Netflix (NFLX) Q3 2024 earnings

LOS ANGELES – Netflix reported a third-quarter profit on Thursday that beat sales and profits as its advertising business continued to grow.

The streamer's ad tier memberships increased 35% quarter-over-quarter. The company is on track to launch the service in Canada next quarter and more broadly in 2025.

While Netflix doesn't expect advertising to become the primary growth driver until 2026, the company noted that the advertising tier accounted for more than 50% of sign-ups in the third quarter in the countries where it is available.

Shares rose about 5% in aftermarket trading.

Here's what Netflix reported for the period ending September 30:

• Earnings per share: $5.40 versus LSEG's expected $5.12
• Revenue: $9.83 billion versus LSEG's expected $9.77 billion
• Paid Memberships: According to StreetAccount, there are 282.7 million compared to expected 282.15 million

Net income for the period was $2.36 billion, or $5.40 per share, up from $1.68 billion, or $3.73 per share, in the year-ago quarter. Sales rose 15% to $9.83 billion from $8.54 billion a year ago.

The company said Thursday it expects fourth-quarter revenue of $10.13 billion and earnings per share of $4.23.

Netflix forecasts full-year 2025 revenue of between $43 billion and $44 billion as it improves its core offering of series and films and invests in new initiatives such as advertising and gaming. Much of this revenue growth is expected to come from what the company calls a “healthy increase in paid memberships.”

StreetAccount estimates that Netflix added 5.1 million subscribers during the quarter, more than the 4.5 million expected by Wall Street. In total, the streaming service now has 282.7 million memberships in all price levels.

Starting in 2025, Netflix will no longer report its subscriber numbers to investors as the company shifts focus to revenue and other financial metrics as performance indicators.

The company promoted new series like “The Perfect Couple,” “Nobody Wants This” and “Tokyo Swindlers,” as well as returning seasons of “Emily in Paris” and “Cobra Kai,” as well as major films like “Beverly Hills Cops: Axel.” F,” “Rebel Ridge” and “Officer Black Belt” achieve groundbreaking viewership numbers.

Netflix is ​​expected to release a second season of the hit show “Squid Game” in the fourth quarter, along with live sporting events such as a boxing match between Jake Paul and Mike Tyson and two National Football League games on Christmas Day.

Correction: This story has been updated to correct Netflix's reported and estimated third-quarter revenue. According to LSEG, the company reported $9.83 billion, compared to expected $9.77 billion.