In the third quarter of 2024, Netflix generated USD 9.82 million in revenue, up exactly 15% on the previous year. Growth has been driven by the attraction of new subscribers due to changes in account sharing that cut off anyone outside the household, price increases and the introduction of advertising plans in many countries over the past two years (23 million users last January, 40 million in May).

Excluding the unfavorable strengthening of local currencies against the dollar, Netflix's income grew by 21% last quarter. Since the last quarter of 2022, the company's revenues have been growing continuously from quarter to quarter. In the first quarter of 2023, income exceeded $8 billion for the first time in history, and in each of the last three quarters, income was over $9 billion. In the current quarter, Netflix expects another record: 10.13 bln (after 14.7% year-on-year growth).

Last quarter, at the operational level, the company reached its recordable profit of 2.91 bln USD and 29.6% margin, against  respectively 2.92 bln and 22.4%, respectively, last year. The last time operating margin was below 10% was noted in the last quarter of 2022. Netflix's net income in the last quarter reached 2.36 bln dollars ($5,40 per share), well above last year's result ($1.68 bln) and slightly above this year's first quarter ($2.33 bln). In the fourth quarter of 2024, the company's profitability is expected to continue to grow significantly year on year, but not set another record. The forecast is for a profit of $2.19 bln and a margin of 21.6% at operating level, with net profit of $1.85 bln.

At the end of September 2024 Netflix had 282.72 mln subscribers globally, 14.4% more than last year (247.15 mln), and added 5.07 million new subscribers in the third quarter alone, which is not only much lower than the record final quarter of 2023 (13.12 mln), but also its worst performance since the first quarter of last year (1.75 mln).

The main subscriber growth in the last quarter was in the Asia-Pacific region (2.28 million). Europe, Middle East and Africa (2.17 million). In the Asia-Pacific region, the average dollar cost of a subscription decreased by 4% year-on-year to USD 7.31. As a result, quarterly revenue increased from USD 948 million to just USD 1.13 billion. In Europe, the Middle East and Africa, the average cost of a subscription changed only slightly, so the significant growth in quarterly revenues (from $2.69 bln to $3.13 bln year-on-year) is an effect of the growing number of customers and the introduction of ad-supported plans in some European countries. In South and Central America, Netflix felt the pain of the falling dollar: average subscription fees in local currency rose 27% year-on-year, but fell 5% in dollar terms. As a result of the annual increase in customers from 43.65 million to 49.18 million, revenues rose from USD 1.14 billion to USD 1.24 billion. The platform continues to earn the most in the US and Canada, where a subscriber pays an average of $17.06 per month. This is 5% more than in 2023. Fees and advertising revenue (year on year) will increase revenue growth from $3.73 bln to $4.32 bln.

Netflix's results and guidance have pleased investors. A week ago on Thursday, the company's shares were up around 4% at the start of after-hours trading. By the end of the session, the stock was trading at $687.65. In recent weeks, Netflix reached its historical high ($730 on 10 October). The platform regained with surplus its sharp price reduction from the first half of 2022, when Netflix noted a small decline in the number of subscribers.

In generally Netflix knows how to keep its subscribers for years. Thanks to that they have been no.1 on the streaming market for a long time. They consistently excel at keeping users longer than their competitors like Apple TV+, Max or Paramount+.

An analysis of the retention cycle shows that most Apple TV+ and Paramount+ users cancel their subscriptions within six months. In contrast, Netflix subscribers, except in APAC, remain subscribed for more than two years.
The APAC region stands out as an exception to Netflix's otherwise strong global retention. A key reason for this is that APAC was the last region in which Netflix launched, only arriving in 2016. In addition, the service is not available in China, one of the largest markets in the region, limiting Netflix's reach in APAC.
There are many reasons why Netflix is a leader among streaming services. Netflix entered the US market in 2007 and expanded globally by 2016. This gave Netflix an advantage over Apple TV+ (2019), HBO Max (currently called MAX, 2000) and Paramount+ (2021-2022), which entered the market at a much more competitive time.
Netflix has a huge content library, which helps it to retain users. Netflix's global catalogue is 302% larger than Paramount+ and a staggering 8,087% larger than Apple TV+. The number of original titles on Netflix is 10 times greater than Apple TV+ and 45 times greater than Paramount+. This sheer volume of content keeps users engaged and subscribed for longer.

Netflix's genre offering is much broader and more interesting. While Apple TV+ only offers two of the top five genres globally: Drama and Comedy. Paramount+ is more focused on regional tastes. For example, in APAC and LATAM, Paramount+ offers four of the top five genres: Comedy, Drama, Action and Adventure. Netflix's genre focus is strong in UCAN, but less appealing in other regions. However, its vast library ensures a wide variety of content that appeals to users around the world. Netflix's productions are well received by many. Many series and movies have become hits and have kept audiences interested for years.
An important factor in staying at the top of the list of streaming services is price. Paramount+ is the most affordable service when comparing standard monthly plans across all regions, except in EMEA where Netflix is cheaper. In EMEA and LATAM, Netflix is the only service offering an ad-supported plan, which averages $4.72 in LATAM. In comparison, Apple TV+ and Paramount+ standard plans are $6.74 and $4.53 respectively. In EMEA, Netflix's ad-supported plan is $3 cheaper than the standard Apple TV+ and Paramount+ options. In APAC and UCAN, Paramount+ also offers ad-supported plans that are cheaper than Netflix's, but they are only available in Australia and Canada.

Netflix's comprehensive and successful strategy and the platform's ability to continuously deliver a very rich, diverse and original content offering at competitive prices is instrumental in attracting new users and retaining existing users, resulting in the lowest churn rate of any video streaming platform.  

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