Netflix Forecasts 2025 Revenue to Be at Least $43 Billion, up 11%+

Netflix is expecting to keep growing revenue at double-digit percentages in 2025.

In reporting Q3 2024 results that beat analyst forecasts, the company provided a forecast of revenue for next year: For 2025, Netflix is forecasting revenue of $43 billion-$44 billion, which would represent growth of 11%-13% compared with its 2024 revenue guidance of $38.9 billion. (Its projected revenue for next year is based on foreign-exchange rates as of Sept. 30, 2024.)

“We expect revenue growth to be driven by a healthy increase in paid memberships and [average revenue per member],” the company said in its quarterly shareholder letter. The majority of the revenue growth will come from customer gains, CFO Spence Neumann said on the earnings interview Thursday.

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In addition, Netflix said it’s targeting a 2025 operating margin of 28% vs. its forecast for 27% in 2024. “After delivering outsized margin improvement in 2024, we want to balance near-term margin growth with investing appropriately in our business. We still see plenty of room to increase our margins over the long term,” the company said in the letter.

While it is providing revenue and margin guidance for 2025, Netflix will no longer report subscriber numbers on a regular basis as of Q1 next year (and it already stopped providing quarterly sub forecasts) — numbers closely followed on Wall Street. That’s because, according to the company, other metrics like engagement and profitability better reflect its overall health.

Netflix’s free cash flow in Q3 totaled $2.2 billion, up from $1.9 billion in the year-ago quarter. For the full year 2024, the company anticipates free cash flow of $6.0 billion-$6.5 billion (assuming “no material swings in F/X rates”), up from approximately $6 billion due to its higher operating income forecast.

On the earnings interview, asked about capital allocation, Neumann said Netflix’s strategy is to prioritize “profitable growth” and reinvest in the business while maintaining ample liquidity, before returning capital to shareholders.

During the third quarter, Netflix repurchased 2.6 million shares for $1.7 billion, and it has $3.1 billion remaining under its existing authorization. The company also raised $1.8 billion in its “first investment-grade bond deal” during Q3, which it said will be used to pay down bonds that mature over the next 12 months.

As a result, Netflix’s total debt increased from about $14 billion in the prior quarter to $16 billion. However, net debt (total debt less cash and cash equivalents and short-term investments) decreased from $7.4 billion in Q2 to $6.8 billion at the end of Q3.