earnings after after the close, followed by a conference call at 5 p.m. Last quarter: IBM maintained its full-year guidance and posted first-quarter earnings and revenue that beat expectations . This quarter: Analysts polled by LSEG expect year-over-year earnings to have grown by nearly 9%. What to watch: Morgan Stanley analyst Erik Woodring raised his price target to $253 from $233, though he kept his rating at equal weight. "Our Software and Consulting trackers lean cautiously ahead of 2Q earnings, but a weak USD supports CY25 FCF upside vs. Street. At $283, we believe FCF upside is already priced in, thus we lean tactically cautious into 2Q EPS; though 2Q is unlikely to fully break stock momentum," he said. What history shows: IBM beats earnings expectations 84% of the time, according to Bespoke. However, the stock averages a 0.5% slide on earnings days. Tesla is set to report earnings after the bell. A call with analysts and management is set for 5:30 p.m. Last quarter: TSLA reported a 20% drop in auto revenue, driving a first-quarter miss . This quarter: LSEG data shows analysts expect the electric vehicle maker to report a 20% year-on-year earnings decline. What to watch: Investors might not know what to expect from Tesla's report. Barclays analyst Dan Levy, who has an equal weight rating on shares, said the setup into the Q2 print is "confusing." He pointed to weak fundamentals for the company, but added that Tesla could get a boost from its conference call, which presents an opportunity for the company's "robotaxi/AV narrative to shine." What history shows: Tesla shares have risen after the past two earnings releases despite the company missing analyst expectations.
