Netflix Adds 5M Subscribers As Profits and Margins Soar

Alex Weprin
2-min read

Netflix reported its third-quarter earnings Thursday, adding 5 million subscribers as its status as subscription streaming TV’s dominant platform remains unchallenged.

The company now has 282.7 million million global subscribers. Netflix will stop reporting subscriber numbers and average revenue per member beginning in the first quarter of 2025, a timeframe that is quickly approaching.

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Netflix reported revenue of $9.83 billion and operating income of $2.91 billion, both up substantially from a year earlier, and each beating Wall Street expectations. Netflix’s operating margin was 30 percent, compared to 22 percent a year ago.

The Street had been expecting revenue of $9.76 billion and earnings per share of $5.12, and total subscriber count to top 282 million.

In its quarterly shareholder letter, the company spent a significant amount of space to its content and its advertising tiers, with plans to significantly expand in both areas.

On the programming front, the company said that engagement with its programming “is healthy,” and that it plans to grow its share of the streaming pie by investing even more into its TV series and films and “continuing to improve the variety and quality of our offering,” not by bundling itself with other streaming services.

The company also said that it is back on track after the SAG-AFTRA and WGA strikes sidelines production last year.

“Our 2024 programming has been patchier than normal due to last year’s strikes. But our volume has picked up again and we’re excited for what’s ahead,” the letter said.

On the advertising front, Netflix once again framed its ad business as being “a priority over the next few years,” while still being in the early days, but that they are “on track to reach what we believe to be critical ad subscriber scale for advertisers in all of our ads countries in 2025.”

Notably, the company also moderated expectations for its ad tier, telling shareholders that “we don’t expect ads to be a primary driver of our revenue growth in 2025.”

“The near term challenge (and medium term opportunity) is that we’re scaling faster than our ability to monetize our growing ad inventory,” the letter continued.

Going forward, the company said that it expects its subscriber base to improve more in Q4 than it did in Q3 thanks to its content slate and typical seasonality, and it expects 2024 operating margins to be 27 percent, increasing to 28 percent in 2025.

Netflix says that it is forecasting 2025 revenue of $43 billion-$44 billion.

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