Netflix (NASDAQ:NFLX) saw its shares edge down in premarket trading on Friday, following the release of its second-quarter earnings and updated outlook. Although the streaming giant posted solid results, the performance fell short of some analysts’ lofty expectations.
Driven largely by the popularity of the concluding season of its blockbuster show “Squid Game,” combined with subscription price hikes and growing membership numbers, Netflix reported a diluted earnings per share of $7.19 for the quarter, surpassing the predicted $7.08, according to LSEG data cited by Reuters. Revenue for the period ending June 30 reached $11.08 billion, slightly above forecasts of $11.07 billion.
Earlier this year, Netflix raised prices across its U.S. subscription plans. Revenue from the U.S. and Canada—key growth markets—increased by 15% during the quarter, up from 9% in the previous quarter.
The company attributed its year-over-year revenue increase primarily to a larger subscriber base, higher subscription fees, and expanded advertising revenue.
Netflix also indicated it was close to finalizing upfront deals with major U.S. agencies for 2025 and continues to anticipate its advertising segment will nearly double its revenue compared to last year.
In efforts to boost engagement and attract advertisers, Netflix has been introducing new features like live events. The company raised its annual revenue guidance to a range of $44.8 billion to $45.2 billion, up from a prior estimate of $44.5 billion. It also increased its operating margin forecast to 29.5% from 29%.
Part of the more optimistic outlook was supported by a recent decline in the U.S. dollar, which analysts at Vital Knowledge cautioned may be a “low-quality” factor.
Jefferies strategists commented that while Netflix’s full-year revenue projections aligned fairly well with investor expectations for the quarter, the overall earnings “did not significantly outperform” estimates.
Netflix’s stock has climbed over 43% this year, fueled by optimism that the company will maintain its status as a leading force in the competitive streaming industry.
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