Netflix (NFLX) Q1 2024 Results

A couple is sitting in front of a television with the Netflix logo on it.

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LOS ANGELES — Netflix will no longer provide quarterly membership figures or average revenue per user starting next year, the company said Thursday as it posted top and bottom line earnings.

Total memberships rose 16% in the first quarter to 269.6 million, well above the 264.2 million Wall Street expected. However, this quarter marks one of the last glimpses investors will have of the company’s subscriber base going forward.

“As we have noted in previous letters, we focus on revenue and operating margin as our key financial indicators – and on engagement (i.e. time spent) as our best indicator of customer satisfaction,” the company said in its quarterly letter to shareholders. . “In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential.”

Netflix now says it’s generating substantial profits and free cash flow – while expanding new revenue streams like advertising and cracking down on password sharing – its membership numbers aren’t the only factor in business growth. He said the measure lost importance after he began offering multiple pricing tiers for memberships.

The company said it will still announce “major subscriber milestones as we achieve them.”

Netflix also said it expects paid net adds to be lower in the second quarter compared to the first quarter “due to typical seasonality.” Its second-quarter revenue forecast of $9.49 billion was just below Wall Street’s estimate of $9.54 billion.

The company’s shares fell about 4% in extended trading.

Here are Netflix’s first quarter results:

  • Earnings per share: $5.28 versus $4.52 expected by LSEG
  • Turnover: $9.37 billion versus $9.28 billion expected by LSEG
  • Total memberships: 269.6 million versus 264.2 million expected, according to Street Account

Netflix reported first-quarter net income of $2.33 billion, or $5.28 per share, compared with $1.30 billion, or $2.88 per share, in the year-earlier period.

The company reported revenue of $9.37 billion for the quarter, up from $8.16 billion a year earlier.

The streaming company is shifting from targeting subscriber growth to prioritizing profit, using price hikes, a crackdown on password sharing and an ad-supported tier to increase its income. Investors are looking for signs that these efforts continue to boost Netflix and want more details about the company’s foray into video games.

Netflix could also give more information on its partnership with Participations of the TKO group to bring WWE to the platform. The company has announced that it would like to expand its live sports offering.

“We’re in the very early days of developing our live programming and I would view this as an expansion of the types of content we offer, the way we’ve expanded into theatrical, unscripted, animated and, more recently, gaming,” co-CEO Ted Sarandos said during Thursday’s earnings call. “We think these kinds of cultural moments like the Jake Paul and Mike Tyson fight are exactly that kind of television, and we also want to be a part of capturing those moments with our members, so for me, that’s the excitement part . of this.”

As of Thursday morning, the company’s shares were up 27% year to date and about 85% over the past 12 months.

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