Like the now No. 1 hit song from Netflix’s animated musical film “KPop Demon Hunters,” everything seems golden for the streaming platform.
Its member base is growing despite Netflix increasing its subscription pricing, and ad revenue is also on the rise.
Netflix, which reported its Q2 earnings on Thursday, generated more than $11 billion in overall revenue last quarter, up 15.9% year over year. That growth rate is consistent with previous quarters, aside from a slight dip to 12.5% growth in Q1.
Although Netflix doesn’t typically share its ad revenue numbers, CFO Spencer Neumann told investors that advertising still makes up a “pretty small” portion of overall revenue.
However, ad sales have already grown ahead of expectations for this time of the year, he added, and are still on track to double by the end of 2025.
How it’s done, done, done
As Netflix promised during its upfront presentation, the Netflix Ad Suite is now available across all 12 ad-supported countries: the US, UK, Canada, Australia, Brazil, France, Germany, Italy, Japan, Mexico and South Korea.
After what Co-CEO Greg Peters called a “generally smooth” rollout across these markets, Netflix has already seen an increase in programmatic buying and received positive feedback from advertisers who like the ease of being able to buy ads directly.
Moving forward, Netflix plans to introduce more demand sources (like with their recent Yahoo DSP partnership, for example), and work with advertisers and other third-party data sources to improve targeting, measurement, personalization and interactivity, said Peters.
And speaking of upfronts, Netflix has already closed most of its major agency deals for the season, according to its Q2 letter to shareholders. So far, said Peters, results have been at or slightly above Netflix’s target goal.
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But now that Netflix is closing ad deals, it needs to deliver engagement.
During the presentation on Thursday, one investor aired concerns that average engagement is down on a per member basis. During the first half of 2025, Netflix subscribers watched more than 95 billion hours of content, which only marked a 1% increase year over year.
One reason for that metric’s modest showing is because of the way Netflix measures engagement on a household basis, suggested Peters, by excluding shared or borrowed accounts. This has kept engagement “relatively steady” over the past few years, he said.
Even so, Netflix expects a stronger back half to the year where engagement is concerned, citing returning series and highly anticipated film titles like “Stranger Things” and “Happy Gilmore 2,” as well as live broadcasts, such as the Canelo vs. Crawford boxing match in September.
Now that most of the kinks have been worked out of the platform’s live broadcasting capabilities, said co-CEO Ted Sarandos, Netflix’s goal is to eventually expand to events outside the US.
It’ll have some help, though.
Just like how Netflix relies on other studios to help produce its in-house original content – Netflix’s latest success, “KPop Demon Hunters,” was produced by Sony Pictures Animation – the streamer plans to continue working with broadcast partners for live events, like CBS for the NFL Christmas Day games.
“We think about it as a scaling tool, not back filling some lack of ability in some area of the company,” said Sarandos.
Although there might still be a few kinks to deal with.
“When we start something new, we pretty much expect that we’re not going to be brilliant at it at the beginning,” added Peters. “Our job is to get out there and learn by doing.”
