California: Netflix shares surged by 5.6 percent in U.S. premarket trading on Friday, October 18, after the streaming giant posted stronger-than-expected third-quarter earnings and revenue. The company reported earnings per share of 5.40 dollars for the period ending September 30, surpassing the forecasted 5.12 dollars, while revenue reached 9.83 dollars billion, beating analysts' estimates of 9.77 billion dollars.
A major highlight was the 35 dollars quarter-over-quarter growth in Netflix’s ad-supported membership tier, which now accounts for over half of new sign-ups in regions where it’s available. Although Netflix doesn't anticipate ad revenue becoming a primary growth driver until 2026, this uptick is a positive signal for its future ad business.
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Looking ahead, Netflix offered an optimistic outlook, predicting fourth-quarter revenue will rise by 14.7 percent to 10.13 billion dollars . It also expects revenue for 2025 to hit between 43 billion dollars and 44 billion dollars , marking an 11% to 13% increase from the projected 2024 revenue of 38.9 billion dollars.
Netflix exceeded market expectations
Citi analysts noted that Netflix’s fourth-quarter guidance exceeded market expectations, reinforcing the positive outlook for its stock.
Richard Broughton, executive director of Ampere Analysis, attributed Netflix’s growth to its continuous investment in content, even during tough times for the broader media industry. He noted that Netflix’s commitment to producing high-quality content, particularly in genres like drama, romance, and science fiction, has positioned the company to dominate, with nearly one in ten global TV series next year expected to be Netflix originals.
Despite industry-wide cutbacks, Netflix’s strategy is placing it ahead of its competitors in terms of content scale and growth potential.
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