Netflix Inc (NASDAQ:NFLX, ETR:NFC) reported third-quarter earnings that outperformed market expectations, driven by its expanding advertising business. The streaming giant saw a 35% quarter-over-quarter increase in ad-tier memberships, and the service is set to launch in Canada next quarter, with broader global expansion planned for 2025.
While advertising is not expected to be a primary growth engine until 2026, the ad-supported tier accounted for over 50% of new sign-ups in available regions during the quarter.
Shares of Netflix rose around 5% in aftermarket trading following the report.
For the quarter ending September 30, Netflix reported:
- Earnings per share: $5.40, beating the $5.12 forecast by LSEG;
- Revenue: $9.83 billion, exceeding the $9.77 billion projection by LSEG;
- Paid memberships: 282.7 million, surpassing the 282.15 million estimate from StreetAccount; and
- Net income increased to $2.36 billion, or $5.40 per share, from $1.68 billion, or $3.73 per share, during the same period in the prior year. Revenue surged 15% year-on-year, rising from $8.54 billion.
Looking ahead, Netflix forecasts fourth-quarter revenue of $10.13 billion and earnings per share of $4.23.
The company expects full-year 2025 revenue to range between $43 billion and $44 billion, driven by stronger core content offerings and new ventures such as ads and gaming. A “healthy increase in paid memberships” is anticipated to underpin much of this growth.
Netflix added 5.1 million subscribers in the quarter, outperforming Wall Street’s expectation of 4.5 million, bringing total memberships to 282.7 million across all pricing tiers.
As of 2025, the company will no longer disclose subscriber numbers, shifting its focus to revenue and financial performance indicators.