How Will Netflix Stock React To Its Upcoming Earnings?
Netflix (NASDAQ:NFLX) is set to report its earnings on Tuesday, October 21, 2025. Revenues are likely to come in at about $11.50 billion for the quarter, per consensus estimates, up 17% compared to last year, while earnings are likely to stand at $6.94 per share, up from $5.40 in the year-ago period. Growth is expected to be driven by recent price increases as well as expanding advertising revenue. Earlier in 2025, Netflix bumped up the price of its popular 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 is likely to help improve ad capabilities and improve price realizations. Content spending is expected to rise over Q3 and Q4, particularly due to sports related streaming investments. That said, we expect margins to largely hold up for the quarter.
The company has $495 billion in current market capitalization. Revenue over the last twelve months was $42 billion, and it was operationally profitable, with $12 billion in operating profits and net income of $10 billion. While a lot will depend on how results stack up against consensus and expectations, understanding historical patterns might just turn the odds in your favor if you are an event-driven trader.
There are two ways to do that: understand the historical odds and position yourself prior to the earnings release, or look at the correlation between immediate and medium-term returns post earnings and position yourself accordingly after the earnings are released. 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 105% since its inception.
See earnings reaction history of all stocks
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 55% 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.
1D, 5D, and 21D Post Earnings Return
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 the 1D post-earnings return is positive. Here is some correlation data based on a 5-year and a 3-year (more recent) history. Note that the correlation 1D_5D refers to the correlation between 1D post-earnings returns and subsequent 5D returns.
Correlation Between 1D, 5D and 21D Historical 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 105% returns since inception.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates