Netflix Inc. reported strong quarterly financials on Thursday, besting analyst estimates for revenue and profit per share, primarily spurred by tremendous growth in its ad-supported tier. The company reported profit per share at $5.40, beating the estimate of $5.12; revenue that comprises $9.83 billion.
What was worth celebrating, however, is the fact that ad-tier membership finally came in over 35 percent from first quarter. The ad-supported model is going to account for more than 50% of new user sign-ups in markets where it’s available, showing resilient demand in those areas. Although Netflix still doesn’t anticipate ad support to become a growth driver until after 2026, its decision to add ad services, which will be introduced with Canada next quarter and rolled out the following year, seems to suggest a long-term diversification of the company’s revenue streams.
Netflix added 5.1 million new subscribers in its third quarter, more than analysts estimated at 4.5 million. Paid memberships reached about 282.7 million. Earnings were reported as $2.36 billion over the quarter, the report said, $1.68 billion more than last year.
The company anticipates revenues of $10.13 billion for the fourth quarter and an earnings per share of $4.23. In terms of total revenue for full-year 2025, the company is looking at a place in the range of $43 billion to $44 billion, propelling itself through a combination of enhancements to its content library, strategic growth in advertising, and moves into gaming.
The company has listed out some really successful new and returning series outside its performance as a business, such as “The Perfect Couple,” “Emily in Paris,” and the much-discussed second season of “Squid Game.” All of those are based on original content.
After the publication of the earnings report, the company’s stocks surged by 5% in the after-hours trading as investors received the news positively with regard to their prospects in the competitive streaming market.
