California, October 18, 2024: In the third quarter of 2024, Netflix surpassed Wall Street’s forecasts by adding 5.1 million new members, primarily due to its expanding ad-supported service, which accounted for almost 50% of new members in areas where it is accessible.
After hours on Thursday, the company’s shares increased 4.8% as its performance was above the 4 million new subscribers expected.
The 8.76 million subscribers were added in the same period last year. However, this growth exceeded.
Netflix’s operating margin grew to 30% from 22% the previous year, and its revenue surged to $9.825 billion, which was somewhat higher than the $9.769 billion experts had predicted.
The company outperformed the consensus expectation of $5.12 per share, earning $5.40. Analysts voiced concerns about a decreasing rate of subscriber growth, particularly in the US, where the market seems to be approaching saturation, despite the favorable financial performance.
Netflix wants to draw attention to its profitability and revenue growth as it moves away from subscriber counts.
It will prioritize financial measures like revenue and profit margins starting in 2025 and stop reporting subscriber counts.
Netflix anticipates that advertising will play an important role in the ad-supported tier by 2026, making it a component of growth.
With the eagerly awaited comeback of the Korean drama Squid Game in December, Netflix anticipates more membership growth in terms of programming for the next holiday season.
Along with diversifying its content, the streaming behemoth intends to host live events, such as two National Football League games on Christmas Day and a boxing battle between YouTuber Jake Paul and Mike Tyson in November.
After implementing comparable price hikes in other European areas earlier this month, Netflix intends to increase its rates in Spain and Italy.
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Ted Sarandos, co-CEO of Netflix, reaffirmed the company’s dedication to improving its value proposition while rejecting the notion of combining reduced packages with other streaming services such as Disney and Warner Bros. Discovery.
Significant staff losses have also resulted from Netflix’s restructuring initiatives this year. Fifteen workers from the company’s film division were let go in April.
Approximately 10 employees in its film and television publicity departments were recently laid off in another wave of layoffs.
Natalie Bjelajac, VP of Domestic Publicity, is leading this reorganization, which is part of a larger trend of media businesses making cuts as a result of economic challenges.
Netflix is confident in its capacity to re-accelerate growth and hold onto its position as the industry leader in streaming, even as it continues to implement strategic changes such as price increases and staff cutbacks.
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