Netflix added 5.1 million subscribers in the third quarter of 2024, exceeding market expectations by over 1 million, according to its earnings report released on Thursday.
The streaming giant's share price gained 3.5% in after-hours trading following the announcement.
Analysts had projected Netflix would attract 4 million new subscribers between July and September.
Netflix reported diluted earnings per share of $5.40, surpassing the consensus forecast of $5.12. Revenue also exceeded expectations, reaching $9.825 billion against the predicted $9.769 billion.
In recent quarters, Netflix has been shifting investor focus away from subscriber numbers to other performance indicators, such as revenue growth and profit margins.
The company posted an operating margin of 30% for Q3, a significant improvement from 22% in the same period last year.
“We've delivered on our plan to reaccelerate our business, and we're excited to finish the year strong with a great Q4 slate,” Netflix stated in a letter to shareholders.
While Netflix is working to boost revenue from its ad-supported plans, it does not expect advertising to be a major growth driver until 2026.
In Q3, ad-supported services accounted for over 50% of signups in regions where they were offered.
The company's strategy includes live events, particularly sports, which are attractive to advertisers. Netflix is set to stream a boxing match between YouTube star Jake Paul and Mike Tyson in November, followed by its first NFL games in December.
As of 7:45 am (AEDT), Friday, October 18, Netflix (NFLX) stock was trading at US$713.13, showing a significant increase of 3.5% from Thursday's close of $687.65. The stock reached a day low of $677.88 and a day high of $701.41. Netflix's market cap stands at $295.12 billion.