How Will Netflix Stock React To Its Upcoming Earnings?

Netflix (NASDAQ:NFLX) is expected to report its Q2 2025 earnings on Thursday, July 17, 2025. Revenues are likely to come in at about $11 billion for the quarter, per consensus estimates, up 15% compared to last year, while earnings are likely to stand at $7.06 per share, up from $4.88 in the year-ago period. Growth is expected to be driven by recent price increases and expanding advertising revenue. Earlier this year, Netflix bumped up the price of its standard HD plan by $2.50 to $18 per month, while raising the price of the Premium plan to $25 per month. The company has also been focusing on improving its advertising technologies, launching its in-house ad tech platform in the U.S. in April. This could help improve ad capabilities and price realizations. Year-over-year revenue comparisons will also benefit from stronger subscriber numbers over the past year, partly fueled by the password-sharing crackdown and the launch of the ad-supported tier, although the boost from these initiatives may begin to taper off.

We will also be closely watching Netflix’s margins for the quarter. Netflix’s content costs are likely to rise this year. While Netflix has typically focused on scripted entertainment, it is now expanding into live sports, an area that may involve higher production costs and licensing expenses.

Netflix has $551 billion in current market capitalization. Revenue over the last twelve months was $40 billion, and it was operationally profitable, with $11 billion in operating profits and net income of $9.3 billion. That said, if you seek upside with lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

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Netflix’s Historical Odds Of Positive Post-Earnings Return

Some observations on one-day (1D) post-earnings returns:

• There are 19 earnings data points recorded over the last five years, with 8 positive and 11 negative one-day (1D) returns observed. In summary, positive 1D returns were seen about 42% of the time.
• Notably, this percentage increases to 64% if we consider data for the last 3 years instead of 5.
• Median of the 8 positive returns = 11%, and median of the 11 negative returns = -6.9%

Additional data for observed 5-Day (5D), and 21-Day (21D) returns post earnings are summarized along with the statistics in the table below.

Correlation Between 1D, 5D, and 21D Historical Returns

A relatively less risky strategy (though not useful if the correlation is low) is to understand the correlation between short-term and medium-term returns post earnings, find a pair that has the highest correlation, and execute the appropriate trade. For example, if 1D and 5D show the highest correlation, a trader can position themselves “long” for the next 5 days if 1D post-earnings return is positive. Here is some correlation data based on 5-year and 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.

Learn more about Trefis RV strategy that has outperformed its all-cap stocks benchmark (combination of all 3, the S&P 500, S&P mid-cap, and Russell 2000), to produce strong returns for investors. Separately, if you want upside with a smoother ride than an individual stock like Netflix, consider the High Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

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