The
Netflix
logo
is
displayed
above
its
corporate
offices
on
January
24,
2024
in
Los
Angeles,
California.
Mario
Tama
|
Getty
Images
Netflix
reported
second-quarter
earnings
Thursday
that
showcased
the
media
giant’s
position
at
the
head
of
the
streaming
race
as
it
added
more
global
subscribers
and
saw
strong
growth
in
its
advertising
business.
The
streamer
said
its
ad-supported
memberships
grew
34%
during
the
period
compared
to
the
same
quarter
last
year.
Advertising
has
become
an
increasingly
important
business
model
for
media
companies
to
boost
—
or
in
some
cases,
achieve
—
profitability
for
streaming.
Netflix’s
stock
has
been
boosted
in
recent
quarters
by
its
push
to
gain
subscribers
on
its
cheaper,
ad-supported
tier,
in
addition
to
its
crackdown
on
password
sharing.
Here’s
how
the
company
performed
for
the
period
ended
June
30,
compared
with
Wall
Street
expectations:
-
Earnings
per
share: $4.88
vs
$4.74
per
share
expected
by
LSEG -
Revenue: $9.56
billion
vs.9.53
billion
expected
by
LSEG -
Total
memberships:
277.65
million
global
paid
memberships
vs.
274.4
million
expected,
according
to
StreetAccount
Revenue
was
roughly
$9.6
billion,
up
17%
compared
to
the
year-earlier
period,
driven
primarily
by
the
increase
in
average
paid
memberships.
Netflix
said
it
now
expects
full-year
reported
revenue
growth
of
14%
to
15%,
compared
with
previous
guidance
of
13%
to
15%.
The
company
reported
net
income
of
$2.15
billion,
or
$4.88
per
share,
up
from
$1.49
billion,
or
$3.29
per
share,
during
the
second
quarter
of
2023.
Netflix’s
global
paid
memberships
rose
16.5%
year
over
year
to
278
million.
This
marks
one
of
the
last
updates
Netflix
will
release
regarding
its
membership
numbers.
Last
quarter,
the
company
warned
investors
it
would
stop
providing
quarterly
membership
numbers
or
average
revenue
per
user
beginning
in
2025,
noting
the
company
is
“focused
on
revenue
and
operating
margin
as
our
primary
financial
metrics
—
and
engagement
(i.e.
time
spent)
as
our
best
proxy
for
customer
satisfaction.”
Netflix’s
stock
has
been
uplifted
by
its
crackdown
on
password
sharing
and
the
addition
of
a
cheaper,
ad-supported
tier.
Netflix
began
focusing
on
different
business
strategies
to
drive
revenue
growth
after
the
streamer
saw
subscriber
growth
slow
in
2022.
In
May,
Netflix
said
it
would
launch
its
own
ad
platform
and
no
longer
partner
with
Microsoft
for
that
technology.
The
company
also
has
begun
adding
live
sports,
such
as
NFL
games
on
Christmas
Day
over
the
next
three
years,
a
move
that
will
likely
attract
more
ad
dollars
for
the
streamer.
“We’re
in
live
[TV]
because
our
members
love
it,
and
it
drives
a
ton
of
engagement
and
a
ton
of
excitement
…
and
the
good
thing
is
advertisers
like
it
for
the
exact
same
reason,”
said
Netflix
co-CEO
Ted
Sarandos
on
Thursday’s
earnings
call.
Netflix
had
been
dipping
its
toe
into
live
content
even
before
its
deal
with
the
NFL,
with
Sarandos
noting
the
company’s
focus
on
“buzzy,
exclusive
live
entertainment.”
Still,
original
shows
like
“Bridgerton”
and
“Baby
Reindeer”
continue
to
drive
engagement
for
the
streamer.
Luke
Newton
and
Nicola
Coughlan
attend
the
special
screening
of
“Bridgerton”
Season
3
–
Part
Two
at
Odeon
Luxe
Leicester
Square
on
June
12,
2024
in
London,
England.
John
Phillips
|
Getty
Images
The
company
said
Thursday
its
cheaper,
ad-supported
tier
has
been
gaining
traction
among
its
base,
with
these
subscribers
accounting
for
more
than
45%
of
signups
in
the
markets
where
the
option
is
offered.
However,
Netflix
noted
on
Thursday
that
the
ad-supported
business
is
still
young,
and
it
doesn’t
expect
ad
revenue
to
be
a
“primary
driver
of
our
revenue
growth
in
2024
or
2025.”
“The
near
term
challenge
(and
medium
term
opportunity)
is
that
we’re
scaling
faster
than
our
ability
to
monetize
our
growing
ad
inventory,”
the
company
said
in
its
earnings
release,
meaning
the
streamer
isn’t
able
to
meet
advertiser
demand
yet.
Netflix
co-CEO
Greg
Peters
said
on
the
earnings
call
Thursday
that
Netflix
has
so
far
been
focused
on
scaling
its
ad-supported
subscriber
base.
With
the
company
on
track
to
achieve
its
subscriber
goals
for
2025,
Netflix
is
now
shifting
its
focus
to
monetizing
its
ad
inventory,
he
said.
As
the
company
beefs
up
its
advertising
operation,
it’s
giving
“advertisers
more
effective
ways
to
buy
…
a
big
point
of
feedback
we
heard
from
advertisers,”
Peters
said
Thursday.
On
this
note,
Netflix
added
it
believes
it’s
on
track
to
“achieve
critical
ad
subscriber
scale
for
our
advertisers”
next
year,
allowing
it
to
further
increase
its
ad-tier
memberships
in
2026
and
beyond.
