Netflix‘s revenue grew 15% YoY to $9.37 billion in Q1 2024, driven primarily by membership growth as well as pricing. Additionally, the video streaming platform also gained 9.33 million new subscribers during this period, which is more than a five-fold increase from 1.75 million subscribers that were added in Q1 2023.
In Q1 2024, the number of subscribers for the video streaming platform went up to 269.6 million. This is an increase from 260.28 million in the last quarter and 232.5 million compared to last year. In the Asia-Pacific (APAC) region, there were 2.16 million new subscribers, making the total number of subscribers 47.5 million. In Q123, there were 1.46 million new subscribers, bringing the total to 39.5 million.
Operating income went up by 54%, amounting to $2.63 billion. Net income saw a 79% rise, reaching $2.3 billion.
The video streaming platform said, “Our two priorities in ads are to scale our member base and to build out our capabilities for advertisers. We made progress on both fronts in Q1. Our ads membership grew 65% quarter on quarter (after rising nearly 70% sequentially in each of Q3’23 and Q4’23) with over 40% of all signups in our ads markets coming from our ads plan.”
“Our primary financial metrics are revenue for growth and operating margin for profitability. Our goals are to sustain healthy revenue growth, expand our operating margin and grow free cash flow,” the company said.
Netflix, in a letter to its shareholders, said that starting from Q1 2025, tit will stop reporting quarterly membership numbers and average revenue per member as they now have different prices for their service depending on the country, so each incremental paid membership has a very different business impact.
Explaining the move, the platform said, “As we have noted in previous letters, we’re focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction. In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth.”
“For Q2 2024, we forecast revenue growth of 16%. This equates to 21% growth on a F/X neutral basis due
primarily to price changes in Argentina and the devaluation of the local currency relative to the US dollar. We expect paid net additions to be lower in Q2’24 vs. Q1 2024 due to typical seasonality. We forecast global ARM to be up year-over-year on a F/X neutral basis in Q2,” Netflix stated.
