Netflix Reports 54% Profit Increase Following Account Sharing Ban

In the first quarter of 2024, Netflix reported a 54% increase in profits, reaching $5.28 per share, which exceeded Wall Street expectations of $4.51 per share. This significant rise in profits was largely attributed to the acquisition of 9.3 million new subscribers worldwide, following the implementation of strict measures to curb account sharing. This growth brought the total subscriber count to 269 million, marking a 16% increase. Despite these gains, Netflix announced that starting in 2025, it will cease to disclose the total number of subscribers, a move that has not been well received by shareholders. The company stated that it will instead focus on user engagement and developing new subscription models to diversify revenue streams, suggesting a strategic shift from emphasizing subscriber growth.

Netflix's co-CEO, Greg Peters, noted that the company will update subscriber data only when significant milestones are achieved, indicating a move away from traditional metrics. This change reflects a broader strategy to evaluate company health more accurately by considering the varying impact of each subscriber on the business. In addition to subscriber and financial metrics, Netflix is also expanding its content offerings, including TV shows, movies, games, and a growing sports division. This includes a notable $5 billion deal to stream World Wrestling Entertainment Raw in the U.S. for the next decade. Highlighted successes from the quarter include the series "Fool Me Once," which garnered 98 million views, and "Griselda," with 66.4 million views.

While Netflix shares initially rose by 30% ahead of the earnings report, they subsequently fell by 4.7%. The company's revenue for the quarter was $9.37 billion, a 15% increase year-on-year, but slightly below the forecast for the current quarter at $9.49 billion. Netflix anticipates annual revenue growth between 13% and 15%.

Source: Gamereactor

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