Sales growth of Netflix depends on two main factors: the number of subscribers of payment and the income average per member.
Since May 2023, Netflix has taken steps to reduce password sharing in USA and parts of EMEA (Europe, Middle East and Africa), which has led to an increase in new subscriptions.
This greatly improved their results, and so It was reflected in the price of its shares:
Netflix recovered all of the dramatic drop, over 75%, that it had suffered. Remarkable.
How did your balance sheet fare?
Its sales were USD 9.600M, which implies a 17% year-on-year growth. Its net profit exceeded expectations and was USD 2.1000M, resulting in a margin of 22%.
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Let’s look at the evolution of your subscribers by region.
- APAC: Asia-Pacific
- LATAM: Latin America.
- EMEA: Europe, Middle East and Africa.
- UCAN: United States and Canada.
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The company reported that Its ad-supported plan reached 40 million monthly active users worldwidea significant increase from the previous year’s 15 million. In addition, Netflix to phase out basic plan in US and France to encourage use of the ad-supported plan.
The increase in prices for ad-free subscriptions and the Repression of password sharing have also contributed to the growth from the subscriber base.
However, Netflix announced that it will stop reporting subscriber numbers and average revenue per member (ARM) starting next year. This has raised concerns about the sustainability of long-term growth.
The balance was very positive overall. The market, as always, had already anticipated these numbers. Not for nothing did the stock rise by 280% since its lows two years ago. Can it continue to rise? For now, yes, the trend is clearly bullish.
And your competition?
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There is no doubt that Netflix remains the industry leader. But competition is becoming increasingly fierce. Amazon Prime Video It was founded 9 years after Netflix (2006 vs 1997) and already has 200 million subscribers. Max, formerly known HBO Max, It has already reached 100 million users in just 4 years of existence.
Netflix has managed to recover remarkably and continues to maintain its reign. There is no doubt that it will have a more challenging future growth that it will have to continue to validate. For now, investors are excited, since the stock is close to historical highs.
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Note: The material contained in this note should NOT be construed in any way as investment advice or a recommendation to buy or sell a particular asset. This content is for educational purposes only and represents only the opinion of the author. In all cases it is advisable to seek professional advice before investing.
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
