Netflix bets on ads, IP and a redesigned experience to power next phase of growth
As global growth slows, Netflix is betting on its new ad tech, live sports programming, and local-for-local content investments to drive its next phase. India, a price-sensitive but content-hungry market, will be key as the streaming giant scales its hybrid model globally.
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Netflix is leaning into advertising, local content investments and a redesigned user interface to secure its future, even as it continues to churn out global hits. The company reported 16% year-on-year revenue growth in Q2 2025, with a raised full-year revenue forecast to as high as $45.2 billion, reflecting the weakening dollar and what the company described as "healthy member growth" and “momentum in ad sales.”
"We've got healthy member growth, and that even picked up nicely at the end of Q2, a bit more than we expected," said CFO Spencer Neumann during the earnings call, adding that Netflix’s ad business is "on pace to roughly double our revenue in the year."
Ads: Netflix’s second growth engine
Advertising, which Netflix entered only recently, is emerging as a key pillar of its next growth phase. The company has completed the rollout of its proprietary Netflix Ads Suite globally, integrating with Yahoo’s DSP and targeting programmatic buyers.
“We've completed the rollout of our own ads tech stack, the Netflix ad suite to all of our ad markets now. So we're fully on our own stack around the world at this point,” said Co-CEO Gregory Peters. “The most immediate benefit from this rollout is just making it easier for advertisers to buy on Netflix.”
With upfront deals in the US nearly complete, Peters said, “Those results have generally been in line or slightly better than our targets and consistent with our goal to roughly double the ads business this year.”
A new look for a new Netflix
As Netflix pivots to live sports, gaming and interactive experiences, it has overhauled its interface for the first time in a decade, signaling a fundamental shift in how the platform thinks about user engagement.
“The previous experience was designed for the Netflix of 10 years ago, and the business has evolved considerably since then,” Peters said. “We got TV and film, more of those, of course, from around the world, but now also games and live events.”
The redesigned homepage includes real-time personalized recommendations, improving the discoverability of live events and localized programming. Peters emphasized the importance of the change, noting, “Helping our members understand that there's a really good reason for them to launch Netflix and tune in at 7:00 p.m. on a Friday night versus just showing up whenever they were free... we really need a different user interface to do that job well.”
Content and Live Events still core
Even as Netflix diversifies, content remains central to its strategy. With hits like Squid Game Season 3, KPop Demon Hunters and the upcoming finales of Stranger Things and Wednesday, the company aims to sustain its global leadership.
The company is also making a deliberate push into live events, having secured rights to an NFL Christmas Day doubleheader, boxing events and WWE programming. “Our live strategy and our sports strategy are unchanged. We remain focused on ownable big breakthrough events that... our audiences really love,” said Co-CEO Ted Sarandos.
He added that while live events represent a small fraction of viewership hours, “not all view hours are equal,” emphasizing their impact on conversation and retention.
Local for Local, and the India watch
Global ambitions remain undeterred, with Netflix announcing a €1 billion investment in Spanish content over the next three years, while also striking a content partnership with TF1 in France.
“The fundamental purpose for this TF1 partnership is all about that goal of expanding our entertainment offering,” said Peters. “We want to provide more content, more variety, more quality.”
While Netflix did not announce new India-specific initiatives in this quarter, its emphasis on “local-for-local” and ramping ad infrastructure will resonate in India, where CTV ad spends and hybrid revenue models are gaining ground.
GenAI and gaming as future bets
Netflix continues to explore generative AI to enhance content creation and user experience, using AI-powered tools in production and piloting conversational experiences on its platform.
In a notable first, Netflix used Generative AI to create a full VFX sequence in its Argentine hit El Eternaut, showing a building collapsing in Buenos Aires. This scene, delivered 10x faster than traditional methods, marks the first GenAI final footage to appear on screen in a Netflix original.
“Our creators were thrilled with the result. We were thrilled with the result. And more importantly, the audience was thrilled with the result,” said Sarandos, highligting how Netflix sees AI as a tool to “help creators make films and series better, not just cheaper.” The company believes such tools will expand storytelling possibilities while improving cost and speed, paving the way for more AI-powered production within its growing global slate.
Netflix is also investing in gaming with IP tie-ins like Squid Game: Unleashed and licensed titles like GTA, but monetization remains a longer-term opportunity. “We want to remain disciplined in not investing too far ahead of demonstrating that we know how to translate that investment into value for our members,” Peters said.
