Netflix recently announced impressive third-quarter financial results, demonstrating that the company continues to excel in the competitive streaming market. The streaming giant's new subscriber count exceeded Wall Street's expectations, signaling robust demand for its services. Revenue for the quarter reached an impressive $9.83 billion, marking a 15% increase compared to the same period last year.
This figure surpassed analysts' forecasts, which estimated revenue of $9.77 billion. The company's per-share earnings saw a substantial jump to $5.40, compared to $3.73 from the previous year, exceeding the Street's expectation of $5.12 according to generally accepted accounting principles (GAAP). Although Netflix's global paid net additions saw a decline, dropping to 5.07 million in the third quarter from 8.76 million a year earlier, this still outperformed the consensus estimate of a 4.6 million increase, highlighting the company's ability to attract subscribers despite market fluctuations.
In after-hours trading, Netflix's shares rose by 3.9%, reflecting investor confidence in the company's performance. Netflix continues to innovate and expand its offerings. The service reported a 35% increase in ads membership quarter over quarter, and it is set to launch its advertising technology platform in Canada in the fourth quarter, with plans for a broader rollout in 2025.
Additionally, Netflix has adjusted its pricing strategy, increasing prices in several markets, including specific countries in Europe, the Middle East, Africa, and Japan. Starting Friday, consumers in Spain and Italy will see price hikes. Earlier in the month, the company phased out its basic subscription plan in the US and France, a move that will also be implemented in Brazil later this quarter. Looking ahead to the fourth quarter, Netflix projects a revenue boost of 15% year-over-year to approximately $10.13 billion, outperforming analysts' estimates of $10.02 billion.
The company anticipates higher net subscriber additions due to seasonal trends and a strong lineup of engaging content. Revenue growth forecasts for the current fiscal year have been adjusted to an estimated $38.9 billion, maintaining a solid outlook compared to the previous projections of a 14% to 15% increase.
Moreover, Netflix has raised its operating margin outlook for 2024 to 27%, up from the prior estimate of 26%. For 2025, the company foresees potential revenue of $43 billion to $44 billion, projecting an 11% to 13% growth from its 2024 guidance. As Netflix approaches 2025, it plans to focus on delivering consistent revenue and profit growth by enhancing its core offerings of series and films while also investing in new growth initiatives such as advertising and gaming.
The company acknowledges it has significant work ahead regarding its advertising services, which will become a key priority in the coming years..