Netflix was previously expected to announce 4.8 million new subscribers. Now they want to earn more advertising.
Updating topic…
After closing time on Wall Street Thursday evening, streaming giant Netflix delivered numbers for its first quarter.
Along with nearly doubling analysts' expectations for subscriber growth, revenue rose to $9.4 billion. In advance, income was expected to reach $9.3 billion.
The company reported first-quarter operating profit of $2.3 billion, or $5.28 per share. EPS of $4.54 was previously expected.
In the same period last year, the result ended at $1.3 billion, or $2.88 per share.
Despite the strong result, which Bloomberg News described as “the best start to the year since 2020,” the stock fell in after-hours trading.
The stock fell by 3.55 percent 40 minutes after the results were announced.
Along with the result, the company also presented new forecasts. Expectations were lower than analysts' expectations.
In the company's new forecasts, it appears that Netflix expects to achieve profits of $9.49 billion in the second quarter of this year. Analysts had previously estimated income of $9.51 billion in the second quarter.
You should stop reporting
In a letter to shareholders in connection with the quarterly presentation, the company wrote that it expects revenue to grow 13 to 15 percent in 2024.
Furthermore, the company wrote that it will improve the diversity and quality of the entertainment offer and innovate marketing.
The company also wrote that it “will expand advertising to become a more significant contributor to business in 2025 and the years ahead.”
Furthermore, the company wrote that it will stop reporting quarterly subscriber growth starting next year.
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Strong subscriber growth last year
In the fourth quarter of last year, revenue rose 12.5 percent to $8.8 billion in the quarter. By the end of 2023, Netflix had 260.3 million subscribers. In the fourth quarter alone, the company gained 13.1 million new subscribers.
The number of new customers has long been among the most important units of measurement by which the market is evaluated for Netflix.
The company has worked to shift focus from customer growth to profitability, the company previously said. They did this, among other things, by tightening the sharing of passwords between users.
Analysts expect that the impact of this tightening will weaken soon, and that Netflix will have to find new ways to attract subscribers, he writes Reuters.
Netflix shares have risen about 30% so far this year, and 82% in the past year.
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