In the first quarter of the year, Netflix outperformed expectations, demonstrating the strength of the world’s largest video streaming service even amid economic uncertainty influenced by President Donald Trump’s policies.
The figures made public on Thursday reveal that Netflix continues to capitalize on the momentum from last year, when it increased its subscriber base by an unprecedented 41 million worldwide, marking the highest annual increase in the company’s 27-year history.
However, how many new subscribers Netflix attracted during the January to March period remains unclear. This is the first time the company from Los Gatos, California, is not offering a quarterly update on its total subscriber count.
Last year, Netflix announced it would cease reporting subscriber numbers starting this quarter as it aims to direct investor focus toward its profits, after surpassing 300 million global subscribers in December. Pursuing this strategy, Netflix is keen on boosting its advertising sales to complement its subscription revenue.
This heightened focus on financial performance has paid off, as Netflix reported first-quarter earnings of $2.9 billion, or $6.61 per share, reflecting a 24% increase from last year.
Revenue also surged by 13% to reach $10.54 billion compared to the previous year. Both earnings and revenue figures exceeded the predictions made by FactSet Research. Although Netflix didn’t disclose specifics, it attributed the strong performance mainly to continued subscriber growth.
The impressive growth occurred despite widespread economic turmoil and the unpredictable trade war led by Trump. Technology companies have been particularly vulnerable due to the sweeping tariffs introduced on April 2, affecting those deeply integrated into international supply chains. Some relief has been offered through temporary freezes and exemptions from these charges.
However, Netflix’s global streaming service remains unaffected by these tariffs, making it a remarkable outlier in the tech sector, which has notably allowed its stock value to rise by 9% this year, while many other major tech companies have seen their market values decline.
“Netflix remains a standout in an otherwise volatile tech landscape,” commented Andrew Rocco, a stock market analyst with Zacks Investment Research.
Following the release of its report, Netflix’s shares rose nearly 3% in extended trading.
Despite its current success, the trade war has the potential to impact Netflix negatively if it leads to a recession or heightens inflationary pressures, as some economists anticipate. Such economic conditions could prompt more consumers to cut back on spending for discretionary activities, such as entertainment.
Economic volatility might also slow down advertising, which would hinder Netflix’s efforts to sell more commercials for a budget-friendly version of its streaming service, a major contributor to last year’s subscriber increase.
“We’re paying close attention clearly to the consumer sentiment and where the broader economy is moving,” remarked Netflix co-CEO Greg Peters during a conference call on Thursday. “But based on what we are seeing by actually operating the business right now, there’s nothing really significant to note.”
Peters also expressed that Netflix’s budget-friendly option, priced at $8 per month in the U.S., could serve as a buffer for the video streaming service if households begin to cut spending.
Demonstrating its confidence, Netflix reaffirmed its earlier prediction for annual revenue to reach approximately $44 billion, representing a 13% increase from 2024.
“Historically in tougher economies, home entertainment value is really important to consumer households,” highlighted Netflix co-CEO Ted Sarandos during the call.