Netflix reported strong financial performance in its latest 10-Q, with revenues for the first quarter of 2025 reaching $10.5 billion, marking a 13% increase from the same period in 2024. The company's operating income also saw a significant rise, reaching $3.35 billion, a 27% increase from the previous year. Net income for the quarter was reported at $2.89 billion, reflecting a 24% increase from the first quarter of 2024.
The company's operating margin for the first quarter of 2025 increased by approximately four percentage points compared to the same period in 2024, primarily due to revenues growing at a faster rate than the growth in cost of revenues, sales and marketing, and general and administrative expenses.
Netflix's revenues are primarily derived from monthly membership fees for streaming content services, with pricing on plans ranging from $1 to $31 per month as of March 31, 2025. The company also earns revenues from advertisements presented on its streaming service, consumer products, live experiences, and other sources. Revenues from sources other than monthly membership fees were not a material component of revenues for the first quarter of 2025 and 2024.
Regionally, the United States and Canada (UCAN) contributed $4.62 billion in revenues, marking a 9% increase from the same period in 2024. Europe, Middle East, and Africa (EMEA) generated $3.40 billion in revenues, reflecting a 15% increase, while Latin America (LATAM) and Asia-Pacific (APAC) contributed $1.26 billion and $1.26 billion in revenues, respectively, with both regions showing increases of 8% and 23% compared to the first quarter of 2024.
The company's cost of revenues increased by $286 million, primarily due to a $152 million increase in content amortization relating to existing and new content. Sales and marketing expenses increased by $34 million, driven by a growth in advertising sales headcount and expenses incurred in connection with the company's advertising offering. Technology and development expenses saw a significant increase of $120 million, primarily due to a rise in personnel-related costs. General and administrative expenses rose by $17 million, mainly due to an increase in third-party expenses.
Interest expense for the first quarter of 2025 was $184 million, primarily consisting of interest on the company's outstanding debt obligations. Interest and other income (expense) amounted to $50.9 million, reflecting a decrease from the same period in 2024.
The market has reacted to these announcements by moving the company's shares 1.2% to a price of $973.03. Check out the company's full 10-Q submission here.
