Netflix Shares: Entertainment Meets Earnings

For the long weekends, the question isn’t just what you’re watching - it’s what you’re investing in. Are you kicking back with a Netflix binge, or thinking bigger and buying a piece of the streaming giant itself?

Whether you're tuning in for the latest hit show or a live game, Netflix is dominating both screens and stock charts.

Just like “Netflix and chill,” investors who let their money chill in Netflix shares have seen massive returns. The company began as a DVD rental service and went public in 2002 at $15 per share. A 2-for-1 stock split followed in 2004; as Netflix soared in popularity, so did its stock, leading to a 7-for-1 split in 2015. Thanks to those two splits, one IPO share would now equal 14 shares, turning a $15 investment into over $14,000 and showcasing the power of long-term growth. Netflix shares surged, crossing the $1,000 mark after the company announced its latest results.

The Numbers Behind the Growth

This year’s first-quarter results are the first in which the company has not reported membership numbers. However, according to its website, Netflix has become a top global entertainment service with over 300 million subscribers in more than 190 countries.

For Q1 2025, Netflix reported a 13% year-over-year revenue increase (16% on a foreign exchange-neutral basis), driven by membership growth and higher pricing. This slightly exceeded guidance. Operating income reached $3.3 billion (up 27%), with a 32% margin, and earnings per share rose 25% to $6.61 vs $5.71 expected. It’s worth noting that Netflix does not intend to pay dividends, instead prioritizing profitable growth by reinvesting in the business.

Looking ahead to Q2 2025, the company expects 15% revenue growth (17% F/X neutral) and a 33% margin. Full-year revenue guidance remains between $43.5 billion and $44.5 billion, driven by strong member growth, pricing power, and rising ad revenue. The 2025 operating margin target is 29%, with current trends tracking above the midpoint of that guidance due to a weaker US dollar.

Sure, there are investor concerns about how tariffs might impact consumer behaviour. But Netflix co-CEO Greg Peters reassured, “Based on what we are seeing… there’s nothing really significant to note.” 

Conclusion 

As Netflix evolves into a global entertainment leader, its strong financials and strategic growth in pricing, content, and advertising continue to attract investor interest. With shares now hovering around the $1,000 threshold, there's also growing speculation that a stock split could be on the horizon. While a split wouldn’t change the company’s fundamentals, it could make shares more accessible to everyday investors and potentially drive renewed demand. For those thinking beyond weekend entertainment, Netflix could remain a compelling long-term play.

That said, investors may want to stay alert to emerging risks and trends that could shape Netflix’s future performance:

• Rising Competition: Streaming rivals are intensifying efforts, challenging Netflix to stay ahead through innovation and exclusive content.
• Ad Tier Growth: With subscriber numbers no longer reported, the success of the ad-supported model becomes a crucial performance metric.
• Global Risks: Economic pressures like currency fluctuations, tariffs, and evolving regulations may impact revenue and margins

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