Last Thursday, streaming service giant Netflix (NASDAQ: NFLX) reported solid first-quarter results that pushed shares back above $1,000 in after-hours trading. The Street likely loved the company’s huge bottom-line outperformance and management’s decision to reaffirm its full-year outlook for strong top-line growth and an improvement in its operating margin.
“We’re executing on our 2025 priorities,” Netflix said in its first-quarter shareholder letter. Those priorities include enhancing its content slate, growing its advertising business, leaning into its more nascent growth initiatives, such as live programming and games, and ultimately driving robust revenue and profit growth.
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For investors who were on the sidelines going into the report, is it too late to buy shares? This is a timely question because, although the stock is up from recent lows, it’s still well below its high of $1,064.50 achieved earlier this year. Are shares of the streaming service specialist attractive at a price of around $1,000?
Netflix shocked investors last quarter when it reported a year-over-year revenue growth rate of 16% for the period. Even more impressive was its earnings per share of $4.27 — up from $2.11 in the year-ago quarter. Many investors, however, were likely skeptical that such strong momentum could persist. Indeed, the company guided for a notable deceleration in revenue growth in the first quarter of 2025. Specifically, management said it expected revenue to increase by 11.2% year over year.
Yet, here we are with another quarter of surprising growth. The company’s top line grew by 12.5% year over year to more than $10.5 billion, a lower but still impressive growth rate compared to the previous quarter.
More importantly, however, Netflix’s operating margin came in at 31.7%, up from 28.1% in the year-ago quarter. This put earnings per share at $6.61, up from $5.28 in the same quarter last year. Management cited higher-than-forecasted subscription and ad revenue as the primary reason for outperforming its expectations at the start of the quarter.
But we haven’t even gotten to the best part. The juiciest figures were management’s guidance for its second quarter of 2025. The company stated that it expected second-quarter revenue to grow at an even faster rate than it did in the first quarter of 2025. Specifically, management guided for revenue to rise 15.4% year over year to more than $11 billion. Making this figure even more impressive, Netflix’s second-quarter revenue outlook calls for 17% year-over-year top-line growth on a constant currency basis.
