On Thursday afternoon, Netflix Inc. released its financial statement for Q1 2024. The numbers reflect a positive picture for the media company offering streaming entertainment subscriptions.
What are the details of the report?
Netflix’s financial report highlights that 9.33 million subscribers have joined the streaming service as 2.53 million U.S. and Canada subscribers gained during the first quarter.
Netflix’s report reveals a staggering 270 million subscribers across 190+ countries, with an average of more than two people per household. This translates to an audience of over half a billion people.
Earnings per share have been impressive at $5.28, outperforming the anticipated $4.51 and adding about 70% above analyst forecasts. So, its revenue was $9.37 billion, which surpassed the $9.26 billion projected by analysts and industry experts.
The company said, ‘Revenue was up 15%, our operating income grew by 54%, and our operating margin rose by seven percentage points to 28%. ‘
Reason for the growth
Experts stated that the improvement in subscriber numbers can be attributed to a crackdown on password sharing. Netflix has been determined to reduce the number of users who can access a singular account, so the surge in numbers could be attributed to that brick wall being in place, and those hoping to access their catalogue will have to pay up.
However, Moffett Nathanson analyst Michael Nathanson noted that the effects of the password-sharing crackdown launched last year were a “pull-forward of growth” that can’t be sustained “indefinitely.”
Additionally, the salaries of the executives were also capped.
The company was at its lowest point in 2020, but it later scaled to its all-time high in November 2021 before hitting rock bottom in mid-2022. However, for the past two years, it has seen a stabilisation in price, and it had its best-ever year of subscriber growth, revenue, and profits in 2023.
Netflix shares fell about 3% immediately after the earnings release but remain up big for the year.
