Netflix defies expectations: record-breaking profits and subscriber surge
Netflix has reasons to celebrate. In the last quarter, it recorded the highest financial results in its history, alongside a notable increase in its subscriber base—challenging earlier predictions of a potential decline.
7:14 AM EDT, April 19, 2024
When Netflix introduced restrictions on account sharing alongside an additional fee in May last year, numerous online users declared their intention to stop using the platform. At the time, it was highlighted that Netflix’s competitors—Disney+, HBO Max, or Prime Video—did not restrict account sharing.
Many speculated that this strategy would lead to financial losses for Netflix. Contrary to expectations, the number of paying Netflix subscribers significantly grew within two to three months. This growth propelled the company's revenue to $9.37 billion in the first quarter of this year, surpassing the expected $9.28 billion and marking a 14.8% increase yearly. This was the first time the company's revenue exceeded $9 billion.
Number of Netflix subscribers
As of the end of March, Netflix had 269.6 million subscribers, an increase of 9.33 million from December of the previous year. This exceeded analysts' expectations of 264.21 million customers.
This growth is partly attributed to the increase in subscription sales to the cheaper, ad-supported package, which increased 65% quarter over quarter (compared to almost 70% in the previous two quarters). Over 40% of new Netflix customers in available countries opt for this package.
Furthermore, the streaming giant's future looks bright. In the second quarter of 2024, revenue is projected to rise by 15.9% to $9.49 billion, with $2.52 billion in operating profit, a 26.6% operating margin, and $2.06 billion in net profit.
