In Los Angeles, Netflix reported its third-quarter earnings on Thursday, surpassing expectations for both revenue and earnings as its advertising segment continued to expand. The streaming platform saw its ad-tier memberships grow by 35% compared to the previous quarter. Netflix plans to launch this service in Canada in the upcoming quarter and aims for a broader expansion by 2025.
Although advertising is not expected to become a primary growth factor until 2026, the ad-tier represented over 50% of sign-ups during the third quarter in markets where it is available. Following the earnings release, shares rose approximately 5% in aftermarket trading.
For the period ending September 30, Netflix reported the following results: earnings per share of $5.40 compared to the $5.12 anticipated by LSEG, revenue of $9.83 billion surpassing the $9.77 billion expected by LSEG, and 282.7 million paid memberships, slightly above the 282.15 million foreseen by StreetAccount.
Net income for the quarter reached $2.36 billion, or $5.40 per share, up from $1.68 billion, or $3.73 per share, in the same quarter the previous year. Revenue increased by 15% to $9.83 billion from $8.54 billion a year earlier.
Anticipating the fourth quarter, the company projects revenue of $10.13 billion and earnings per share of $4.23. Looking ahead to 2025, Netflix estimates annual revenue to be between $43 billion and $44 billion, driven by enhancements in its core series and film offerings and new ventures like advertising and gaming.
During the third quarter, Netflix gained 5.1 million subscribers, exceeding Wall Street’s expectation of 4.5 million according to StreetAccount estimates. The total number of memberships across all pricing tiers now stands at 282.7 million.
Starting in 2025, Netflix will cease providing updates on subscriber numbers, shifting its focus to revenue and other financial metrics for performance evaluation. The company highlighted new shows, including “The Perfect Couple,” “Nobody Wants This,” and “Tokyo Swindlers,” as well as returning series like “Emily in Paris” and “Cobra Kai.” It also noted the success of films such as “Beverly Hills Cop: Axel F,” “Rebel Ridge,” and “Officer Black Belt.”
Additionally, Netflix is set to release the second season of the popular show “Squid Game” in the fourth quarter, alongside live sports events including a boxing match between Jake Paul and Mike Tyson and two National Football League games on Christmas Day.
A correction was made to this story to accurately report Netflix’s third-quarter revenue as $9.83 billion, compared to the $9.77 billion initially expected by LSEG.
