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Netflix’s victory lap as the leader in streaming continued on 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 to $938 million in the same period in 2023.
The company beat Wall Street’s estimates on revenue, subscriber additions and net income, according to FactSet. Analysts on average had projected that Netflix would increase its customer base by around 5.5 million subscribers, FactSet calculated.
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.
Netflix’s stock price has increased 30% so far this year.
Netflix’s stock has recovered more than two years after subscriber losses and disappointing results sent its price spiraling. Netflix shares closed at $611.15 a share on Thursday, down 0.4%. The shares fell about 5% in afterhours 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 due to its content prowess with licensed titles, such as “Suits,” and original programs, including international productions, K-dramas, reality shows, live events and sports documentaries.
In the first quarter, Netflix’s new shows included the live-action version of “Avatar The Last Airbender,” based on the popular Nickelodeon series. The show was renewed for two additional seasons. Other popular shows and movies in the first quarter include fantasy adventure movie “Damsel” and the romantic limited series “One Day.”
Netflix also benefits from its recommendation technology, with which rivals are still playing catch-up. 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 earlier this year.
While many analysts are bullish on Netflix’s prospects, some note that the company has limits to how much it can grow in the United States and Canada, where many households already subscribe to the platform. The streamer also will need to look to continue its pipeline of popular shows, as some of its series with large fan bases such as “Stranger Things” and “Cobra Kai” are approaching their final seasons.
The streamer 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 2025. Netflix also will stream live fights, including one between Jake Paul and Mike Tyson in July.
Analysts are looking for more details about Netflix’s movies strategy, after its longtime 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 of Netflix’s movie strategy have pointed out that the streamer may make more money by investing its dollars into 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 the company’s strategy.
A New York Times report, citing unnamed sources, said that Lin aims to make more quality films, with varying budgets, and change the formula for how talent is compensated. Netflix declined to comment.
“Everyone wants to make better and cheaper films, but we find it hard to believe there is a magic formula,” wrote analysts at LightShed Partners in a blog post for clients. “Help us understand the strategy shift under Lin vs. former Netflix film chief Scott Stuber.”
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