(News Bulletin 247) – The video-on-demand service published its third quarter results Thursday evening, including a 15% growth in revenue. The title climbs in pre-opening.

Netflix further proves that it has a head start in the “streaming wars”. The video-on-demand service once again delivered robust figures for its third quarter, exceeding expectations on every possible indicator.

Wall Street is once again excited. In pre-opening, the stock climbed 6.2% this Friday in New York around 2:20 p.m.

The company “beat third-quarter estimates for earnings, revenue and subscribers, and forecasts for the fourth quarter were revised upwards. Investors rolled out the red carpet and gave action gets star treatment,” writes AJ Bell’s Dan Coatsworth.

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A stock price multiplied by four

Over the period from July to the end of September, Netflix generated revenues of $9.83 billion, representing growth of 15% year-on-year. The number of subscribers stood at 282.72 million, up 14.4% year-on-year. Compared to the previous quarter, the number of subscribers increased by 5.07 million. Average revenue per subscriber stood at $8.40, up 5% excluding currency effects.

The operating margin reached 29.6%, increasing by more than seven percentage points year-on-year, earnings per share jumped 45% year-on-year to $5.40 while cash generation stood at 2.2 billion dollars compared to 1.9 billion dollars a year earlier.

According to an LSEG consensus cited by Reuters, analysts were expecting revenues of $9.77 billion and earnings per share of $5.12. Subscriber recruitment from one quarter to the next was also expected at 4.52 million according to Bloomberg.

The agency notes that Netflix has gained 60 million subscribers since May 2022, when the company experienced a slowdown in its growth which worried the market.

The company then took a set of initiatives, introducing subscriptions at reduced prices but with advertisements while launching measures to combat connection sharing, and therefore monetize a “pirate” audience. Its stock price has since multiplied by more than four and will also increase by more than 40% in 2024.

Slightly raised outlook for 2024

As usual, Netflix provides some audience information on flagship programs, notably the new seasons of “Emily in Paris” and “Cobra Kai”, which respectively recorded 51 million and 36.5 million views. For “The Perfect Couple”, with Nicole Kidman, the figure rose to 62.5 million.

The company also explains that the average viewing time per subscriber is currently two hours.

“It’s serious and it means that viewers aren’t switching between channels like they would with television. They’re choosing one streaming platform for the night, and not going back and forth between Netflix and its rivals like Disney Plus and Amazon Prime Video,” comments Dan Coatsworth.

Netflix also admitted that it was only in the early stages of its advertising revenue. “As we said last quarter, it takes time to create a new revenue stream and we do not expect advertising to be the primary driver of our revenue growth in 2025. “The short-term challenge (and medium-term opportunity) is that we are growing faster than our ability to monetize our subscriber base with growing advertising,” the company explained.

In terms of prospects, the company expects, for the fourth quarter, growth of 15% in its revenues, a stronger increase in its subscriber base than in the third quarter, and an operating margin of 22%. During this period, Netflix will be able to count on the second season of “Squid Games”, a Korean series resembling a massacre game which made a strong impression during the broadcast of its first season.

For the whole of 2024, revenue growth is expected at 15% compared to a range of 14% to 15% previously, the operating margin at 27% excluding currencies, compared to 26% previously.

And for 2025, the company expects between 43 billion and 44 billion dollars, i.e. growth of between 11% and 13%, and an operating margin of 28%.

“We still have a lot of room to increase our margins in the long term,” assured the company.

“Households have become accustomed to paying for Netflix at the same time as their energy bill, rent or mortgage, and all other big monthly expenses. Many don’t bat an eyelid at the cost and view it as the one of life’s essentials. It’s an affordable pleasure that provides a little lightness after a long day at work, and many customers remain loyal,” says Dan Coatsworth.

“Netflix is ​​the one thing people can’t live without and its latest results are a testament to its enduring appeal,” he concludes.