Netflix's latest 10-Q report for the first quarter of 2025 reveals some key financial performance highlights. The company reported a revenue of $10.54 billion, marking a 13% increase from the same period in 2024. Operating income for the quarter stood at $3.35 billion, representing a 27% increase from the previous year. The operating margin also saw a substantial improvement, reaching 31.7% compared to 28.1% in the first quarter of 2024.
Net income for the first quarter of 2025 amounted to $2.89 billion, reflecting a 24% increase from the same period in 2024. The growth in net income was primarily driven by a $714 million increase in operating income, which was in turn fueled by a $1.17 billion rise in revenues. However, this growth was partially offset by a $286 million increase in cost of revenues, mainly due to higher content amortization.
The report indicates that Netflix has discontinued the quarterly reporting of membership numbers, shifting its focus to revenue and operating margin as the primary financial metrics. The company derives its revenues primarily from monthly membership fees for streaming content, with pricing plans ranging from $1 to $31 per month as of March 31, 2025.
In terms of geographical revenue distribution, the United States and Canada (UCAN) contributed $4.62 billion, marking a 9% increase from the same period in 2024. Europe, Middle East, and Africa (EMEA) generated $3.40 billion, representing a 15% increase, while Latin America (LATAM) and Asia-Pacific (APAC) contributed $1.26 billion and $1.26 billion, respectively, with growth rates of 8% and 23% compared to the first quarter of 2024.
The report also highlights the company's focus on enhancing its content offerings and service, as well as its global expansion within the parameters of its operating margin target. Netflix aims to continuously improve its members' experience by offering compelling content and a range of pricing plans to meet various consumer needs.
In terms of expenses, the cost of revenues increased by 6% to $5.26 billion, primarily due to a $152 million rise in content amortization. Sales and marketing expenses increased by 5% to $688 million, driven by higher personnel-related costs and expenses related to the company's advertising offering. Technology and development expenses saw a 17% increase to $822 million, primarily due to higher personnel-related costs. General and administrative expenses rose by 4% to $421 million, mainly attributed to increased third-party expenses.
Interest expense for the quarter amounted to $184 million, reflecting a 6% increase from the first quarter of 2024, primarily due to the rise in debt. Meanwhile, interest and other income (expense) stood at $50.9 million, representing a significant decrease from the same period in 2024, primarily attributed to foreign exchange gains and losses.
The market has reacted to these announcements by moving the company's shares 1.2% to a price of $973.03. For the full picture, make sure to review Netflix's 10-Q report.
