Netflix Pops as Earnings Top Estimates. Are Tariffs a Threat?Netflix NASDAQ:NFLX dropped its first-quarter earnings Thursday after market close and the headlines practically wrote themselves: a record net income, an earnings beat, and a 3% implied jump for the stock at the opening bell. All in a market where the Nasdaq is crying in the corner.
But as always in markets, the big question isn’t “What happened?”—it’s “What could mess this up?”
Ready, set, action: steep tariffs, Donald Trump, and the looming threat of a recession-fueled advertising freeze.
Let’s break down the earnings binge before we channel surf over to the risk segment. Spoiler: Netflix is on a roll—but geopolitical static might still mess with the signal.
🎬 Netflix Hits Record Numbers
The earnings season is picking up the pace. Netflix’s Q1 revenue hit $10.5 billion, up 13% from last year, with net income jumping to a record $2.9 billion. That’s a cool $600 million more than the same quarter last year—and a massive flex with earnings per share at $6.61. Wall Street was only expecting $5.71 a pop.
More importantly, the company raised its full-year revenue forecast to the range of $43.5 billion and $44.5 billion.
💿 How Many New Subs?
In case you're hunting for sub numbers moving forward—don’t bother. Netflix said last quarter they’re done reporting them quarterly. They’d rather focus on what “really matters”: revenue, operating margin, and ad growth.
In Q4 2024, the final quarter with a subscriber growth update, the company pulled off its biggest user-count gain ever: 19 million new accounts , bringing the global total to over 300 million. Not a bad way to drop the mic and ghost the group chat.
🍿 The Ads Are Working. So Are the Price Hikes.
In a move that would usually send churn metrics on a downhill slope, Netflix in January bumped its top-tier plan to $24.99/month in the US. Either that speaks volumes about content quality, or we’ve all collectively accepted that we’ll pay any price to avoid commercials.
That said, ads are quietly becoming Netflix’s next big profit lever. After a rocky launch in late 2022, the ad-supported tier is now gaining serious traction. According to estimates, 43% of new US sign-ups in February 2025 opted for the ad-tier plan, up from 40% in January. Netflix expects to nearly double ad revenue this year.
📺 Is Netflix Recession-Proof?
With interest rates high relative to four years ago, consumer wallets stretched, and geopolitical tension ratcheting up, Netflix Co-CEO Greg Peters had to address the elephant in the earnings room: what happens if people stop spending?
Streaming should survive the storm. As he put it, “Entertainment has historically been pretty resilient in tougher economic times.”
Executives also noted that during downturns, people tend to seek value. Netflix, with its endless scroll, becomes the budget-friendly indulgence of choice. It’s hard to argue with that when you’re five episodes deep into a true-crime docuseries at 3 a.m.
👀 But Then There’s That Nagging Tariff Thing...
While Netflix has so far been insulated from the direct hit of Trump’s revived trade war—most of its costs are content, not commodities—it’s not immune to broader market impact. Tariffs could rattle advertisers, especially if they trigger inflation spikes, slowdowns, or investor anxiety.
Ad budgets are notoriously skittish in volatile times, and if there’s one thing advertisers hate more than bad CPMs, it’s uncertainty. Already, there's chatter that major brands are planning to trim digital spending heading into the second half of the year.
Translation: if tariffs lead to an economic wobble, Netflix’s ad revenue (and by extension, its bullish earnings story) could face a tougher climb.
📢 Leadership Shuffle: No Drama, Just Strategy
In other corporate news, Reed Hastings, the co-founder who brought us DVD mailers, quietly transitioned from executive chair to non-executive chair. It’s more ceremonial than sensational, but it marks a passing of the torch to the current co-CEOs, who clearly have things under control—if this earnings report is any indication.
❤️ Wall Street Loves It—for Now
Netflix NASDAQ:NFLX shares are up 10% year to date, which looks especially shiny next to the Nasdaq’s NASDAQ:IXIC 16% drop. While tech has wobbled under tariff pressure and chip-stock drama ,
Netflix is moving in the opposite direction—proof that profitability, pricing power, and content diversity are still pulling in fresh capital inflows.
But don’t get too comfortable. If tariff fears escalate or ad momentum stalls, Netflix may need to prove all over again that it’s more than just a pandemic darling turned pricing juggernaut.
🎥 Final Frame: Chill Now, but Keep One Eye on Macro
Netflix’s Q1 numbers were promising — but that was just before Trump’s sweeping tariffs rattled global markets.
Added levies, recession risk, and shifting ad budgets could all become plot twists in Netflix’s otherwise upbeat storyline. For now, though, it’s lights, camera, rally.
Your turn: Are you still bullish on Netflix, or are Trump’s tariffs and economic drama changing your channel? Let us know what’s on your watchlist.
