Netflix Reports Strong Third Quarter Financials, Adds 5.1 Million, Reaches 282.7 Million Global Members | News

Netflix beat most Wall Street consensus estimates in its third-quarter earnings, reporting net paid member additions of 5.1 million and a 14% year-over-year increase to 282.72 million.

Revenue increased 15.7% year-over-year to $9.83 billion, while earnings per share were $5.40, operating income was $2.9 billion, representing growth of 52 % year over year, operating margin was 29.6% and free cash flow was $2.19 billion.

In its letter to shareholders, Netflix said its advertising tier membership was up 35% quarter-on-quarter and that the ad tech platform was on track to do so in the fourth quarter in Canada and throughout 2025 to come onto the market.

The stock closed at $687.65 after rising slightly earlier in the day.

Just before the second anniversary of the launch of its advertising business, the streamer said that advertising is unlikely to be the primary revenue driver in 2025. However, advertising tier accounted for more than 50% of signups in available markets in the third quarter, while ad plan membership increased 35% quarter-over-quarter.

In its letter to shareholders, Netflix said it would increase prices in Spain and Italy starting Friday (October 18), and introduced price increases in several territories in the Europe, Middle East and Africa region and Japan earlier this month . The Basic plan was phased out in the third quarter in the US and France and will do so in the fourth quarter in Brazil.

Analysts have expected further price hikes as subscriber growth slows due to the ongoing crackdown on password sharing.

In terms of engagement, the company noted an audience of more than 600 million worldwide and an average viewership of about two hours per day per paying member. In the first three quarters of 2024, viewing hours per account holder household (excluding the impact of paid sharing) increased compared to the previous year.

Starting in 2025, Netflix will no longer report membership numbers quarterly, but will instead update when certain milestones are reached.

According to Netflix, Asia Pacific achieved 19% year-over-year revenue growth, leading all regions. There was good content in Japan, South Korea, Thailand and India.

Sales in Latin America increased 9% year-over-year, and the letter said that while recent price increases and a “weaker content lineup” accounted for a net decline of 100,000 paid members, membership growth “increased at the beginning of the fourth quarter of 2024 “I have recovered significantly again”.

The US and Canada, the most mature market, reported a 16% year-over-year revenue increase driven by 10% and 5% growth in average paid memberships and ARM (average revenue per member).

With a view to the content offering in the fourth quarter, the highlight is expected to be the second season of Squid gamethe boxing match between Jake Paul and Mike Tyson and two NFL American football games on December 25th.