Netflix’s victory lap as the leader in streaming continued Thursday, as the company said it increased its subscriber base by 9.3 million to nearly 270 million in the first quarter.
Revenue was up 15% to $9.37 billion in the first quarter, the Los Gatos, Calif. streamer reported. Net income was $2.3 billion, compared with $1.3 billion in the same period in 2023.
The company beat Wall Street’s estimates on revenue, subscriber additions and net income. Analysts on average had projected that Netflix would increase its customer base by around 5.5 million subscribers, according to FactSet.
Netflix has impressed investors as the company cracks down on password sharing, grows its lower priced ad-supported subscription tier and puts out a steady stream of popular original programs.
The steamer’s stock price has increased 30% so far this year and has recovered more than two years after subscriber losses and disappointing results sent the stock spiraling. Its shares closed at $610.56 Thursday, down 0.5%. The shares fell about 5% in after-hours trading.
“When analyzing key metrics such as subscribers, profitability, and audience demand, it’s clear that Netflix is pulling away from the competition and everyone else is fighting for second place,” Parrot Analytics analyst Wade Payson-Denney wrote in a report.
Netflix has remained the dominant subscription streaming platform in part because of its content prowess of licensed titles, such as “Suits,” and original programs, including international productions, K-dramas, reality shows, live events and sports documentaries.
In a letter to shareholders Thursday, the company forecast revenue growth of 13% to 15% this year. The number of sign-ups for subscriptions with ads grew 65% in the first quarter.
“We’re off to a good start in 2024,” the letter said.
New shows have included the live action version of “Avatar: The Last Airbender,” based on the popular Nickelodeon series. The series was renewed for two additional seasons. Other popular titles include the fantasy adventure movie “Damsel,” the drama “Griselda,” and the romantic limited series “One Day.”
Rivals are still trying to match Netflix’s recommendation technology. Walt Disney Co. Chief Executive Bob Iger called Netflix’s technology the “gold standard.” “We need to be at their level in terms of technology capability,” Iger said at a Morgan Stanley conference this year.
Although many analysts are bullish on Netflix, some note that its growth prospects are limited in the United States and Canada, where many households already subscribe to the platform.
The streamer also needs to replenish its reservoir of popular shows, as some of its series with large fan bases such as “Stranger Things” and “Cobra Kai” are approaching their final seasons.
Netflix has been adapting popular manga and anime series such as “One Piece” and working with producers including “Game of Thrones” showrunners David Benioff and D.B. Weiss. Benioff and Weiss, alongside co-creator Alexander Woo, adapted the Chinese sci-fi trilogy “Remembrance of Earth’s Past” into the show “3 Body Problem,” which launched last month.
The company also is investing in live events and sports-related content, including signing a major deal with the WWE to bring its flagship weekly pro-wrestling show “Raw” to Netflix in January.
Analysts are looking for more details about Netflix’s movies strategy, after its long time film chief Scott Stuber left his position and was replaced by Dan Lin, founder of production company Rideback.
Under Stuber’s leadership, Netflix collaborated with high-profile, A-list stars and directors and won critical acclaim for movies including “The Power of the Dog” and “Roma,” though winning an Oscar for best picture has proved elusive.
Critics have pointed out that Netflix may make more money by investing in series rather than films because there are more hours of content for viewers to consume. Netflix executives have maintained that having original movies on the platform is a key part of their strategy.
“There is no appetite to make fewer films, but there is an unlimited appetite to make better films always,” Netflix co-Chief Executive Ted Sarandos said in an earnings presentation.
Another change that’s afoot — Netflix said starting with its first quarter in 2025, it will no longer provide quarterly membership numbers.
