What about tariffs? Netflix's earnings hit a record high, and its stock price is still up 9% this year

Video streaming platform Netflix announced its first-quarter earnings, with EPS up 25% to $6.61 per share, easily beating analysts' expectations. Sales grew to $10.5 billion, driven by recent price increases and a series of popular shows, such as the hit British series Adolescence ( Chaos Boyhood ).

Tariffs can't hit Netflix, setting the best quarterly results

At a time of extreme economic instability and challenges for traditional film and television businesses, investors see Netflix as a safe bet. The company, which has more than 700 million users worldwide, said President Trump's tariffs or the ensuing market volatility have not had an impact on its business. After all, tariffs are imposed on goods, and Netflix sells subscription fees and advertising revenue, not in this wave of tariff fire.

However, there are also concerns that recession fears caused by the tariff war will affect users' subscriptions, but co-CEO Greg Peters said on a conference call with analysts: "We are closely watching consumer sentiment and the direction of the overall economy." Based on what we've seen, there's nothing noteworthy."

Peters said the entertainment industry has remained resilient during past recessions, and Netflix has introduced lower-priced subscription plans that offer another option for consumers who want to save money.

Original programming continues, expanding investment in programming outside the United States

Although Netflix used to spend a lot of money to fund its growing number of shows, the company now realizes billions of dollars in profits and free cash flow. The company expects a strong quarter, with sales up 15 percent to $11 billion and earnings per share up 44 percent to $7.03, both above Wall Street's forecast.

It was Netflix's best quarter ever. As of 2024, Netflix added 18.9 million customers. Most analysts expect the company's growth to slow in 2025, especially after it raises prices in the United States, its largest market.

As subscriber growth slows, Netflix is looking to make more money from existing customers by selling ads and raising prices. The company is rolling out new ad technology in the markets where it offers advertising and says it will raise prices for its services in France.

The company's performance has long been determined by the quality of its original programming, which this month also includes a new season of Night Intelligence and WWE Raw's debut. Costs will rise in the second half of the year as more movies will be released and new seasons of popular TV series such as Stranger Things will be released.

In its quarterly letter to shareholders, the company touted its programming investments outside the United States ( particularly the United Kingdom and Mexico ). He also called the new Mexican film "Counterattack" one of the most popular foreign-language films in Netflix's history.

Netflix is up 9% year-to-date

Netflix's stock price rose more than 3% in after-hours trading after the earnings report, breaking the $1,000 mark. Under the impact of the tariff war, there is still a 9% increase so far this year, compared with the S&P 500's decline of 10% and Nasdaq's decline of 13%, which is a very good performance.

At a time when the tariff war may not stop in the short term, investors can also take the opportunity to consider which stocks have a solid moat or are less vulnerable to tariffs like Netflix.

Source: CNBC

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