Netflix to stop disclosing membership numbers from 2025

World's largest streaming service says it is more focused on revenue and operating margin as primary financial metrics

Netflix expects the June quarter revenue to reach more than $9.49 billion. AFP
Powered by automated translation

Netflix has said it will stop disclosing membership numbers and average revenue for each user from the first quarter of the next financial year.

The company said on Thursday that it added more than 9.3 million new subscribers in the first quarter of 2024 compared to analysts’ expectations of 4.8 million.

Over the years, membership numbers and average revenue have remained crucial measurements for investors to gauge the company's financial situation.

The company said these metrics have become “just one component of growth”.

It said that it is now more focused on revenue and operating margin as its primary financial metrics, and engagement as its best proxy for customer satisfaction.

But Netflix said it will keep announcing “major subscriber milestones as we cross them”.

Total paid memberships jumped nearly 16 per cent to 269.6 million in the last quarter, surpassing Wall Street’s expectation of 264.2 million.

Netflix’s January-March period net profit jumped 79.2 per cent yearly to $2.33 billion.

Earnings per share stood at $5.28 while revenue increased almost 15 per cent to $9.37 billion, beating analysts’ expectation of $9.28 billion.

Despite bumper earnings, Netflix’s less-than-expected second quarter revenue and earnings per share forecast dragged the share price down on Thursday.

The world’s largest streaming service expects June quarter revenue to reach $9.49 billion, compared to consensus estimates of $9.51 billion, while it expects $4.68 earnings per share, a quarterly dip of 11 per cent.

It also predicts paid net additions to be lower in the second quarter “due to typical seasonality”.

The company’s stock dropped 4.54 per cent to trade at $583.38 a share in after-hours trading. It closed 0.41 per cent down at $611.15 on Thursday, giving the company a market valuation of $264.48 billion.

“Netflix's earnings beat, followed by a share price drop, serves as a stark warning for companies reporting this season,” Thomas Monteiro, senior analyst at, told The National.

“Against the backdrop of higher rates for longer, it may not be enough to deliver a solid first-quarter performance.

"Companies must urgently convince investors that their margins and cash flows can weather the storm of a more difficult second quarter.”

About 270 million households across over 190 countries now subscribe to Netflix.

With more than two people in each household on average, the company said it has an audience base of more than half a billion people.

Some of the high performing titles during last quarter include Griselda (66.4 million views), Fool Me Once (98.2 million views), The Gentlemen (61 million views) and Queen of Tears (14.2 million views).

“Netflix's strategy of localising content production … is paying off big time on both the margins and the subscriber growth front,” Mr Monteiro said.

"The company's turnaround that started in 2022 has certainly reached a solid point and should continue to lead to stable growth ahead.

But he suggested Netflix shareholders should not react swiftly to the current market reaction as it is “certainly more macro in nature than internal to the company”.

What could be Netflix’s future growth avenues?

The streaming company is transitioning from prioritising subscriber expansion to emphasising profit generation.

Working in this direction, it is employing strategies such as announcing price increases, tightening regulations on password sharing and introducing an advertisement-supported subscription tier to enhance revenue streams.

Currently, its share of TV viewing is less than 10 per cent in every country, leaving plenty of room for growth, Netflix said. Besides films and web series, the company is aiming to boost its slate by adding live events such as comedy, sports, competitions and music shows.

“We are in the very early days of developing our live programming and I would look at this as an expansion of the types of content we offer, the way we expanded to film and unscripted and animation and most recently games,” said co-chief executive Ted Sarandos during the earnings call.

In its letter to shareholders on Thursday, Netflix said it is “very excited” for its much-anticipated live boxing match between Jake Paul and former heavyweight champion Mike Tyson, which it believe will “become a must-watch event this summer”.

“Live, eventised cultural moments … alongside a regular cadence of live programming like WWE Raw will be a real value add for existing and future members,” it said.

Updated: April 18, 2024, 11:15 PM