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Netflix executives say the company is well-placed to withstand any potential economic slowdown arising from global trade tensions, as new subscribers continue to sign up despite increasing signs of consumer caution.
“Entertainment has historically been pretty resilient in tougher economic times,” said Greg Peters, co-chief executive, on Thursday. “We’re paying close attention to consumer sentiment and where the broader economy is moving but based on business right now there is nothing significant to note.”
Netflix shares have performed well this year, rising 10 per cent while the tech-heavy Nasdaq Composite has fallen 16 per cent partly because of concerns about US President Donald Trump’s tariff policies. The video streaming company’s stock jumped another 2.3 per cent in after-hours trading in New York on Thursday.
Netflix’s optimism was backed by strong first-quarter results, which showed a customer base that continued to grow even after it raised prices on US customers in January to as much as $24.99 a month for the top tier. The company said it expected “healthy member growth, higher subscription pricing and a rough doubling of our ad revenue” for the full year.
Netflix reported net income was $2.9bn, up from $2.3bn a year earlier, on revenue of $10.5bn. Its earnings per share of $6.61 were ahead of Wall Street forecasts of $5.71.
The company made no reference in its shareholder letter to Trump’s tariffs, which have roiled many US companies. Netflix is holding to its full-year forecast of $43.5bn-$44.5bn in revenue.
In the first quarter, Netflix reported better than expected subscriber growth, which helped push its earnings up by 24 per cent. Viewers flocked to watch the psychological crime series Adolescence, live streams of WWE wrestling and Back in Action starring Cameron Diaz and Jamie Foxx.
Netflix announced last year that it would no longer disclose its quarterly subscriber figures, long a crucial metric for investors. Instead, it wants to shift focus to revenue, operating margin and other metrics. In a letter to shareholders, the company said its subscription and advertising revenue was slightly higher than forecast. It has more than 300mn subscribers worldwide.
In January, it reported 19mn new subscribers — its biggest gain in quarterly subscribers in its history as it added live sporting events to its programming mix.
Netflix’s strong share performance this year contrasts with traditional media stocks such as Paramount, Comcast and Walt Disney, which have come under scrutiny by Brendan Carr, Trump’s head of the Federal Communications Commission.
The company also said co-founder Reed Hastings had left his post as executive chair to become the board’s non-executive chair.