Latest news with #SpencerNeumann
Yahoo
2 days ago
- Business
- Yahoo
Netflix Raises Forecast After Ad Tech Success
Netflix (NASDAQ:NFLX) lifts full?year revenue guidance to $45.2 billion after a stronger?than?expected second quarter and successful global rollout of its Ad Suite. In Q2, management raised the 2025 revenue range to $44.8 billion$45.2 billion, up about $1 billion at the midpoint versus the prior $43.5 billion$44.5 billion guide. Reported operating margin now targets 30%, a full point above last year's 29%, with FX neutral margin also up 50 basis points. Co?CEO Gregory Peters said retention remains stable and industry?leading, while CFO Spencer Neumann noted that healthy member growth and ad strength beyond FX tailwinds drove the tighter range. Netflix Ad Suite is live worldwide, and early results align with expectations, Peters added. Ad revenue is on pace to roughly double year?over?year as improved ad tech and advertiser demand gain momentum. Co?CEO Ted Sarandos highlighted a steady drumbeat of returning hits like Squid Game, Wednesday and Stranger Things alongside a robust slate of upcoming movies, series and games to keep engagement high. This article first appeared on GuruFocus.
Mint
3 days ago
- Business
- Mint
Netflix Q2 revenue jumps 16% to $11.1 billion, company raises forecast
While rival media companies are unloading assets and cutting costs, Netflix Inc. continues to thrive. The owner of the world's most popular paid streaming service on Thursday reported second-quarter results that exceeded investor expectations in every major metric, saying revenue grew to $11.1 billion and earnings jumped to $7.19 a share. The company also raised its forecast for full-year sales and profit margins. The second quarter is historically slow for Netflix, which typically adds more customers at the beginning and end of the year. But the company released a steady slate of popular shows, including two of the most-watched titles of the year — the third season of Ginny & Georgia and the final season of Squid Game. The company also benefited from a weaker dollar. More than two-thirds of its customers live outside the US. Shares of Netflix were down about 2% at 5:44 p.m. New York time in extended trading. The stock has nearly doubled over the past year and the company's market value tops $500 billion. That makes Netflix worth more than Walt Disney Co., Comcast Corp. and Warner Bros. Discovery Inc. combined. While investors used to judge Netflix by the number of subscribers it added in any given quarter, the company has stopped disclosing how many customers pay for its service, directing them to focus on more traditional metrics such as sales and profit. In its statement Thursday, Netflix said its 16% gain in revenue reflected member growth, higher subscription prices and an increase in advertising revenue. Netflix expects to generate up to $45.2 billion in sales this year and says its operating margin is now forecast to hit 29.5%. Net income is on track to exceed $10 billion for the first time, thanks to exchange rates that will boost sales and a strong slate of programs. The second-half schedule includes new seasons of the hit shows Stranger Things and Wednesday, as well as movies such as Happy Gilmore 2. The streaming leader faces more competition for its customers' attention than ever before. Its share of total TV viewing hasn't grown in the US over the last year, and the company said that its average member is watching about the same amount of TV as a couple years ago. Netflix could increase its share of viewing through acquisitions, especially as companies such as Warner Bros. and Comcast are restructuring. But the company prefers to grow internally, Chief Financial Officer Spencer Neumann said on a call with analysts. Management expects engagement to increase in the second half of this year and believes the company can steal share from competitors. Netflix's user growth in the US has slowed, according to market researcher Antenna. The company boosted its customer base for a couple of years by cracking down on password sharing. The benefits from that program have started to wane. However, domestic revenue in the second quarter grew 15%, buoyed by recent price increases. The company is trying to draw in customers with a lower-cost, advertising-supported offering in a dozen markets. Its advertising sales are expected to double this year.
CNA
28-04-2025
- Business
- CNA
Commentary: Why do we put up with Netflix's endless price hikes?
