Netflix expects 2025 revenue to be at least $43 billion, up 11%

Netflix expects to continue to grow revenue by double-digit percentages in 2025.

Reporting third-quarter 2024 results that beat analysts’ forecasts, the company provided a revenue forecast for next year: For 2025, Netflix expects revenue of $43 billion to $44 billion. dollars, which would represent 11% to 13% growth compared to its 2024 revenue guidance of $38.9 billion. (Forecast revenues for next year are based on exchange rates as of September 30, 2024.)

“We expect revenue growth to be driven by a healthy increase in paid subscriptions and (average revenue per member),” the company said in its quarterly letter to shareholders.

Additionally, Netflix said it is targeting an operating margin of 28% by 2025 compared to its forecast of 27% in 2024. “After delivering huge margin improvement in 2024, we want to balance the growth of margin in the short term with adequate investment in our business. We still see a lot of room to grow our margins in the long term,” the company said.

Netflix’s free cash flow in the third quarter came in at $2.2 billion, up from $1.9 billion in the year-ago quarter. For the full year 2024, the company forecasts free cash flow of $6 billion to $6.5 billion (assuming “no material changes in F/X rates”), up from roughly $6,000 million due to its higher operating income forecast.

In the third quarter, Netflix bought back 2.6 million shares for $1.7 billion, leaving $3.1 billion under its current authorization. The company also raised $1.8 billion in its “first investment grade bond arrangement” in the third quarter, which it said will be used to pay down bonds maturing over the next 12 months.

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