Netflix (NFLX +0.96%) has come a long way from its DVD-by-mail days. Today, it's the world's largest streaming platform with over 300 million global subscribers and a proven ability to reinvent itself. The company's crackdown on password sharing, expansion into advertising, and disciplined content strategy have all helped reignite growth over the past two years.
But for investors, the question is less about what Netflix has accomplished and more about where the next phase of growth will come from. Looking ahead, three drivers stand out: advertising, international expansion, and content franchises.
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Advertising scale
Netflix entered the advertising market only two years ago, but it's already becoming a central pillar of growth. As of Q2 2025, about 94 million users -- nearly 30% of Netflix's subscriber base -- are on the ad-supported plan. Management also noted that ad revenue doubled last year and is on track to double again in 2025.
The significance of this shift is hard to overstate. Ads represent a high-margin revenue stream, giving Netflix more room to expand profitability without relying solely on subscription hikes. Unlike traditional broadcasters, Netflix offers global reach and detailed targeting capabilities, making it attractive to advertisers. To cement this position, the company is building its own capabilities through the Netflix Ads Suite, reducing its reliance on adtech partners and capturing more of the value chain.
If growth continues at this pace, advertising could eventually rival subscriptions as a significant revenue engine -- something unthinkable just a few years ago.
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Key Data Points
International expansion
Despite its size, Netflix's global opportunity is far from saturated. The U.S. and Canada remain mature markets, but Asia-Pacific and Latin America are emerging as the next frontiers. These regions are seeing faster subscriber growth, driven by a combination of localized content and more affordable pricing models. For perspective, both revenue in Asia-Pacific and Latin America grew 23% (FX-neutral) in Q2 2025, outperforming the U.S. region's 15% growth rate.
Hits like Squid Game from South Korea and Bad Influence from Spain have proven that global audiences will embrace non-English content when it's compelling. Netflix is leaning into this trend by investing in regional studios and talent, creating shows that can succeed locally and then break out globally.
Price sensitivity is also shaping Netflix's international strategy. For example, mobile-only and ad-supported plans appeal to consumers in emerging markets who might find the standard plan unaffordable. This flexibility allows Netflix to expand its footprint in countries where the streaming market is still in its early innings.
The math is straightforward: With billions of potential viewers in these regions and internet penetration still rising, international expansion could add tens of millions of new subscribers over the next few years.
The power of franchises
At its core, Netflix remains a content company, even as it evolves its business model. The platform's ability to deliver must-watch shows and movies is what keeps subscribers engaged month after month. But Netflix's approach to content is evolving -- it's not just about producing hits but about building durable franchises.
Franchises like Stranger Things, The Witcher, and Bridgerton have become cultural touchstones. Each has spawned spin-offs, multiple seasons, and even merchandise. This franchise model mirrors what Disney has long mastered: creating intellectual property that extends beyond a single release to build long-term engagement.
Focusing on fewer but bigger bets also improves cost efficiency. By concentrating spending on content that it can leverage across multiple formats, Netflix can achieve better returns on its production budget while keeping churn low.
Over time, these franchises could open the door to new revenue streams, whether through gaming tie-ins, live events, or consumer products. While these optional extensions are still small today, they reinforce Netflix's ability to deepen its relationship with viewers.
The bigger picture for investors
Taken together, these three drivers -- ads, international growth, and content franchises -- form the backbone of Netflix's next chapter. They build on the company's existing strengths while creating new opportunities.
The takeaway is clear. Netflix's story no longer hinges on its subscriber count. It's evolving into a business with multiple levers to drive both top-line expansion and margin growth. The key question isn't whether Netflix can grow -- it's how effectively the company can execute across these three critical areas.
With all this in mind, growth investors should watch Netflix closely.
