Netflix beats analyst expectations amid trade war turmoil

On Thursday, Netflix reported quarterly earnings slightly better than analysts expected, saying it is staying focused on what it can control as the overall economy is roiled by US President Donald Trump's trade war.

The streaming television service declared itself "off to a good start in 2025" with a profit of $2.9 billion on revenue of $10.5 billion in the first quarter of the year.

Netflix reports that revenue grew thanks to higher subscription and ad earnings and the timing of some expenses.

Shares in the Silicon Valley-based company were up nearly three percent in after-market trades.

"The will-they-or-won't-they tariff situation is a disaster to many industries and will make entertainment more expensive to produce," said Emarketer senior analyst Ross Benes.

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"But Netflix is poised to withstand the strain better than most of its competitors, at least initially, due to its low reliance on ad revenues and favorable cancellation rates compared to its peers."

Netflix co-chief executive Greg Peters told financial analysts on an earnings call that the company is paying close attention to consumer sentiment and the direction of the broader economy.

"We remain focused on the things that we can control, and improving the value of Netflix is the big one," co-chief executive Ted Sarandos added.

"Historically, home entertainment value is significant to consumer households in tougher economies."

According to Sarandos, Netflix spends most of its money on content in the United States but produces original shows or films in some 50 countries.

Live programming and games

Netflix increased prices in Argentina, Canada, Portugal, and the United States early this year.

To boost sputtering growth, the company launched an ad-subsidized offering in late 2023 around the same time as a crackdown on sharing passwords.

Netflix has been steadily improving its ad platform as viewers turn from traditional television to streaming shows on demand.

"We're executing on our 2025 priorities: improving our series and film offering and growing our ads business; further developing newer initiatives like live programming and games; and sustaining healthy revenue and profit growth," Netflix said in a letter to shareholders.

Netflix forecast revenue growth of 15 percent in the current quarter, citing its lineup of shows and films and improvements to its ad platform as reasons.

"We remain optimistic about our 2025 slate with a lineup that includes returning favorites, series finales, discoveries, and surprises designed to thrill our members," Netflix told shareholders.

British Prime Minister Kier Starmer holds a roundtable meeting with writer Jack Thorne at Number 10 Downing Street in London, Britain, on March 31, 2025. Prime Minister Keir Starmer is hosting a roundtable on adolescent safety with the creators of the television show 'Adolescence,' in discussion with charities and young people about issues raised in the show. Jack Taylor/Pool via REUTERS

Netflix touted hits, including its "Adolescence" series, which has logged some 124 million views, and the Spanish-language film "Counterattack" from Mexico.

Netflix said in February it would spend $1 billion over four years producing content in Mexico, boosting the Mexican government's efforts to attract investment in the face of US tariff threats.

Investors view Netflix as a rare haven in a stock market vexed by Trump's stop-start tariff plans targeting dozens of trade partners.

This quarter marks a shift by Netflix to stop reporting subscriber numbers and earnings figures.

Analysts consider the company the leading video streaming service. Last year, it had more than 300 million subscribers.

"Netflix is part of a broader industry shift away from focusing on how many new viewers are obtained to focusing on how much money viewers are bringing in," analyst Benes said.