Netflix defies odds with record-breaking financial surge and subscriber growth
Netflix has reasons to be pleased. Last quarter, it achieved record financial results in its history. The number of platform subscribers also significantly increased. And not long ago, there was a belief that Netflix would see declines.
19 April 2024 17:57
When Netflix introduced limitations on account sharing and the associated additional fee in May last year, many internet users said they did not intend to continue using this platform's services. It was emphasized then that Netflix's rivals (Disney+, HBO Max, or Prime Video) didn't have an issue with someone sharing their account.
It was predicted that the service would lose financially due to this move. However, after 2-3 months, the situation was verified surprisingly - the number of Netflix users paying for a subscription increased significantly. The effect didn’t take long, as the service's revenue in the first quarter of this year reached £7.5 billion, exceeding the average forecast of £7.4 billion. Year over year, it increased by 14.8%. The company surpassed the £7 billion level for the first time.
At the operating level, Netflix achieved £2.1 billion in profit last quarter and a 28.1% margin, compared to £1.37 billion and 21% a year earlier. Meanwhile, net profit rose from £1.05 to £1.86 billion. Earlier, the company only once earned over £1.2 billion (about £1.34 billion in the third quarter of the previous year).
Number of Netflix subscribers
At the end of March, Netflix could boast 269.6 million subscribers. This is a result of 9.33 million, better than in December of the previous year. Analysts, on average, expected the platform to have 264.21 million customers.
The cause of this growth could be that last quarter, sales of subscriptions to the cheaper ad-supported package increased quarter over quarter by 65% (in the previous two quarters, the dynamics were almost 70%). This option is chosen by over 40% of new Netflix customers in the countries where it is available.
And that's not the end of great news for the streaming giant. In the second quarter of this year, revenue is expected to increase by 15.9% to £7.6 billion, £2 billion in operating profit, a 26.6% operating margin, and £1.65 billion in net profit.
This proves that Netflix has considered its options and chosen solutions that attract customers.
