Netflix Stock Ticks Up On Earnings Beat: Streamer Stresses Engagement As It Plans To Stop Reporting Quarterly Subscriber Numbers Next Year

Netflix shares are up close to 4% in after-market trading as the company’s third-quarter numbers beat on the bottom line and subscriber numbers – which the streamer will not routinely release on a quarterly basis starting next year.

The letter to shareholders that accompanies Netflix earnings did talk about engagement, an indication of what it might focus more on when that happens.

“Engagement on Netflix is healthy: around two hours a day per paid membership on average, despite the impact of paid sharing,” said the letter, which co-CEO Ted Sarandos also noted at the kickoff of the quarterly earnings call.

“As we’ve discussed before, paid sharing led to lower viewing on accounts that were shared as fewer people were watching on them. In addition, when sharers bought their own subscriptions, much of that viewing was already reflected in hours viewed (impacting the trend in view hours per membership). When you isolate owner households (which excludes the impact of paid sharing), view hours for those owner households rose year over year in the first three quarters of 2024,” Netflix said.

The streamer said today it gained 5.1 million subscribers from the previous quarter ending at 272.2 million, beating Wall Street estimates, as did earnings per share of $5.40.

For years, subscriber numbers have buffeted the stock on earnings day, up and down. The company has said that it’s matured since then and there are other more important factors to consider when assessing its financial health. In a letter to shareholders along with first-quarter earnings, the company said it’s now focused on other metrics and that memberships “are just one component of our growth.”