Netflix: Current Growth Initiatives And FCF Expansion Does Not Justify Valuation Premium

  • In 2Q25, Netflix's revenue grew by 16% year-on-year to $11.08 billion. During this period, margins expanded substantially. Operating and net income grew by 45.02% and 45.55%. Despite its maturing business, NFLX's current initiatives, such as its local for local strategy and Netflix Houses, will continue to support the company's topline growth. Although competition intensified, NFLX has managed to defend its position and emerge as a FCF powerhouse. Currently, NFLX has a FCF margin of 20.37%, outperforming the industry average of 9.85%.