The earnings season for tech giants kicks off with a bang! Netflix's Q1 performance exceeds expectations, with after-hours stock price rising over 5% at one point

According to the Zhitong Finance APP, streaming giant Netflix (NFLX.US) released its Q1 2025 financial report after the market closed on Thursday, with data significantly exceeding Wall Street expectations. Although the initial market reaction in after-hours trading was muted, the stock price quickly surged by over 4.4%, with gains at one point exceeding 5%.

According to the report, Netflix's adjusted earnings per share for the first quarter were $6.61, with revenue of $10.54 billion. In contrast, analysts surveyed by FactSet had expected earnings per share of $5.67 and revenue of $10.5 billion. The company also stated that it maintains its revenue forecast range for the full year 2025 at $43.5 billion to $44.5 billion, noting that "there has been no significant change in the overall business outlook since the last financial report."

Wall Street analysts generally believed before Netflix's performance announcement that the streaming giant was likely to demonstrate strong performance resilience amid macroeconomic uncertainty. Ultimately, Netflix's results showcased the tech giant's ability to exhibit relative resilience against the backdrop of a weak global macroeconomic environment. More importantly, Netflix's strong financial report signifies a "good start" for the earnings season of American tech giants. If other giants also report strong results, it is expected to drive a continued rebound in the Nasdaq and S&P 500 indices, which have been sluggish since March.

With the release of Netflix's financial report, it marks the beginning of the earnings season for American tech giants. As global stock markets, including the U.S. stock market, continue to be impacted by the "tariff pressure" from the Trump administration, the actual performance of tech giants, which hold significant weight in the Nasdaq Composite Index and S&P 500 Index, is crucial for these two indices to enter a rebound trajectory.

It is noteworthy that this is the first time Netflix has not updated its subscriber data in its financial report. Previously, this metric had been a key reference closely monitored by investors. In the fourth quarter of last year, Netflix added a net of 18.9 million paid subscribers, setting a historical high and significantly exceeding market expectations.

Nevertheless, the company stated in its letter to shareholders that "subscription and advertising revenue slightly exceeded expectations" this quarter, driving both revenue and operating profit above expectations. The operating profit for the first quarter reached $3.3 billion.

Netflix's stock price has risen 8% this year, with a nearly 60% increase over the past 12 months, far surpassing the performance of the Nasdaq Composite Index and S&P 500 Index. In a challenging environment for tech stocks, Netflix stands out as a "resilient performer."

UBS analyst John Hodulik pointed out in a report released on Monday that Netflix's record subscription growth in the fourth quarter, combined with price increases, has laid a solid foundation for growth this year. He specifically mentioned that the return of popular series such as "Stranger Things," "Squid Game," and "Wednesday" will further help the platform maintain user stickiness. He gave Netflix a "Buy" rating with a target price of $1,140, indicating a 19% upside from Wednesday's closing price.

Advertising revenue is also an important pillar for Netflix's new round of growth. Wedbush analyst Alicia Reese stated in a report last week that "with the introduction of more live content, improvements in advertising solutions and delivery efficiency, and the expansion of content strategies, Netflix is expected to continue to expand the revenue contribution from its advertising layer in the coming years." She believes that growth in 2024 will be driven by subscription users, in 2025 by price increases, and in 2026 by advertising revenueShe rated Netflix's stock as "outperform," with a target price of $1,150.

Netflix co-CEO Gregory Peters revealed during the January earnings call that advertising revenue doubled year-on-year in 2023, and the company expects to achieve another doubling in 2024