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Netflix adds 9.33 million new subscribers in Q1 2024

Netflix Inc. has reported adding 9.33 million customers in the first quarter of 2024, posting a strong start to a year since 2020.

This figure nearly doubled the 4.84 million average projected by analysts. The surge in subscribers is attributed to a compelling lineup of original content and the implementation of measures to curb password sharing.

The company witnessed robust growth across global markets, with particularly notable strength in the US and Canada. The influx of new subscribers also contributed to better-than-expected sales and earnings figures.

However, Netflix shares experienced a 4.6% decline to $582.70 at 6:03 p.m. New York time, following the announcement. However, the shares had previously surged by 25% earlier in the year up to the close of regular trading on Thursday.

There has been high expectations for Netflix’s first quarter in anticipation of substantial subscriber gains. In response to the heightened interest, Netflix stated in its investor letter that subscriber growth would moderate in the coming period. Revenue is also projected to rise by 16%.

Netflix announced its decision to discontinue reporting paid quarterly memberships and revenue per subscriber, commencing with the first quarter of 2025. This move aims to redirect focus towards traditional performance metrics such as sales and profit, while major subscriber milestones will continue to be reported.

However, there are concerns regarding the cessation of quarterly subscription disclosures, particularly given Netflix’s remarkable subscriber growth over the past year. The company’s resurgence can be attributed to its crackdown on unauthorized account sharing, which it estimates has exceeded 100 million users. Despite initial apprehensions of customer backlash, Netflix succeeded in persuading many unauthorized users to become paying subscribers.

Netflix’s success in attracting new subscribers has been bolstered by its diverse content offerings, including popular series such as Fool Me Once, Griselda, The Gentleman, and 3 Body Problem, as well as reality shows like Love Is Blind.

With its extensive programming and ambitious global reach, Netflix commands approximately 8% of TV viewing in the US and maintains a dominant position in major media markets worldwide.

The recent growth has propelled Netflix shares close to record highs, with a market value surpassing $260 billion. However, concerns persist among analysts regarding the company’s valuation relative to its fundamentals. Nonetheless, Netflix continues to innovate, introducing a cheaper, ad-supported subscription tier to attract budget-conscious consumers and venturing into live programming such as stand-up specials, wrestling, and live sports events.