Netflix added more than eight million subscribers in its second quarter, taking its total global memberships to nearly 278 million.
The rise was above analysts’ expectations and confirmed Netflix’s position at the head of the streaming race.
Netflix’s subscription growth has been helped by its crackdown on password sharing and the addition of a cheaper, ad-supported tier. It has also been boosted by hit shows such as Baby Reindeer and Bridgerton.
The streamer said its ad-supported memberships grew 34% during the period compared to the same quarter last year.
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Revenue was roughly $9.6bn, up 17% compared to the year-earlier period, driven primarily by the increase in average paid memberships. The company reported net income of $2.15bn, up from $1.49bn during the second quarter of 2023.
However, Netflix issued cautious guidance for the third quarter and said its advertising business would not become a primary driver of revenue growth until at least 2026.
“Our ad business is growing nicely and is becoming a more meaningful contributor to our business,” Netflix said in a letter to investors. “But building a business from scratch takes time - and coupled with the large size of our subscription revenue - we don’t expect advertising to be a primary driver of our revenue growth in 2024 or 2025.”
Last quarter, the company warned investors it would stop providing quarterly membership numbers or average revenue per user beginning in 2025, noting the company is “focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction.”
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