SINGAPORE: When Bengawan Solo raised the price of my favourite pandan cheese roll from S$1.70 (US$1.30) to S$2.70 per slice a few years ago, I declared to my family that I was boycotting the confectionery: 'I don't need these empty calories!' When Netflix increased its premium tier pricing from S$25.98 to S$29.98 last week, I felt annoyed, then quickly consoled myself: 'It's just S$4 – less than what a bowl of noodles costs.' Never mind that Netflix content can be considered 'empty calories' too. Or that the company had just raised its prices last year, in February 2024. Over the past decade, my monthly Netflix bill has gone up 77 per cent. When the streaming service first launched here in 2016, I paid S$16.98 for the premium tier. A basic subscription ran S$10.98 in 2016 and is now S$15.98, a 46 per cent increase. Netflix's pricing behaviour is at odds with a world where people are cutting expenses in the face of tariffs and large-scale employment disruptions induced by artificial intelligence. Yet, the company appears confident that millions will swallow the latest price hike like I did. Maybe they're right. After all, a Singapore Management University study in 2024 revealed that about 38 per cent of respondents now consider streaming services to be a 'basic essential so that a person can lead a normal life in Singapore'. All the same, how much longer can Netflix keep raising prices without losing customers? CONTENT IS KING A combination of shrewd planning, massive spending, competitor missteps and lifestyle changes has made Netflix wildly successful and – more importantly – the clear winner of the streaming wars. From October to December 2024, despite a wave of complaints about its rising prices and crackdowns on account sharing, Netflix added a record 18.9 million global subscribers. Its subscriber base numbers over 300 million today, far outstripping Amazon Prime (about 200 million), Disney (125 million), Max (117 million) and Apple TV (25 million). Netflix keeps viewers captive by serving up a non-stop flow of varied, high-quality content. In 2025, the company plans to spend US$18 billion on content, up from US$16 billion in 2024. In the next few months, subscribers will get to watch the final seasons of hit shows Stranger Things, Squid Game and the second season of Addams Family spinoff Wednesday. I'm not a fan of these, but I just binge-watched the new season of Black Mirror, and am eagerly awaiting the return of Love, Death And Robots. Thanks to the massive amount of viewership data feeding its algorithms, Netflix has become a pro at pandering to a wide range of tastes. Even viewers hankering for local fare have more than just Emerald Hill to satisfy them in its growing Southeast Asian catalogue. Netflix chief financial officer Spencer Neumann in March said that 'we're not anywhere near a ceiling' in terms of content spend. The streamer is in about 40 per cent of connected TV households but has only captured 6 per cent of the addressable market, he shared. This explains why, starting this year, subscribers are seeing John Cena and other World Wrestling Entertainment stars appearing on Netflix in a US$5 billion deal. I haven't watched Wrestlemania in over 30 years – but since I've technically already paid for it, why not? WHAT IS VALUE? Meanwhile, Netflix's competitors are struggling to justify their value to consumers. In late 2024, Disney+ increased its subscription prices and lost over 700,000 global subscribers in the same quarter – myself included. In Singapore, the cost of its standard monthly subscription went up from S$12.98 to S$15.98, and the premium tier went from S$15.98 to S$18.98. Why did I cancel my subscription? Compared to Netflix, Disney+ seemed to offer little new content, flogging the tired Star Wars and Marvel catalogue on repeat. I now subscribe to Disney+ on an ad-hoc basis to binge-watch select series such as Daredevil: Born Again, or whenever I get a good offer. For example, I recently recontracted my Singtel mobile line, a deal that came with six free months of Disney+. HBO used to be the king of cable TV with blockbuster hits like Game of Thrones and Westworld, but its rocky rebranding as Max has confused viewers. Perhaps current hits The White Lotus and The Last of Us can convince some to pay S$14.48 a month – but that's not a lot of options to bank on. I keep paying for Amazon Prime Video simply because it's a no-brainer at S$4.99 a month. Its catalogue may be spotty in quality, ranging from stellar offerings like The Expanse, to a weak prequel series to The Lord of The Rings and forgotten 1980s B-movies – but the non-streaming perks make up for it, including free shipping on Amazon Prime Singapore and free PC games each month. But this is something Netflix is also making moves on: Just download the Netflix mobile app and you can install games featuring famous IP such as Street Fighter, Sonic the Hedgehog, Grand Theft Auto and Squid Game. CINEMAS CANNOT FIGHT BACK Also helping Netflix to win the long game is the stubborn refusal of cinema operators to change with the times. I used to love the cinema – I brought my family to watch every Marvel superhero movie until Avengers: Endgame in 2019. But while ticket prices kept going up (now costing about S$15 for a weekend ticket), the actual experience only seemed to be getting worse. For instance, the last few movies I watched at Golden Village Bishan were marred by blurry projection, poor colour definition or deafeningly loud audio. (Recent Google reviews reflect similar experiences from other patrons.) When the same movies were released on streaming, I watched them again at home and found each time to be a much better viewing experience, thanks to the excellent colour reproduction of my 4K OLED television – a feature shared by most TVs sold today. I could also adjust the volume as needed. Even if the movie isn't available on Netflix, it's much better value to me to rent the 4K versions for about S$5 off the Apple TV Store. I don't have to sit through up to 20 minutes of inane ads; nor do I have to endure stuffy or freezing temperatures. (And I can press pause when I need to run to the bathroom!) A good cinema can still offer an immersive viewing experience, but nowadays, the home experience isn't that shabby. Thus, I'm not surprised that cinema attendance has yet to return to pre-COVID levels; nor did I shed a tear when mm2 shuttered more Cathay cinemas. CAN NETFLIX BE STOPPED? As long as consumers continue to demonstrate a willingness to spend on digital entertainment even during periods of economic uncertainty, Netflix – and its price hikes – seems likely to remain unstoppable for now. In truth, the company's biggest competitor is not Disney+ or Amazon, but YouTube, which is just slightly behind Netflix in audience size (270 million paying subscribers versus Netflix's 300 million) and boasts similar revenue (about US$10 billion in the last quarter of 2024). YouTube's advantage is that it's driven by user-generated content; it doesn't need to invest in original content production like Netflix. I already watch YouTube more than Netflix, tolerating the annoying ads to avoid paying the S$13.98 subscription fee. More lightweight fare on TikTok and Instagram appeals to shorter attention spans. For gamers, there's no shortage of cheap mobile games and affordable PC gaming subscription services like Microsoft's Game Pass (S$11.99 a month) to satisfy one's entertainment needs. So should Netflix breach the S$30 barrier for its premium tier, I do have alternatives ready. Unfortunately, even with all these much cheaper options, Netflix's grip on me may still remain iron-clad – simply for the fact that before I can cancel my subscription, I'll first need to survive negotiations with my wife and children. Fine. You win, Netflix. Again.
