Netflix has surpassed expectations by adding 5.1 million subscribers in the third quarter of 2024, driven by the success of its ad-supported tier. This growth pushed the company’s shares up 4.8% in after-hours trading on Thursday, surpassing Wall Street’s forecast of 4 million new sign-ups. The ad-supported service, available in select markets, accounted for more than half of the new subscribers.
Despite the positive numbers, the subscriber growth fell short compared to last year’s 8.76 million additions during the same period. Netflix’s revenue reached $9.825 billion, slightly exceeding analysts’ projections of $9.769 billion, while its operating margin rose to 30%, up from 22% the previous year.
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Looking ahead, Netflix plans to shift its focus away from subscriber counts and emphasize profitability and revenue growth. Starting in 2025, the company will no longer report subscriber numbers, prioritizing metrics like revenue and profit margins. Analysts have raised concerns about a potential slowdown in subscriber growth in the US, a market that appears to be approaching saturation.
With new price hikes in Spain and Italy and high hopes for content like the return of Squid Game, Netflix is optimistic about further growth in the coming months. The streaming giant is also exploring new ventures, including live events like the Jake Paul vs. Mike Tyson boxing match in November, aiming to maintain its leading position in the competitive streaming market.
