🌏 Netflix’s $10 billion play

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Image for article titled 🌏 Netflix’s $10 billion play — Photo: Chesnot (Getty Images)

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Ad enough yet?

Netflix used to treat ads like a contagion. Now it’s building a multibillion-dollar business on them.

What began as a reluctant pivot — an ad-supported tier launched in 2022 amid subscriber slowdowns and rising competition — has turned into a growth engine. As of mid-2025, that ad-supported plan boasts more than 94 million global monthly active users, more than double last year’s count. Nearly half of subscribers in eligible markets are opting into the ad tier.

The appeal? Cheaper subscriptions in exchange for commercials. For Netflix, the trade-off is even better: a potential $10 billion ad business by 2030. Analysts at Jefferies just raised their price target to $1,400, citing the “infancy” of the company’s ad operations.

That kind of revenue doesn’t just pad margins. It creates flexibility.

Netflix can steer users toward its ad tier instead of raising prices across the board — though it did that, too, earlier this year, with minimal churn. And with partnerships in programmatic ad sales, a global ad-tech platform in the works, and a slate that includes “Squid Game” and NFL games, Netflix is positioning itself as the premium streaming platform for advertisers.

The irony? In trying to avoid becoming TV, Netflix might have quietly reinvented it. As the credits roll on the first chapter of the streaming wars, Netflix is already filming the next one. And this time, it comes with commercial breaks. Quartz’s Shannon Carroll has more on how Netflix is bingeing on revenue.

Lululemon gets stretched thin

Lululemon’s fiscal first quarter was fit, flexible — and Wall Street still wasn’t buying it.

Shares of the athleisure giant plunged 20% in premarket trading Friday, erasing nearly $8 billion in market value, despite the company delivering what most would consider a healthy quarter. Revenue rose 7% to $2.4 billion, and growth was broad-based: Same-store sales nudged upward, margins expanded, and international sales (especially in China) sprinted ahead. Even the product mix kept up its downward dog.

But investors zeroed in on one unwelcome adjustment: Lululemon revised its full-year profit guidance downward, largely due to expected tariff impacts in the back half of the year. CEO Calvin McDonald pointed to a larger-than-anticipated hit from trade policy, noting an increase in expected operating margin compression from 100 to 160 basis points.

That means tighter profits in the second half, even for a company that can cater to customers who think a $125 athletic dress is recession-proof.

The cautionary tone raised eyebrows. Analysts, including those at Morgan Stanley, have warned that apparel and footwear retailers are particularly vulnerable in the current trade environment, with fewer suppliers able — or willing — to absorb rising costs. While high-income shoppers might not blink at price hikes, Wall Street clearly did.

The stock may bounce back. But for now, investors are treating Lululemon less like a core goal and more like a stretch one. Quartz’s Catherine Baab has more on what happens when guidance gets out of shape.