Yahoo
15-04-2025
- Business
- Yahoo
Netflix Projects $10.4B in Q1 Revenue as Ad Tier Drives Growth
Netflix (NASDAQ:NFLX) is set to report Q1 2025 earnings on April 17, and the company's aiming to keep its streak going. It's guiding for $10.4 billion in revenue up 11.2% from the $9.35 billion it posted in the same quarter last year. On the profit side, it's projecting earnings of $5.58 per share, just shy of the $5.73 analysts are expecting. Operating margins are forecast at 28.2%, slightly down from the 29% it targeted for the full year, but still strong. One big tailwind? The ad-supported plan. Netflix says nearly 50% of new sign-ups are choosing the cheaper, ad-backed option, which has helped drive user growth even as the company stopped reporting quarterly subscriber adds. Still, it confirmed it has surpassed 300 million global users a 16% increase from last year. On the content side, Netflix is going big. It plans to spend $18 billion on programming in 2025 up from $17 billion in prior years with CFO Spencer Neumann saying that figure isn't a cap. It's also forecasting $8 billion in free cash flow for the year, a key number investors are watching closely. The Q1 lineup features returning hits like Black Mirror (Season 7) and You (Season 5), alongside new originals like Pulse and the Tom Hardy-led Havoc. Options markets are pricing in about a 9% stock move either way after the report a sign that while Netflix looks strong, expectations are already baked in. This article first appeared on GuruFocus. Sign in to access your portfolio
Broadcast Pro
13-03-2025
- Business
- Broadcast Pro
Netflix plans $18bn content investment for 2025
The $18bn cash content spending would be an 11% increase from last year's $16.2bn. Netflix is set to invest approximately $18bn in content production in 2025, marking an 11% increase from its $16.2bn budget in 2024. Chief Financial Officer Spencer Neumann announced the expanded spending, emphasising that the company is far from reaching a ceiling on its content investment. 'We're not anywhere near a ceiling. I think we are still just getting started,' he stated. The budget increase will fund a diverse lineup of high-profile projects, including The Electric State, a sci-fi film directed by the Russo Brothers and starring Millie Bobby Brown and Chris Pratt. The Russo Brothers, known for their successful collaboration with Netflix on The Gray Man, continue their partnership with this upcoming production. Additionally, Netflix is allocating substantial resources to its 'Extraction' franchise, Zack Snyder's Rebel Moon and Army of the Dead, as well as hit series like Wednesday and Bridgerton. The platform is also strengthening its offerings in documentaries, K-dramas, and anime to cater to its global audience. Netflix's strategic growth extends beyond content production. Following a period of strong revenue acceleration in 2024, with nearly 20% revenue growth and a six-percentage-point margin expansion, the company continues to focus on enhancing entertainment value while expanding revenue streams. Key initiatives include tackling account sharing and expanding its advertising business. Netflix's paid sharing model is now fully operational, and the advertising tier has seen significant adoption, with about 55% of new subscribers opting for the ad-supported plan in Q4 2024. Looking ahead, Netflix expects to double its advertising revenue in 2025, following a similar achievement in 2024. To support this growth, the company is launching a first-party advertising technology stack, set to roll out broadly starting in the US in April. This move aims to capture a share of the estimated $180bn addressable advertising market across Netflix's operating regions. As Netflix continues to scale, the company is also exploring new content formats, including live events and gaming. A major highlight of this strategy is its growing interest in live sports. Netflix made its debut in sports broadcasting by streaming two NFL games on Christmas Day 2024, drawing nearly 65m viewers. Encouraged by this success, the company is considering bidding for additional NFL broadcasting rights, including Sunday afternoon games, potentially challenging networks like CBS and Fox. However, major shifts in NFL broadcasting rights are unlikely before 2029, as current deals extend through 2033 with an opt-out option in 2029. 'Never say never,' Neumann said regarding future sports acquisitions. 'If there's a way to make economic and business sense for a broader package of sports, we remain open to it. But it's not something that's in our near-term horizon.' Despite mixed reactions from fans about streaming-based NFL broadcasts, Netflix's venture into live sports aligns with its broader strategy of diversifying content and engaging a wider subscriber base.
