Shares of Netflix rose on Friday following the company’s announcement of third-quarter earnings and revenue that exceeded expectations. The company’s shares increased by 5.4% in U.S. premarket trading as of 4:39 a.m. ET.
For the quarter ending September 30, Netflix reported an earnings per share of $5.40, surpassing the consensus estimate of $5.12 according to LSEG. The company’s revenue also exceeded projections, totaling $9.83 billion compared to the anticipated $9.77 billion.
A significant highlight for Netflix was the growth in its ad-supported membership tier, which increased by 35% from the previous quarter. Although Netflix does not predict that advertising will become its primary growth driver until 2026, the ad-supported tier accounted for over 50% of new sign-ups in markets where it is available during the third quarter.
Looking ahead, Netflix provided an optimistic outlook for the December quarter, projecting a 14.7% increase in fourth-quarter revenue to $10.128 billion. For 2025, the company forecasts revenue between $43 billion and $44 billion, indicating an 11% to 13% growth from the anticipated 2024 revenue of $38.9 billion.
Citi analysts noted in a report following the earnings update that Netflix’s fourth-quarter outlook “exceeded the Street,” while the 2025 forecast was “relatively in line with consensus estimates.” They anticipated that Netflix shares would likely trade higher on Friday due to the positive earnings report.
Richard Broughton, executive director of Ampere Analysis, remarked on CNBC’s “Squawk Box Europe” that Netflix has gained from ongoing investments in content despite challenges in the media industry. He explained that the return of growth in the market suggests positive trends, with Netflix’s continued content investment positioning it well for the coming years. Broughton highlighted Netflix’s significant role in producing global scripted series, asserting that the company is in a markedly different position compared to some competitors in terms of scale.
