In its second-quarter earnings report, the streaming giant disclosed operating income of $3.8 billion and a margin of 34.1 percent, up double digits from a year ago.Netflix is chugging along, growing its revenue and profit margins even as its competitors — except YouTube — struggle to keep their streaming services profitable.The streaming giant reported total revenues of $11.1 billion, operating income of $3.8 billion and a margin of 34.1 percent, all up double digits from a year ago, and all topping Wall Street estimates.Q2 is the second quarter in which Netflix is not releasing its subscriber figures, choosing instead to put its focus on revenue and income, as it experiments with different revenue models like advertising, and with the price of subscriptions in different markets remaining somewhat variable.It is also the first full quarter in which it has launched new price increases, including in mature markets like the U.S. Those price hikes, combined with consistent low churn, likely account for the strong margins.In its earnings letter, Netflix noted that its U.S. and Canada revenue grew by 15 percent in Q2 compared to 9 percent in Q1 thanks to the price increases.On the advertising front, Netflix said that it is nearly done with its 2025 upfront negotiations, and that it on track to “roughly double” its advertising revenue this year, though the specifics are still under wraps.The company is forecasting revenue of $11.5 billion, operating income of $3.6 billion, and operating margins of 31.5 percent in Q3, and updated its 2025 guidance for revenue to $44.8 billion-$45.2 billion, up from $43.5-$44.5 billion, and margins of 29.5 percent, up from 29 percent.When it comes to content, Netflix executives also tackled their competition with YouTube, which currently leads the Nielsen Gauge chart.“Look, we want to be in business with the best creatives on the planet, regardless where they come from. Some of them are here in Hollywood. Others are in Korea, some are in India, and some are creators that distribute only on social media platforms, and most of them have not yet been discovered,” Netflix co-CEO Ted Sarandos said on the company’s quarterly earnings call, when asked by Wells Fargo analyst Steve Cahall whether it would pursue exclusive deals with creators. “We largely agree with you and believe that working with a wide set of content creators makes a lot of sense for us. And as you said, if I’m remembering it right, not everything on YouTube will fit on Netflix, and we couldn’t agree with that more, but there are some creators on YouTube, like Ms. Rachel, that are a great fit.”“Not all hours are created equal, and we have a different profit model from other services, a strong profit model,” co-CEO Greg Peters added. “So we’re going to compete to win more moments of truth for sure, but especially compete to win those most profitable moments. And back to your specific question, it’s worth remembering, there’s about 80 percent of total TV view share that neither Netflix or YouTube are winning right now, we think that represents a huge opportunity for which we are competing aggressively, and we aim to grow our share.”
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