Netflix reports Q1 revenue up 15% YoY to $9.37B, vs. $9.28B est., paid memberships up 16% YoY to 269.6M, vs. 264.2M est., and net income up 79% YoY to $2.33B
LOS ANGELES — Netflix reported earnings that beat on the top and bottom line after the bell Thursday. — Here are the results:
CNBCSarah Whitten
Context & Ripple Effects
Netflix’s Q1 results mark a sharp improvement from its slower 2022 growth and declining net income, with double-digit gains in revenue and paid memberships accompanied by a much faster rise in profit.
The report established a stronger earnings baseline that was subsequently reinforced by Q2 revenue and membership growth and another Q3 earnings beat, making the Q1 margin expansion more consequential than a one-quarter estimate surprise.
First-order effects
Netflix exceeded revenue, membership, and net-income expectations, reaching $9.37B in revenue, 269.6M paid memberships, and $2.33B in net income.
The 79% year-over-year rise in net income means profit grew materially faster than revenue in the quarter.
Second-order effects
The result raises the operating benchmark for Netflix’s subsequent quarters: continued membership growth is now being assessed alongside the company’s ability to convert that growth into profit.
A beat across revenue, memberships, and earnings strengthens Netflix’s position as its reported subscriber base approaches 270M, increasing pressure on streaming rivals to demonstrate comparable scale or profitability.
Third-order effects
If revenue growth and profit expansion continue together, streaming competition may be judged less on subscriber additions alone and more on whether large subscriber bases produce durable earnings.
The sequence from Q1 through later reported Q2 and Q3 beats suggests a shift toward a more mature, execution-focused phase for Netflix, though the available coverage does not establish what will sustain that pattern.
The trend: Netflix is becoming a case study in streaming’s shift from subscriber-growth reporting toward proving that scale can translate into sustained profitability.
Netflix added more than 9 million customers last quarter. Another massive beat. It now has 270 million subscribers and more than 500 million total users. It generated a (record) profit of $2.3 billion. Story TK.
Shares in Netflix are down despite a blockbuster quarter. Two likely reasons: 1/ Investors already expected big numbers. Shares are up 25% this year. 2/ The boost from password sharing is coming to an end sooner rather than later. https://www.bloomberg.com/...
Old Netflix: We are crushing it. Look at our sub numbers! Recent Netflix: We are crushing it. But stop looking at our sub numbers! New Netflix: We are crushing it. And we're going to stop sharing our sub numbers with you. https://www.businessinsider.com/ ...
Apple and Amazon have never reported subscriber numbers for their streaming services either, but their stocks don't trade on streaming. Netflix is a pure streaming play. To stop providing subscriber numbers at all is a huge change for Wall Street.
Whoa, if I'm reading this correctly, Netflix is going to stop updating subscriber numbers every quarter? From shareholder letter: “Starting next year with our Q1'25 earnings, we will stop reporting quarterly membership numbers and ARM.
If you want to get Wall Street to stop focusing on a metric, just don't report it anymore! Netflix will stop reporting quarterly sub gains/losses in the first quarter of 2025, it announces. Shares down about 4% after market.