Netflix revealed Q2 2025 earnings on July 17, 2025, projecting full-year revenue between $44.8 billion and $45.2 billion, raising its midpoint by $1 billion. The operating margin target is now set at 30%, supported by strong member growth and significant ad revenue expected to double this year. The revised guidance benefits from favorable foreign exchange movements and consistent operating expenses. The completion of their ad tech rollout will enhance advertiser access and programmatic growth opportunities for increasing revenue.
Management cited 'healthy member growth,' with ad sales on pace to roughly double in 2025, while operating expenses remain steady, driving the operating margin target up to 30% for the full year and the FX-neutral margin up by 50 basis points for 2025.
So we are largely flowing through the expected higher revenues to profit margins. So that is why our updated target full-year reported margin is up a point from 29% to 30% and that 50 basis point increase in FX neutral margin is really just that revenue lift from stronger membership growth and ads relative to prior forecast flowing through the margin.
The revised full-year guidance reflects both beneficial foreign exchange (FX) movements and underlying business strength, lifting mid-point revenue projections by approximately $1 billion.
The April completion of the proprietary ad technology (ad tech) stack rollout now covers all of Netflix's global ad markets, with subsequent data signaling a seamless transition and measurable increases in programmatic ad buying.
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