Netflix has posted impressive results for Q3 FY24, with a 15 percent year-over-year revenue growth and the addition of 5.1 million paid net memberships. This growth led to a 52 percent surge in operating income, reaching $2.9 billion, with an operating margin of 30%. Earnings per share (EPS) rose by 45 percent to $5.40, despite a $91 million foreign exchange loss from Euro-denominated debt.
Netflix’s success in the Asia-Pacific (APAC) region, with a 19 percent year-over-year revenue increase, marked its highest growth across all regions. This was largely driven by strong local content in countries such as Japan, Korea, Thailand, and India. Additionally, the UCAN (United States and Canada) and EMEA (Europe, Middle East, and Africa) regions both recorded 16 percent revenue growth, while LATAM (Latin America) saw a 9 percent increase.
Despite the challenges posed by paid sharing, Netflix maintained robust engagement levels, with viewers spending an average of two hours per day per paid membership. Households that transitioned to paid subscriptions showed increased viewing hours in 2024.
To enhance monetization, Netflix expanded its ads-supported plan, which grew by 35 percent quarter over quarter. The ads plan now accounts for over 50 percent of sign-ups in ad-supported countries, and the company expects substantial growth in ad subscribers by 2026.
Looking ahead, Netflix plans to launch its first-party ad tech platform in Canada next month, with a broader rollout to all ad-supported countries in 2025. This move is part of the company’s strategy to scale its ad business and drive further revenue growth.
Key Highlights:
- Revenue grew by 15% YoY, with operating income up by 52% to $2.9 billion.
- 5.1 million paid net memberships added in Q3.
- Earnings per share (EPS) increased by 45% to $5.40.
- APAC led regional growth, with revenue up by 19%.
- Ads-supported plan grew by 35% QoQ, accounting for over 50% of sign-ups in supported countries.