In its first quarterly earnings report without disclosing subscriber numbers, Netflix pointed Wall Street toward revenue and operating income as the streaming giant seeks to control the story of its growth potential.
Netflix reported $10.5 billion in revenue, operating income of $3.3 billion, and a margin of 31.7 percent. All up substantially from a year ago.
Netflix also said that Reed Hastings, its founder and executive chairman, would give up that role to become chairman and non-executive director of the company. Hastings moved from co-CEO to executive chairman two years ago.
The company beat Wall Street expectations handily, continuing to demonstrate its strength in the marketplace.
The company also raised prices in many markets (including the U.S.) earlier this year, a move that also included the first hike to its ad-supported plan. The hikes likely bolstered the company’s margins, given its low churn.
Netflix said that in Q2 it expects revenue to grow by 15%, and to have operating margins of 33%, owing to the price increases. The company says that it expects to continue rolling out price increases in different markets, and to expand its advertising and ad tech platform, growing that business as well. It says it is “on track to reach sufficient scale with our member base in all ads countries in 2025.”
Netflix announced its plan to end subscriber number reporting a year ago, noting that it would still do so when critical milestones were hit. It ended on a high note, with the company adding a record-shattering 19 million subscribers in its Q4 report three months ago. Netflix ended 2024 with 302 million global subscribers.
Third parties will continue to try and measure Netflix’s subscriber growth through their own efforts, with Antenna reporting that Netflix added 4.1 million subscribers in the U.S. last quarter. That would imply continued healthy sub growth in Q4.
As The Hollywood Reporter noted at the time, Netflix’s decision to stop reporting subscriber numbers came as the story it sought to tell all Street shifted. Its password-sharing crackdown continues to pay dividends, but is likely shrinking in efficacy by the month. Meanwhile, its growth businesses include advertising and gaming, which are nascent and growing, with live events also a piece of the puzzle. To that end, Netflix has focused more efforts on time spent as a key metric, alongside topline numbers.
More to come.
#Focus #Shifts #Revenue #Income
