Netflix Achieves Impressive Subscriber Growth for Another Quarter, Adding 9.3 Million New Paying Subscribers in the First Quarter, Nearly Double the 4.8 Million Expected by Analysts According to Consensus Estimates from Visible Alpha. This Highlights the Ongoing Effectiveness of Measures Against Password Sharing Introduced by Netflix Last Year. Since the Start of this Initiative, Netflix Has Added Over 31 Million Subscribers in the Past Three Quarters – More Than Double the Number in the Previous Three Quarters.

Despite Strong Subscriber Growth, Quarterly Revenue of Nearly $9.4 Billion Barely Meets Wall Street Forecasts. Additionally, Netflix Announces Its First Annual Revenue Forecast, Which Aligns With Analyst Expectations of 13% to 15% Growth for the Year. In Another Change, the Company Announced It Will Stop Publishing Subscriber Data Starting Next Year.

This announcement was not well received by investors and led to a nearly 5% decline in Netflix shares in after-hours trading on Thursday. "We suspect that the reduced disclosures could disappoint Wall Street," noted Jason Bazinet of Citigroup following the results.

Netflix has been trying for some time to get investors to focus less on subscriber growth. This is an enormously unpredictable figure, one that even the company has had difficulty forecasting accurately. At the end of 2022, Netflix announced it would no longer provide quarterly subscriber forecasts after these projections fell short of Wall Street's consensus expectations in every quarter but one over a three-year period, often leading to significant fluctuations in the stock.

The focus is now shifting to revenue growth, which is typically more stable and, according to Netflix, a better metric for the performance of a business that now encompasses multiple price categories, paid sharing accounts, and advertising. What goes unsaid is that a streaming service with almost 270 million paying members might struggle to find a similar number of untapped viewers in the future. Are there still 100 million left who have so far avoided "Stranger Things," "Bridgerton," and "Squid Game"?

This Shift in Focus Will Now Pose New Challenges for Netflix, Either to Raise Prices or to Attract More Viewers to Its More Affordable but Potentially More Lucrative Advertising Tariff, Which Offers Higher Average Revenue Per Member Than Many of Its Ad-Free Plans. Advertising is Still a Relatively Small Business; Analysts Predict that Advertising Will Account for Only 4% of Netflix's Total Revenue This Year and 7% Next Year, According to Current Forecasts by Visible Alpha.

Fortunately, the company still has an apparently insurmountable lead over its major media streaming competitors, whether in terms of subscribers, profits, or cash flow. Netflix projects an operating margin of 25% for this year – a year in which Disney expects its own streaming business to just become profitable.

And it even gets some help from its competitors as these media rivals start to license some of their most popular content to Netflix in order to obtain urgently needed money. The HBO hit series "Sex and the City" appeared on Netflix this month, and Co-CEO Ted Sarandos said on a call Thursday that "the floodgates for licensing are certainly a bit more open." Netflix will remain the most popular player in the streaming area for a long time, even if it becomes less clear how many are watching.