LOS GATOS, Calif.—Netflix reported another generally strong quarter in its Q3 2024 earnings report, adding more than 5 million new subscribers as revenue increased by 15% year-over-year to $9.8 billion. Operating income, operating margins and earnings per share also increased.
Overall, the streaming service’s net income in Q3 was $2.9 billion, up from $1.9 billion a year earlier. Earnings per share hit $5.40, up from $3.73 a year ago.
Netflix reported that its advertising effort was making “good progress” as the company approached the second anniversary of the launch of its ad business.
“Our ads plan allows us to offer a lower price point for consumers, which is proving to be popular: in Q3, it accounted for over 50% of signups in our ads countries and membership on our ads plan grew 35% quarter over quarter,” the company said in its letter to shareholders. “We’re on track to reach what we believe to be critical ad subscriber scale for advertisers in all of our ads countries in 2025, creating a strong base from which we can further increase our ad membership in 2026 and beyond. We’re also pleased with the engagement on our ads plan with view hours per membership similar to engagement on our standard plan in our 12 ads countries.”
Even so, the shareholder letter stressed that it is “still very early for our advertising initiative. As we said last quarter, it takes time to build a new revenue stream and we don’t expect ads to be a primary driver of our revenue growth in 2025.”
Overall, the company is expecting “our total company revenue to grow 15% year over year in 2024. And we’re making progress with ads monetization, as we saw in this year’s U.S. upfront—closing deals with all major holding companies as well as independent agencies, with a 150% plus increase in upfront ad sales commitments over 2023, in line with our expectations.”
