fter reporting third-quarter earnings and revenue, Netflix shares jumped this Friday. Netfli’s shares were 5.6% in the premarket trading in the US at 6 a.m. ET.
Even more, Netflix reported $5.40 the cost of their earning per share in the three-month period that ended on September 30. This value surpassed the estimates of $5.12 from the LSEG consensus estimate.
Their revenue also surpassed expectations that came in at $9.83 billion which is over the $9.77 billion that analysts have already anticipated. It is also worth mentioning that Netflix saw the perfect moment in its ad-supported membership tier when it grew 35% quarter-over-quarter.
Yet, as Netflix does not expect its ads to become its main source of growth until 2026, Netflix also said that its ad tier was responsible for over 50% of sign-ups in Q3, in the countries where the option exists. At the event held this Thursday, Netflix also expects the December quarter to rise in revenue up to 14.7%, meaning $10.128. The revenue that is expected is $43 billion up to $44 billion in 2025.
Analysts at Citi reported in a note that Netflix’s earnings in the fourth quarter “exceeded the Street” and that the 2025 forecast “was relatively in line with consensus estimates.”. The analysts from Citi also said, “All told, we would expect to see shares trade higher”.
Executive Director of Amper Analysis, Richard Broughton said in an interview for CNBC that Netflix, despite the media landscape, benefited from the continuous investment in content.
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Broughton said “It’s a good indicator that some of the growth that dropped out of the market in 2022 is returning. If you think about the last 24 months, we’ve had cutbacks in content expenditure, hiring freezes, redundancies in some of the major studios and streamers. And all through this, Netflix has tried to keep investing in content. That sets it up extremely well over the next couple of years,”.
He also added “If we think about scripted TV, dramas, romance, and science fiction, Netflix is going to be responsible for not far off one in 10 global series next year. It’s in a very, very different position compared to some of its competitors just in terms of scale,”.
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