Netflix (NFLX) delivered a standout performance in Q2 2025, underscoring its momentum with robust revenue growth, expanding margins, and continued global subscriber engagement. Total revenue rose 16% year-over-year to $11.08 billion, slightly exceeding guidance thanks to favorable foreign exchange movements. Operating leverage was on full display, with operating income surging 45% to $3.78 billion and the operating margin climbing to 34.1%, up from 27.2% a year ago. Net income jumped to $3.13 billion, a significant increase from $2.15 billion in Q2 2024, while diluted EPS rose 47% to $7.19.

Cash generation was equally impressive. Free cash flow nearly doubled to $2.27 billion, and net cash from operating activities reached $2.42 billion, both sharply higher than the prior-year period. Regionally, growth was broad-based, led by APAC revenue up 24%, followed by EMEA (+18%), UCAN (+15%), and LATAM (+9%). All regions posted double-digit gains on a foreign exchange-neutral basis.

Subscriber growth outpaced expectations, albeit skewed toward the latter part of the quarter, limiting immediate revenue impact. Over 95 billion hours of content were watched in the first half of 2025—a 1% increase year-over-year—with non-English titles accounting for more than one-third of all viewership. Breakout hits included “Squid Game S3” (122M views), “Tyler Perry’s STRAW” (109M), and “Exterritorial” (89M), with Korean and Spanish-language content continuing to resonate globally.

Looking ahead, Netflix projects Q3 revenue of $11.53 billion (+17% YoY) and an operating margin of 31%, up two points from last year. The company raised full-year guidance, now expecting revenue of $44.8–$45.2 billion (15–16% YoY growth) and a 30% operating margin on a reported basis. Free cash flow is forecast to reach $8.0–$8.5 billion for the year.

On the capital side, Netflix ended the quarter with $14.5 billion in gross debt and $8.2 billion in cash, repurchased 1.5 million shares for $1.6 billion, and initiated a $3 billion commercial paper program to enhance liquidity. It also paid down $1.0 billion in senior notes, continuing its focus on balance sheet discipline and shareholder returns.

The company made notable progress in its advertising and product initiatives. It completed the rollout of its proprietary Netflix Ads Suite, with ad revenue expected to double in 2025, and launched a redesigned TV homepage—already adopted by half of its member base, with strong early engagement. Strategic investments also continue, including a €1 billion commitment to Spanish content through 2028 and new partnerships in France.

Management remains bullish on the back half of the year, citing a compelling content pipeline—highlighted by “Wednesday” Season 2, the “Stranger Things” finale, and major live events—as well as steady progress in monetization, international expansion, and the scaling of its ad business. Netflix reaffirmed its commitment to profitable growth, margin expansion, and returning capital to shareholders.