By Jessica Toonkel

Higher-than-expected subscription and ad revenue helped Netflix beat its forecast for core metrics, including revenue and its operating margin, in the first three months of the year.

The company reported $10.5 billion in revenue in the first quarter, up 12.5% year-on-year. Net income rose about 24% to $2.9 billion, beating its forecast of $2.44 billion.

The streamer -- home to hits like "Adolescence," Shonda Rhimes' "The Residence" and live broadcasts of WWE's "Raw" wrestling show -- said it expects stronger revenue growth in the second quarter. It expects to benefit from recent price increases, continued membership growth and fresh advertising revenue.

While many companies are bracing for the impact from a global escalation in tariffs, Netflix has been somewhat protected. When families cut back on major entertainment expenses outside of their homes, analysts say they tend to keep subscriptions like Netflix that can offer in-home TV and movie viewing.

This is the first quarter in which the streaming giant is not disclosing quarterly subscriber numbers and average revenue per member, a change it said it made to focus Wall Street on revenue and profits. It said revenue growth during the period was driven in part by membership growth.

Netflix ended the fourth quarter with 301.6 million subscribers. The Wall Street Journal recently reported that the company has robust internal growth ambitions for the coming years. Executives have told staff that they aim to double revenue to about $80 billion by 2030 and increase global ad sales to about $9 billion.

In January, Netflix raised prices across its existing U.S. plans. Its ad supported tier now costs $7.99 a month, and its premium tier is $24.99.

The company's operating margin rose to 31.7% in the first quarter, from 28.1% a year earlier, above the 28.2% it projected.

Free cash flow rose 25% to $2.7 billion during the period. The company said its revenue and profit growth outlook remained solid and did not change forecasts for revenue or operating margins.

Netflix shares are up more than 58% over the last 12 months, and the company has expanded its lead as the dominant streamer. It has continued to broaden its offerings, including with content from YouTube stars, live events and games.

Write to Jessica Toonkel at jessica.toonkel@wsj.com

(END) Dow Jones Newswires

April 17, 2025 16:02 ET (20:02 GMT)

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