In the second quarter of 2024, the Netflix video streaming platform attracted more than 8 million new subscribers, driven by measures to combat the use of one account by multiple users and the popularity of its flagship series.
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Although the company managed to achieve subscriber growth higher than the 5 million predicted by analysts, the platform’s management provided a rather cautious forecast for the third quarter and warned that the advertising business will not become a major driver of revenue growth until at least 2026. In the US, Netflix has faced market saturation and will stop regularly reporting new subscribers starting next year, so investors have focused on the relatively new advertising business as a likely source of further growth. Subscriber growth in the third quarter will be lower compared to the same period last year, when the fight against account sharing was just beginning.
In the April-June period, Netflix reported diluted earnings per share of $4.88, compared to analysts’ forecast of $4.74. Revenue for the quarter was $9.56 billion, in line with analyst estimates. The subscriber base at the end of June exceeded 277 million. The number of subscribers on the ad-supported plan grew by 34% quarter over quarter, but Netflix did not specify how many users chose this option. The company’s advertising business is showing “good growth,” said company chief financial officer Spencer Neumann, but in this case, the effect of a low base – a low initial value from which it is easy to build on – is affecting. At the same time, Vice President of Advertising Sales Peter Naylor will leave his position.
For the third quarter, Netflix expects revenue to grow 14% year-over-year. Three years ago, the company entered the gaming market – at the end of this it is going to release the multiplayer game “Squid Game” with the release of the second season of the popular Korean series. Games based on the series “Emily in Paris” and the reality show “Selling Sunset” will also be released.