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Netflix Surges After Earnings Beat—Is the Streaming King Back?

Netflix (NFLX) is proving it’s still a heavyweight in streaming.

Author

Evelio Silvera
October 18, 2024

Why it matters:
Netflix (NFLX) is proving it’s still a heavyweight in streaming. After a rocky year, the stock's 5% jump in pre-market trading suggests renewed confidence.

The big picture:
Netflix’s third-quarter earnings crushed expectations, delivering $3.73 per share vs. the $3.49 forecasted by analysts. Revenue hit $8.54 billion, and the company continues to add subscribers, even as competition heats up.

The password crackdown strategy paid off, driving subscriber growth, while investments in original content kept viewers hooked. The ad-supported tier is also starting to contribute meaningfully to the bottom line, opening up new revenue streams.

With new subscribers flooding in from EMEA and APAC, Netflix proves its global appeal isn't just surviving; it's thriving.

Key Points:

  • Subscriber Growth: Nearly all new customers came from outside the Americas, showcasing Netflix's successful international strategy. Subscribers: 247.15 million globally, up from 238.39 million last quarter.

  • Revenue Forecast: Projecting an 11% to 13% sales increase next year, Netflix is betting big on continued growth through new content and pricing power.

Go deeper:

  • Netflix’s strategy to fight churn—by enforcing account sharing limits—has turned into an unexpected growth lever.

  • With original hits like One Piece and an expanding global library, Netflix remains top-of-mind for viewers worldwide.

  • Ad-tier success could push earnings higher, capitalizing on advertisers targeting Netflix's massive, diverse user base.

What they’re saying:

“Netflix’s pivot to cracking down on password sharing was the right move at the right time, boosting both subscribers and revenues,” said Michael Nathanson, Senior Analyst at MoffettNathanson.

The bottom line:

With a successful quarter and promising ad revenue growth, Netflix looks positioned to outperform in the coming months. Investors should keep an eye on its ad-tier and continued global expansion—both critical for long-term gains.