Streaming video platform Netflix added more than 8 million new subscribers in the second quarter of 2024, helped by measures to combat multiple users using the same account and the popularity of its flagship series.
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While the company managed to deliver subscriber growth above the 5 million analysts had predicted, the platform’s management provided a cautious outlook for the third quarter, warning that the advertising business would not be a major driver of revenue growth until at least 2026. Netflix faces market saturation in the U.S. and will stop reporting subscriber growth on a regular basis starting next year, leaving investors focused on its relatively new advertising business as a likely source of further growth. Subscriber growth in the third quarter will be lower than in the same period last year, when the crackdown on account sharing was just beginning.
Netflix’s diluted earnings per share for the April-June quarter were $4.88, compared with analysts’ expectations of $4.74. Revenue for the quarter was $9.56 billion, in line with analysts’ estimates. The subscriber base was more than 277 million at the end of June. The number of subscribers to its ad-supported plan grew 34% quarter-on-quarter, but Netflix did not say how many users opted for that option. The company’s ad business is “growing well,” CFO Spencer Neumann said, but the company is experiencing a low base effect — a low initial value that’s easy to build on. Peter Naylor, vice president of advertising sales, will leave his position.
Netflix expects revenue to grow 14% year-on-year in Q3. Three years ago, the company entered the gaming market — later this year, it plans to release a multiplayer game called “The Squid Game” with the release of the second season of the popular Korean series. There will also be games based on the series “Emily in Paris” and the reality show “Selling Sunset.”
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