Streaming giant Netflix (NASDAQ:) beat Wall Street forecasts by adding 5.1 million subscribers in the third quarter, far surpassing the 4 million expected. The company’s latest financial report, released today, highlighted this success alongside the release of new series such as “The Perfect Couple” and “Nobody Wants This”.
Netflix reported solid earnings per share of $5.40, higher than the $5.12 expected. Revenue figures also beat expectations, reaching $9.825 billion versus the forecasted $9.769 billion.
The company has shifted investors’ attention to revenue growth and profit margins rather than subscriber numbers alone. With this in mind, they reported a substantial 30% operating margin for the quarter, a notable increase from the 22% margin in the same period last year.
In a letter to shareholders, Netflix expressed confidence in its plan to reinvigorate the business and forecast a strong end to the year with impressive programming for the fourth quarter.
As part of its revenue diversification strategy, Netflix is developing its advertising-supported offerings. Although they don’t expect advertising to be a major growth driver until 2026, Antenna’s research indicated that the platform has gained more than 1.9 million subscribers for its ad-supported service in third trimester.
Looking ahead, Netflix is expanding into live events, which are attractive to advertisers. In November, the platform will stream a boxing match featuring YouTube personality Jake Paul and boxing legend Mike Tyson. This will be followed by Netflix’s first NFL game broadcasts in December.
Mike Proulx, research director at Forrester, commented on the appeal of live events for advertisers, noting that this type of programming has the power to “bring people together and unite for a single moment,” providing an ideal opportunity for brands to broadcast their advertising messages to a captive audience.
Reuters contributed to this article.
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