Netflix reported revenue of $9.8 billion for Q3 2024, up 15% year-over-year, surpassing what Wall Street analysts had expected.
Operating income reached $2.91 billion, with the operating margin rising to 30%, up from 22% in the same period last year.
After announcing its third quarter results, Netflix shares rose by around 4% (in after-hours trade).
282.7 million subscribers
The streaming giant added 5.1 million subscribers in the third quarter, bringing Netflix’s global subscriber count to 282.7 million—a 14.4% increase from the 247.15 million reported in Q3 2023.
Content that Netflix deemed “hits”
A key metric Netflix provided in its quarterly report was viewer engagement. For Q3 2023, it said that its average paid membership viewed “around two hours a day”.
This is quite an impressive figure, especially given its recent restriction on password sharing.
In a letter to shareholders, the company said its “string of hits” in the third quarter included Emily in Paris, The Perfect Couple, Nobody Wants This, Tokyo Swindlers, Cobra Kai, Beverly Hills Cop: Axel F, Rebel Ridge, and Officer Black Belt.
15% revenue growth forecast for Q4 2024
Netflix said it forecasts 15% revenue growth for the next quarter, or 17% when adjusted for foreign exchange rate fluctuations.
Revenue from Q3’23 to Q4’24 (forecast):
“We expect paid net additions to be higher in Q4 than in Q3’24 due to normal seasonality and a strong content slate. We project Q4 operating margin of 22%, a five percentage point year-over-year improvement,” Netflix said.
Adding: “We’re pleased that we’ve reaccelerated our growth and, as we head into 2025, we expect to deliver solid revenue and profit growth by both improving our core series and film offering while investing in new growth initiatives like ads and gaming. For 2025, based on F/X rates as of 9/30/24, we forecast revenue of $43B-$44B, which would represent growth of 11%-13% off of our 2024 revenue guidance of $38.9B”
Opinion
Netflix has proved once again that its dominance in the streaming market has solidified. Forecasted revenue growth for Q4 2024 looks strong and its focus on expanding in international markets highlights its ongoing effort to tap into areas where it sees growth potential.
Reference:
Netflix – FINAL-Q3-24-Shareholder-Letter [PDF]
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