The concluding season of the global sensation Squid Game contributed to Netflix NFLX-Q surpassing Wall Street's earnings expectations for the second quarter, leading the streaming platform to increase its revenue outlook for the year.
Some investors anticipated more substantial results from the leading movie and television streaming company, analysts noted.
Before the earnings announcement on Thursday, Netflix's stock had climbed nearly 44 percent this year.
The share price dipped by 1.8 percent to US$1,251.86 in after-hours trading.
Netflix has been developing an ad-supported model to attract budget-conscious viewers, although it has indicated that advertising will not play a significant role in revenue growth this year. The company has also introduced live events like WWE wrestling to attract both advertisers and viewers.
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For the period from April to June, Netflix reported diluted earnings per share of US$7.19, exceeding the US$7.08 average estimate of analysts surveyed by LSEG.
The firm raised its revenue forecast for 2025 to between US$44.8 billion and US$45.2 billion, citing the weakening U.S. dollar alongside “healthy member growth and ad sales.”
Previously, it had projected a maximum of US$44.5 billion.
Investing.com analyst Thomas Monteiro expressed that investors were anticipating a "significantly stronger upward adjustment" to the 2025 guidance.
For the recently concluded quarter, net income was recorded at US$3.1 billion, surpassing the expectations of $3.06 billion. Revenue reached $11.08 billion, slightly above the anticipated $11.07 billion by analysts.
Netflix launched the third and final season of the dystopian Korean series Squid Game just days before the second quarter closed in June. This series is recognized as the most popular non-English show in Netflix's history, with the third season garnering 122 million views, as stated by Netflix.
Additional releases during this quarter comprised Sirens, The Four Seasons, and the third season of Ginny & Georgia.
The streaming video pioneer has ceased to report quarterly subscriber figures this year, instead encouraging investors to focus on profitability as a success metric. It mentioned that member growth surpassed its projections but occurred late in the quarter, which limited its effect on the second-quarter revenue.
For the upcoming period, Netflix estimates revenue of US$11.5 billion and net income of nearly US$3 billion. Analysts had forecasted US$11.3 billion and US$2.9 billion, respectively.
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The company is set to debut new seasons of two of its largest shows later this year. Wednesday is returning in August, while the final episodes of Stranger Things will come out in November and December.
When Chief Financial Officer Spencer Neumann was asked about the company's perspective on acquiring assets from other media firms, he mentioned that Netflix would be “selective.”