Netflix has exceeded market expectations in its third-quarter results for 2024, signaling a promising revenue outlook for the coming year. The streaming giant added 5.1 million paid subscribers in Q3, pushing its global total to 282.72 million, representing a 14% year-over-year growth. This subscriber surge and financial performance have positioned Netflix for continued success, with projections for next year indicating significant revenue growth.

Wall Street analysts, based on data from LSEG, anticipated earnings per share of $5.12 USD and revenue of $9.77 billion USD for the July-September period. Netflix outperformed these predictions, achieving a 15% revenue increase compared to the same period last year, and reported a robust free cash flow of $2.2 billion USD.

In its Q3 shareholder letter, Netflix highlighted the popularity of its ad-supported plan, noting that it accounted for over 50% of new sign-ups in regions offering the service. Membership in the ad-tier grew by 35% quarter-over-quarter, with engagement levels comparable to its standard plan. The company remains optimistic about scaling its ad business, aiming to reach critical advertiser demand in all ad-supported markets by 2025 and further expanding this in 2026.

Looking ahead, Netflix forecasts revenue growth of 11 to 13% for 2025, equating to $43 billion to $44 billion USD. The company attributes this projected increase to both a rise in paid memberships and higher average revenue per user. While Netflix delivered substantial margin improvements in 2024, it plans to balance margin growth with strategic investments to sustain long-term success. The company has set an operating margin target of 28% for 2025, up from the forecasted 27% for 2024.

In a notable change, Netflix announced that starting in Q1 2025, it will no longer provide regular updates on subscriber numbers, shifting its focus to other metrics that better reflect the overall health of the company. As Netflix continues to innovate and adapt, the company’s strong Q3 performance and future growth plans highlight its position as a leader in the competitive streaming industry.