The firm led by Greg Peters and Ted Sarandos has presented the results corresponding to the first quarter of its fiscal year. The streaming company has recorded $9.370 billion in revenue, a figure higher than the $9.280 billion estimated by investors, representing a year-on-year growth of 15%. It is also a figure higher than the $8.830 billion from the previous quarter.
Additionally, it has obtained earnings of $5.28 per share, a volume higher than the estimated $4.52 per share by the market. In this regard, investors expected earnings to double from $2.11 per share in the previous quarter. This is crucial, as the creator of ‘Snow Society’ is focusing on maximizing its profits, considering that the industry is already “mature” and it is not necessary to continue seeking growth. Specifically, Netflix has reported net profits of $2.332 billion, far exceeding the $1.305 billion from the same quarter in 2023, as well as the $938 million from the last quarter of its previous fiscal year.
On the other hand, the company has experienced a 16% increase in subscribers, equivalent to an increase of 9.33 million users, surpassing the 4.84 million rise estimated by analysts. Thus, the creator of ‘All Quiet on the Western Front’ now has 269.6 million users compared to the previous 260.2 million. This has meant that the streaming profits have reached $2.213 billion.
Netflix has also pointed out that its goal is to continue increasing profits, relying on the subscription ad policy, thanks to which revenue expectations for the closing of 2024 have been increased from 13% to 15%. In this sense, subscriptions with advertising increased by 65%, and they now constitute 40% of all new platform subscriptions. Additionally, the volume of subscriptions that have exceeded market expectations has been achieved thanks to this model.
Simultaneously, Netflix has announced a shift in its strategy, based on the industry’s maturity. According to the company, the sector is already mature, and the goal is not to grow but to maximize profit. Therefore, the company has announced that, starting January 2025, it will stop providing quarterly subscription data. However, this has discouraged investors, who interpret this move as a sign of weakness. In this sense, operators have been disappointed by revenue expectations for the second quarter of this year. While their estimate was $9.510 billion, the American company has stated that it expects to record $9.490 billion in revenue. Both factors have been key for the company to decline by 3% in after-hours trading.
Furthermore, the list of the most-watched programs highlights productions from four countries: USA, UK, South Korea, and Spain. Regarding the most popular content, the company makes a special mention of ‘Snow Society’, which swept the last Goya awards with twelve ‘giant heads’. According to Netflix, this movie has already been viewed 98.5 million times, becoming the second most-watched non-English film on the platform.
With this, Netflix states that it currently has a 21% share of the US streaming market, improving from previous quarters. Additionally, this represents 8% of all television consumption in the North American country.
There is no doubt that Netflix’s strategy, aimed at creating quality content and diversifying it through themes like sports, has yielded positive results. This positions it as the streaming platform leader, putting more pressure on its competitors, especially Disney, a company that made a change of plans in order to find the formula for success for its Disney+ platform.
