Netflix plans to stop reporting subscriber numbers in 2025, saying subscriber numbers have become an important metric for the company’s standing. This announcement was made in conjunction with the platform’s latest subscriber update.
The streaming service added 9.33 million subscribers in the first quarter of 2024. This means that Netflix currently has approximately 270 million subscribers worldwide.
In the United States and Canada, paid members increased by 2.53 million. Europe, Middle East and Africa added 2.92 million subscribers. Latin America added 1.72 million subscribers, and the Asia Pacific market added an additional 2.16 million.
This was reported as a significant increase in the number of contracts, which exceeded expectations.
At the same time, Netflix said in a letter to shareholders that the platform’s subscriber reporting is no longer as important as it used to be and will stop reporting it starting in the first quarter of 2025.
Netflix said engagement and time spent on service are “the best indicators of customer satisfaction.” variety report. The company maintained that it will continue to make announcements “once we pass key subscriber milestones,” but will discontinue quarterly subscriber reporting.
Co-CEO Greg Peters reportedly said on the earnings call that features on the platform are making subscriber numbers less important. This includes an example of how the primary account holder can add additional members to the account for a fee and those members will not be counted as additional subscribers.
“As stated in a previous letter, we are focused on revenue and operating margin as our key financial metrics, and engagement (i.e. time spent) as the best indicator of customer satisfaction. “In the early days, we had very little revenue. Profits and membership growth were strong indicators of our future potential,” Netflix reported. “But now we are generating very strong profits and free cash flow (FCF), and we are also developing new revenue streams such as advertising and additional membership features. It’s just an element.”
How good are the numbers?
It’s a big concern for the company that subscription numbers are starting to plateau, as members from overseas continue to pour into the service, making what it considers a success an obvious step in a change of direction. ing.
Revenues for the first quarter of 2024 increased significantly by 15% compared to the first quarter of 2023, with revenue of $8.73 billion and net income of $2.33 billion. The aforementioned free cash flow is reportedly a whopping $2.13 billion.
For the second quarter of 2024, Netflix expects revenue to be approximately $9.5 billion and net income to be $2.06 billion, about the same as the first quarter. The company expects revenue growth of 13% to 15% for the full year of 2024, at least twice the growth rate in 2022.
“As we have evolved our pricing and plans from a single tier to multiple tiers with different prices depending on country, each increment of paid membership has a significantly different impact on the business. “We will discontinue providing guidance on paid memberships per quarter and will discontinue quarterly membership and ARM reporting next year, with first quarter 2025 earnings,” the company added.
Future reports will focus on revenue, which serves as a “complementary” to the company’s financials, and will forecast quarterly revenue, operating income, net income, and earnings per share, but not subscriber numbers. .
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