Netflix has published its first quarter earnings for 2024 showing a big jump in revenue as subscriber numbers jumped by 9.3m, higher than the streamer had forecast.

Netflix now has 269.6m subscribers worldwide.

Netflix reported that in Q1, revenue grew 15% year over year, driven primarily by membership growth as well as pricing.

In a letter to shareholders, the company said it was “off to a good start in 2024. Compared to Q1‘23, our revenue was up 15%, our operating income grew by 54% and our operating margin rose by seven percentage points to 28%.”

The company is now forecasting revenue growth of 13% to 15% for 2024 and said that to “sustain healthy growth long term, we must continue to improve the variety and quality of our entertainment… innovate in our product and marketing” and “tap into additional revenue and profit pools — in particular scaling ads to become a more meaningful contributor to our business in ‘25 and beyond.”

Big hits in its series slate included dramas Griselda (66.4M views) and 3 Body Problem (39.7M views); Avatar: The Last Airbender (63.8M views), reality TV with Love Is Blind S6 (20.0M views); true crime with American Nightmare (50.2M views); and stand up with Dave Chappelle: The Dreamer (18.4M views).

It said its UK content had a stand-out quarter with Fool Me Once (98.2M views), The Gentlemen (61.0M views), One Day (36.0M views) and Ricky Gervais: Armageddon (12.7M views).

Despite reporting the subscriber jump in the first quarter, Netflix says it still plans to phase out subscriber number reporting by 2025 as “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. In addition, as we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact. It’s why we stopped providing quarterly paid membership guidance in 2023 and, starting next year with our Q1’25 earnings, we will stop reporting quarterly membership numbers and ARM.”

Jon Creamer

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