Netflix co-CEOs Ted Sarandos and Greg Peters
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Netflix announced first-quarter results Thursday, adding 9.3 million subscribers and extending its lead as the dominant platform for subscription streaming TV.
The company currently has 269.6 million subscribers worldwide. The company announced in its quarterly letter that it will stop reporting subscriber numbers and average revenue per member starting in the first quarter of 2025.
Netflix reported $9.4 billion in revenue and $2.6 billion in operating profit, both of which were significant increases from the same period last year.
For the second quarter, the company expects revenue growth to be 16%, although seasonality will reduce net accruals. The company expects annual sales to increase 13% to 15% this year.
Netflix has been underperforming in recent months, with a steady stream of programming, recent efforts to crack down on password and account sharing, and a foray into advertising through its initial low-cost service, resulting in hundreds of millions of yen per quarter. We are increasing our subscriber base by 10,000. advertising layer. In the fourth quarter, typically the company’s strongest quarter, it reported 13 million new subscribers.
In a letter to shareholders, the company said it would further strengthen its advertising business (its subscriber base grew 65% in the quarter, the company said) and offer “more great TV shows and movies, more powerful games, and more. A must-see live show.”
Or, as co-CEO Ted Sarandos said on the earnings call, Netflix is focused on creating a “consistent, reliable and predictable drumbeat of hit shows, movies and games.” “We have put in place ” That’s our business. And that’s what we have to do every day. We have to do it all over the world. ”
Sarandos also weighed in on the company’s sports and live events strategy, telling analysts that they are “in the very early stages of developing live or live programming,” which could include unscripted films or He said it’s an expansion of a strategy similar to the addition of live programming. Games are also a service.
Netflix “is not anti-sports, it’s a company that promotes profitable growth,” Sarandos continued. “Our North Star is to grow engagement, revenue and profit. And as we identify opportunities to drive all three, we intend to do so across an increasingly diverse range of high-quality entertainment. So whenever an opportunity like that comes along, we can go in there and do it — we feel like we did with our deal with WWE — and other things, including sports. But if we can recreate that dynamic, we’ll definitely consider it.”
On the advertising side, co-CEO Greg Peters detailed how the company plans to grow its business, telling analysts: Currently being applied to the advertising layer. So this obviously means partner his channel, device integration, bundling, integrated payments. ”
“So we’re making good progress, but we still have a lot of work to do in terms of scaling up,” he continued. “We still have work to do in terms of effective go-to-market, more technical capabilities, and more advertising products. There’s a lot of work ahead when it comes to advertising.”
And the company also used this opportunity to leapfrog toward its position as a leader in streaming. While the company touted its more than 1 billion followers on social media and its marketing power, it also made its own claims.
“Our most direct promotional tool is Netflix itself, which has become the go-to place for so many people looking for entertainment,” the letter said, noting that the number of trailer views on the platform He pointed out that it had reached hundreds of millions of times. “This hard-to-replicate combination of our reach, recommendations, and fandom makes Netflix
It incorporates stories into culture in a way that few people can duplicate. ”
Netflix also made some adjustments to its capital structure, expanded its revolving credit facility to $3 billion, and clarified its capital strategy, saying, “We continue to prioritize profitable growth by reinvesting in our business and “We will maintain a strong balance sheet and ample funds.” Increase liquidity and return excess cash (above the billions of dollars in minimum cash, cash used for selective M&A) to shareholders through share buybacks. ”
