Netflix Blows Past Earnings Estimates As Subscribers Jump 16%

Netflix has delivered impressive results in its first quarter of 2024. Here are the key highlights:

• Earnings per share (EPS): Netflix exceeded expectations, reporting $5.28 per share, surpassing the estimated $4.52 per share expected by LSEG.
• Revenue: The company’s revenue reached $9.37 billion, outperforming the anticipated $9.28 billion expected by LSEG.
• Total memberships: Netflix’s subscriber base grew significantly, reaching 269.6 million, exceeding the projected 264.21 million according to Street Account.
• Net income: Netflix achieved $2.33 billion, or $5.28 per share, compared to the prior-year period’s $1.30 billion, or $2.88 per share. The company’s revenue for the quarter stood at $9.37 billion, a substantial increase from the year-ago quarter’s $8.16 billion.

The company added 9.33 million subscribers in the first quarter, more than five times the number of customers it added during the same period a year earlier, with its efforts to limit password sharing continuing to bear fruit. Netflix began limiting password sharing in earnest about a year ago. 

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Netflix has spent the last year limiting account sharing, working to expand its ad business and changing its line-up of prices and plans to better position itself for future growth. It plans to stop providing investors quarterly membership numbers and the average revenue generated per member early next year because it now has multiple pricing tiers in a variety of markets, and will add annual revenue guidance.

Netflix is strategically transitioning from emphasizing subscriber growth to focusing on profitability. To achieve this, they have implemented measures such as price hikes, addressing password sharing, and introducing an ad-supported tier. Investors are keen to see how these efforts impact Netflix’s performance and are also curious about the company’s venture into video games. Additionally, Netflix’s partnership with TKO Group Holdings to bring WWE content to the platform and its potential expansion into live sports offerings have piqued interest.

As of now, Netflix’s stock has seen remarkable growth, with a 27% increase year-to-date and approximately 85% growth over the last 12 months. These results demonstrate the streaming giant’s resilience and continued appeal to audiences worldwide

Netflix said Thursday it will no longer report quarterly membership numbers and average revenue per membership starting in the first quarter of 2025.

This is a significant change for the company and for the so-called “streaming wars,” which have largely been defined by a race for customers. Netflix wants investors to judge the company by the same metrics executives view as “our best proxy for customer satisfaction,” the company said in its quarterly shareholder letter.