Netflix is looking unstoppable right now as profit rises and a ‘Squid Game’ bump is right around the corner

A good year for Netflix is only getting better, as the streaming giant saw its ranks of paid subscribers surge 14.4% to 282.7 million members during the third quarter of 2024.

The company also reported revenue and earnings that exceeded Wall Street forecasts, with revenue up 15% in the three months ended September 30 to top $9.8 billion, and earnings per share at $5.40.

Shares of Netflix rose more than 3% in after-hours trading; the stock has surged nearly 48% so far this year. That’s more than double the year-to-date gains for the Nasdaq 100, a benchmark of largely tech companies.

In the trenches of the streaming wars

Netflix has continued to maintain its dominance in an increasingly crowded market for streaming, and is seeing big gains in its lower-priced, advertising-supported plans. The Las Gatos, California-based company reported that membership in its ads plan grew 35% from the prior quarter and accounted for more than half of sign-ups in the countries where it’s available. Netflix plans to roll out the ads plan in Canada next month, followed by a broader global rollout in 2025.

The company also said it expects paid net additions to be higher in the fourth quarter thanks to “normal seasonality and a strong content slate,” which includes the second season of Squid Game, the Jake Paul vs. Mike Tyson fight, and two NFL games scheduled to air on Christmas Day.

The United States and Canada remain Netflix’s largest market, with about 44% of revenue generated from these countries in the third quarter—a share that’s remained largely consistent over the past two years.

Trump churn proves inconsequential

Despite a widely circulated report about Donald Trump supporters ditching the streaming service over the summer, politically motivated cancellations proved inconsequential.

Netflix saw the rate of U.S. cancellations nearly triple in the days immediately after Reed Hastings, its cofounder and chairman, endorsed Vice President Kamala Harris for president on July 22 and donated millions to her campaign, according to data from Antenna reported by Bloomberg News. July 26 marked the single worst day of cancellations for the year.

However, Netflix churn is far lower than that of its competitors, which is part of the reason why the temporary spike was even noticeable. Overall, the company’s subscriber numbers continue to show an upward trend.

Circulation has been swirling lately that Netflix could be poised to increase prices on its plans soon—and potentially as soon as this week—which could cause further churn. The last time the company did a price adjustment was in 2022.

Still, it seems Netflix subscribers are hooked, at least for the time being. The company reported that paid members view about two hours’ worth of content per day and that viewership increased in the first nine months of the year.

It cited recent hits including the latest season of Bridgerton, Baby Reindeer, Under Paris, and The Roast of Tom Brady, which it said attracted its largest live audience yet.

The company has branched out in recent years to shake up its programming by backpedaling on some prior promises that it would “never” venture into things like original programming, advertising-supported streaming, or live sports.

At the Fast Company Innovation Festival last month, Netflix co-CEO Ted Sarandos said the company would remain nimble and open to change. “I think we should always reserve the right to get smart,” Sarandos said at the September conference.