Netflix reported improving its product-market fit in APAC(Asia-Pacific), supported by a strong local content lineup in Japan, Korea, Thailand, and India during Q3. This led to a 19 percent year-over-year revenue growth in the APAC region, the highest among all markets. Additionally, the platform added 5.1 million new subscribers.
What happened
In Q3 2024, Netflix’s revenue grew by 15 percent, surpassing its forecast, with average paid memberships increasing 15 percent YoY and 5.1 million net subscriber additions. Regional highlights include a 16 percent revenue rise in both UCAN and EMEA, and a leading 19 percent growth in APAC, driven by strong local content.
Netflix emphasised improving its product-market fit in APAC, with standout local content in Japan, Korea, Thailand, and India fueling the region’s top-performing revenue growth.
ATAM saw a 9 percent revenue rise, though paid net additions dipped slightly due to recent price changes. Operating income jumped 52 percent YoY to $2.9 billion, with an improved operating margin of 30 percent. EPS increased 45 percent to $5.40, despite a $91 million foreign exchange loss from Euro-denominated debt.
Netflix reported a healthy engagement of around two hours per day per paid membership, despite the impact of paid sharing. Viewing hours for owner households increased year over year in the first three quarters of 2024, excluding the effect of paid sharing.
New Additions
In the third quarter, Netflix gained 5.1 million streaming subscribers, surpassing Wall Street estimates by over 1 million, and anticipates even more growth during the holiday season with the return of the Korean drama “Squid Game.”
The company reported that its ad-supported service made up over 50 percent of signups in markets where it was offered, while analysts had predicted 4 million new subscribers from July to September.
Future Outlook of Netflix
According to Netflix, the company is on track to achieve what it considers critical ad subscriber scale for advertisers in all ad-supported countries by 2025, laying a strong foundation for increasing ad membership in 2026 and beyond.
The company is encouraged by the engagement levels on its ad-supported plan, with view hours per membership comparable to those on its standard plan across 12 ad-supported markets.
However, improving offerings for advertisers remains a priority in the coming years. Netflix’s in-house first-party ad tech platform is set to launch in Canada next month, with plans for a broader rollout in all ad-supported countries in 2025.
Stock Price Movement
Pre-market indicative price of Netflix Inc featured a 5.5 percent increase to $725.94 per share on Friday, from its previous close of $687.65 each.
About the Company
Netflix is an American subscription video on-demand over-the-top streaming service. The service primarily distributes original and acquired films and television shows from various genres, and it is available internationally in multiple languages.
Written by – Siddesh S Raskar
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