Netflix Raises Prices – Yet Beats Market Expectations

Netflix delivered a surprisingly strong performance in the first quarter of 2025, despite raising prices across all subscription tiers earlier this year.

The streaming giant reported revenue of $10.54 billion – slightly above analysts’ expectations of $10.52 billion.

For the first time, Netflix chose not to disclose specific subscriber numbers in its quarterly earnings report.

Instead, the company signaled a strategic shift: going forward, revenue and key financial metrics will be the primary indicators of success.

The significant increase in revenue – a nearly 13% rise compared to the previous year – was driven in part by higher income from both subscriptions and advertising.

At the end of January, Netflix raised the price of its standard plan to $17.99 per month, while the ad-supported plan increased to $7.99. The premium subscription now costs $24.99.

Despite the price hikes, most customers have chosen to stay, which has positively impacted the bottom line. Net income for the quarter came in at $2.89 billion – or $6.61 per share – up from $2.33 billion last year.

New Strategy: Greater Focus on Advertising

In April, Netflix launched its own ad tech platform in the U.S. The goal is to improve measurement, targeting, and ad formats – and ultimately create new revenue streams.

The company sees the new platform as a cornerstone of its future advertising business and expects to roll it out in more markets in the coming months.

“We believe our ad tech will be central to our long-term strategy,” Netflix stated in the quarterly report. “Over time, it will enable better measurement, improved targeting, innovative formats, and expanded programmatic capabilities.”

Headwinds in the Market – But Netflix Remains Resilient

While traditional media stocks have been under pressure due to economic uncertainty and the impact of President Trump’s trade policies, Netflix seems largely unaffected.

On the investor call, co-CEO Greg Peters said: “Based on what we’re seeing in day-to-day operations, there’s nothing particularly noteworthy to report.”

He added: “Historically, entertainment has performed relatively well during tough economic times. That’s true for Netflix as well, which has generally been quite resilient – even though our track record is shorter.”

Investors responded with optimism, sending the stock up about 2% in after-hours trading on Thursday.

Netflix expects second-quarter revenue to reach just over $11 billion – maintaining its full-year forecast of $43.5 to $44.5 billion. The streaming wars are far from over, but Netflix has clearly set a course focused on profitability – and so far, it seems to be working.

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