Netflix Surpasses 277 Million Subscribers with Strong Q2 Performance
- Category: News
(Source- finance.yahoo)
Netflix has exceeded expectations in the second quarter of 2024, posting impressive subscriber gains and financial results. The leading premium streaming service added 8.05 million new paid customers in Q2, boosting its global subscriber base to 277.65 million. Financially, the company reported revenue of $9.56 billion, a 17% increase from the previous year, and a net income of $2.15 billion, significantly up from $1.49 billion a year ago. This translates to earnings per share (EPS) of $4.88.
Netflix’s Q2 forecast had anticipated revenue of $9.49 billion and earnings of $4.68 per share, while Wall Street expected $9.53 billion in revenue and EPS of $4.74. Analysts had predicted an addition of 4.8 million subscribers, but Netflix surpassed these estimates by a wide margin. Despite ceasing to provide quarterly subscriber guidance at the beginning of 2023, Netflix’s strong performance in Q2 has reassured investors. Starting in 2025, the company will no longer report subscriber figures regularly, focusing instead on user engagement metrics and financial results as better indicators of business health.
Content and Engagement Strategies
In Q2, Netflix highlighted its achievements in content and engagement. The platform led all networks with 107 Emmy nominations across 35 series, TV movies, and specials. Notable premieres included “Bridgerton” Season 3, “Baby Reindeer,” “Queen of Tears,” and “The Great Indian Kapil Show,” along with films like “Under Paris,” “Atlas,” and “Hit Man.” “The Roast of Tom Brady” attracted the largest live audience to date, with 22.6 million views from its May 5 premiere through July 14.
To enhance viewer engagement, Netflix has expanded its live programming lineup, including two NFL games on Christmas Day 2024, the rescheduled fight between Jake Paul and Mike Tyson on November 15, and WWE’s “Raw” starting in 2025. Additionally, Netflix began testing a new, more intuitive TV homepage in June, aiming to improve the discovery experience for users.
Advertising Business and Future Plans
Netflix is prioritizing the expansion of its advertising business to become a significant revenue contributor in 2025 and beyond. Although the company has not disclosed the ad revenue generated thus far, its ad-supported plans, introduced in late 2022, have seen substantial growth. Priced at $6.99 per month in the U.S., the ad-supported tier has become the entry-level package in markets where it is available. The number of members on ad-supported plans grew by 34% in Q2, accounting for over 45% of all signups in Netflix’s ad markets.
To support its advertising initiatives, Netflix is developing an in-house ad tech platform, slated for testing in Canada in 2024 and a broader launch in 2025. Microsoft’s Xandr has been the original go-to-market advertising tech and sales partner for Netflix. The company acknowledges that building this business “from scratch takes time,” and notes the challenge of scaling faster than the ability to monetize the growing ad inventory.
Overall, Netflix’s strong Q2 performance, content achievements, and strategic focus on advertising position the company for continued success in the competitive streaming industry.
