In Los Angeles, Netflix announced its third-quarter earnings on Thursday, surpassing expectations in terms of both revenue and profit as its advertising segment experienced growth. The company’s ad-tier memberships increased by 35% compared to the previous quarter. Netflix plans to introduce this service in Canada in the upcoming quarter and aims for a wider rollout by 2025.
Although Netflix does not anticipate advertising to become a primary growth driver until 2026, the company observed that the ad-tier represented over half of the new sign-ups during the third quarter in regions where it is available. Following the earnings announcement, Netflix’s shares rose roughly 5% in after-hours trading.
The company reported the following financial results for the period ending September 30:
– Earnings per share were $5.40, compared to the $5.12 forecasted by LSEG.
– Revenue reached $9.83 billion, surpassing the $9.77 billion expectation set by LSEG.
– Paid memberships totaled 282.7 million, exceeding the anticipated 282.15 million according to StreetAccount.
Netflix’s net income for the quarter was $2.36 billion, or $5.40 per share, an increase from $1.68 billion, or $3.73 per share, in the same quarter last year. The company’s revenue grew by 15%, rising to $9.83 billion from $8.54 billion a year earlier.
For the fourth quarter, Netflix projected revenues of $10.13 billion and earnings per share of $4.23. The company envisions full-year 2025 revenues between $43 billion and $44 billion, driven by enhancements in its core content offerings and investments in new initiatives like advertising and gaming. A “healthy increase in paid memberships” is expected to contribute significantly to this revenue growth.
During the quarter, Netflix added 5.1 million subscribers, surpassing the Wall Street forecast of 4.5 million as estimated by StreetAccount, bringing the total number of memberships to 282.7 million across all pricing tiers.
Starting in 2025, Netflix will discontinue reporting on its subscriber numbers, shifting its focus to revenue and other financial metrics as key performance indicators.
Netflix highlighted new popular shows including “The Perfect Couple,” “Nobody Wants This,” and “Tokyo Swindlers,” alongside returning series such as “Emily in Paris” and “Cobra Kai.” Notable movies like “Beverly Hills Cop: Axel F,” “Rebel Ridge,” and “Officer Black Belt” were also cited as viewership successes.
The platform plans to release a second season of the hit series “Squid Game” in the fourth quarter, in addition to hosting live sports events like a boxing match featuring Jake Paul and Mike Tyson, as well as two National Football League games on Christmas Day.
This article has been corrected to reflect the accurate reported revenue for Netflix’s third quarter, which was $9.83 billion, compared to the $9.77 billion expected, according to LSEG.
