Internet television network Netflix late Thursday easily beat Wall Street's targets for the third quarter and guided above views for the current period. Netflix stock surged in extended trading.
The Los Gatos, Calif.-based company earned $5.40 a share on sales of $9.83 billion in the September quarter. Analysts polled by FactSet had expected earnings of $5.12 a share on sales of $9.77 billion. On a year-over-year basis, Netflix earnings rose 45% while sales climbed 15%.
Netflix added 5.1 million subscribers in the third quarter, beating views for 4 million. It ended the quarter with 282.7 million subscribers worldwide, up 14% year over year.
Starting with the first quarter of 2025, Netflix will stop reporting quarterly subscriber numbers. The company said it is focused on revenue and operating margin as its primary financial metrics. It will use engagement, or time spent on the service, as an indicator of customer satisfaction.
For the fourth quarter, Netflix forecast $4.23 in earnings per share on sales of $10.13 billion. Analysts had been modeling Q4 earnings of $3.90 a share on sales of $10.04 billion. In the same quarter last year, Netflix earned $2.11 a share on sales of $8.83 billion.
Netflix Stock Jumps After Report
In after-hours trading on the stock market today, Netflix stock popped more than 3.5% to 713.26. During the regular session Thursday, Netflix stock fell 2% to close at 687.65.
"Engagement, our best proxy for member happiness, remains healthy," Netflix management said in a shareholder letter. "As we look ahead to 2025, we're focused on improving every aspect of our service and continuing to deliver healthy revenue and profit growth."
Popular programming on Netflix in the third quarter included new series "The Perfect Couple," "Nobody Wants This" and "Tokyo Swindlers," along with returning favorites like "Emily in Paris" and "Cobra Kai." Hit movies on the platform included "Beverly Hills Cop: Axel F" and "Rebel Ridge."
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