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Los Angeles – Netflix On Thursday, it reported third-quarter earnings that beat the bottom line as its advertising business continues to grow.
Ad tier memberships for streamers jumped 35% QoQ. The company is on track to launch the service in Canada next quarter and more widely in 2025.
While Netflix doesn't expect advertising to become a primary driver of growth until 2026, it noted that advertising level represented more than 50% of subscriptions during the third quarter in countries where it is available.
Shares rose nearly 4% in aftermarket trading.
Here's what Netflix reported for the period ending September 30:
Earnings per share: $5.40 vs. $5.12 expected from LSEG Revenue: $9.83 billion vs. $9.77 billion expected from LSEGPaid Memberships: $282.7 million vs. $282.15 million expected, according to StreetAccount
Net income for this period amounted to $2.36 billion, or $5.40 per share, compared to $1.68 billion, or $3.73 per share during the same quarter of the previous year. Revenue jumped 15% to $9.83 billion from $8.54 billion the previous year.
The company indicated on Thursday that it expects fourth-quarter revenue to reach $10.13 billion and earnings per share to reach $4.23.
Netflix expects its full-year 2025 revenue to be between $43 billion and $44 billion, as it improves its core series and movie offerings and invests in new initiatives like advertising and games. Much of this revenue growth is expected to come from what the company called a “healthy increase in paid memberships.”
Netflix added 5.1 million subscribers during the quarter, more than the 4.5 million Wall Street expected, according to StreetAccount estimates. In total, the streaming service now has 282.7 million memberships across all of its price tiers.
Starting in 2025, Netflix will no longer update investors on its subscriber numbers as the focus shifts toward revenue and other financial metrics as indicators of performance.
The company promoted new shows like “The Perfect Couple,” “Nobody Wants This” and “Tokyo Swindlers,” along with returning seasons of “Emily in Paris” and “Cobra Kai,” as well as big blockbusters like “Beverly Hills Cops: Axel.” F,” “Rebel Ridge” and “Black Belt Officer” achieved high ratings.
Netflix is set to launch a second season of the hit show “Squid Game” in the fourth quarter along with live sporting events such as a boxing match between Jake Paul and Mike Tyson as well as two National Football League matchups on Christmas Day.
Correction: This story has been updated to correct Netflix's reported and estimated third-quarter revenue. The company reported $9.83 billion compared with $9.77 billion expected, according to LSEG.
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