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Netflix Confident Of Its 'Incredible Entertainment Value' As Recession Fears Intensify, Greg Peters Says $7.99 Ad Plan Engagement Remains 'Strong And Healthy'

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Netflix Confident Of Its 'Incredible Entertainment Value' As Recession Fears Intensify, Greg Peters Says $7.99 Ad Plan Engagement Remains 'Strong And Healthy'

Netflix Inc.'s (NASDAQ:NFLX) Co-CEO Greg Peters has reassured investors that the company remains confident in its low-cost ad plan, despite ongoing market volatility and concerns over a potential recession fueled by new tariffs.

What Happened: On Thursday, during Netflix's first-quarter earnings call, Peters addressed questions regarding the broader economic environment and consumer behavior.

With fears of a recession looming, partly driven by President Donald Trump's tariffs, many wondered whether Netflix's low-cost ad tier, priced at $7.99 in key markets like the U.S. and Canada, would still perform.

He responded, "We haven't seen any significant changes in planned mix or planned take rate," referring to their recent price adjustments. "Engagement remains strong and healthy."

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Peters noted that entertainment has historically been resilient during tougher economic times, and Netflix has seen this trend hold up so far. Introducing a low-cost ad-supported plan has provided added flexibility, giving Netflix more resilience in uncertain times.

“We represent an incredible entertainment value,” Peters continued, adding that the low-cost plan, combined with Netflix's content and engagement, allows the company to remain competitive.

Netflix co-CEO Ted Sarandos also said that the streaming giant is focusing on what it can control. "We’re not changing anything in the forecast."

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Why It's Important: Netflix reported first-quarter revenue of $10.54 billion, marking a 12.5% increase compared to the same period last year. The figure came in slightly ahead of Wall Street expectations, which stood at $10.52 billion, according to Benzinga Pro.

The company projects second-quarter revenue of $11.04 billion — a 15.4% year-over-year jump — with earnings per share expected to reach $6.61.

Netflix also reaffirmed its full-year revenue forecast, targeting between $43.5 billion and $44.5 billion.

Earlier, Netflix was flagged as a promising investment by a Seeking Alpha analyst, who pointed to its strong digital, consumer-focused business model and compelling value proposition as key factors.

Global markets have experienced sharp fluctuations following the introduction of new trade tariffs by President Donald Trump. Previously, it was reported that the escalating trade tensions between the U.S. and China triggered a significant downturn in U.S. markets, wiping out $5 trillion in market value from S&P 500 companies.

Price Action: Netflix shares rose 1.19% on Thursday, extending an upward trend that has pushed the stock up nearly 9.73% year-to-date. Over the past 12 months, Netflix has surged by 58.55%.

The streaming giant currently holds a growth score of 69.80%, as per Benzinga Edge Stock Rankings. Click here to see how it stacks up against other major players in the entertainment and tech sectors.

Photo Courtesy: Frame Stock Footage on Shutterstock.com

Check out more of Benzinga’s Consumer Tech coverage by following this link.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

 

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