Netflix Blows Away Wall Street by Adding More Than 9 Million Subscribers in Q1
Netflix added 9.33 million subscribers in the first quarter of 2024, for which Wall Street had anticipated 4.9 million net adds. That’s a legit wow, as is Netflix’s new grand total of 269.60 million global paid subscribers.
Sure, Netflix added more than 13 million subs in the prior quarter, but in the last Q1, the company added fewer than 2 million subscribers. Things have been going very well for Netflix as of late. A year ago, shares in Netflix (NFLX) traded around $331; today, they closed at $611.15. After hours, the NFLX share price declined due to the company’s Q2 earnings forecasts not burning as bright.
And perhaps this also didn’t help: Next year, Netflix is making some major changes to how it reports its membership. The company said in today’s shareholder letter it will no longer report its subscriber tally on a quarterly basis, rather it will just announce “major subscriber milestones” as it crosses them. Netflix will also no longer report its ARM, or average revenue/member, what most companies refer to as ARPU (average revenue per user). Basically, the streamer believes these to be irrelevant statistics with which to measure its success given its massive scale.
Netflix posted $9.370 billion in Q1 (2024) revenue and a profit of $2.332 billion. At the end of 2023, the company forecast it would report first quarter revenue of $9.240 billion and net income of $1.976 billion, so it impressed even itself today. Netflix creamed those Wall Street analysts who expected Thursday’s announced Q1 revenue would be more like $8.73 billion.
For a few quarters now, Netflix’s main internal measuring stick has been revenue. The infamous password-sharing crackdown has been a big financial success thus far; price increases and ads have also chipped in. Wall Street believes the streamer has already realized much of the potential subscriber growth from its paid-sharing program. Netflix has acknowledged that its ad supply is well ahead of its ad demand; it needs to work on that. “On it!” the company reiterated on Thursday, basically.
Some of Netflix’s biggest hits in the January-March quarter were series “Griselda,” “The Gentlemen,” and “3 Body Problem,” though none were true breakouts. In film, the streamer’s “Stranger Things” star Millie Bobby Brown did well with her “Damsel” movie.
Speaking of the big screen on the not-so-big screen: on Day 1 of the current quarter (Q2 2024), Netflix made a big change atop its film division: Scott Stuber is out and Dan Lin is in. Lin produced the “Lego” movies and, more recently, “Godzilla x Kong: The New Empire.” Stuber produced “Ted” and “Role Models.” Hollywood awaits what Lin will do with Netflix’s original movies slate.
