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. Most of the revenue growth will come from customer gains, Chief Financial Officer Spence Neumann said on Thursday’s earnings call.

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.