Netflix (NFLX) shares surged 11% on Friday, hitting a record high above $760, after the streaming giant surpassed third-quarter earnings expectations and provided an optimistic forecast for the current quarter.
Revenue for Q3 hit $9.83 billion, beating Bloomberg’s estimates of $9.78 billion and marking a 15% year-over-year increase. The company’s crackdown on password sharing, its ad-supported tier, and last year’s price hikes helped drive this growth.
For Q4, Netflix expects revenue of $10.13 billion, also above consensus estimates of $10.01 billion. The company forecasts 2025 revenue between $43 billion and $44 billion, with an 11%-13% growth over 2024’s projected $38.9 billion. Netflix aims for a full-year operating margin of 27%, up from last year’s 26%.
Earnings per share (EPS) in Q3 came in at $5.40, exceeding expectations of $5.16 and significantly higher than the $3.73 reported last year. Netflix projects Q4 EPS of $4.23, ahead of the $3.90 consensus.
Subscriber growth remained strong with 5.07 million new users, surpassing the forecast of 4.5 million. Breakout shows like The Perfect Couple and Nobody Wants This contributed to this momentum. Netflix expects even higher subscriber gains in Q4 with hits like Squid Game Season 2 and live events like the Jake Paul vs. Mike Tyson fight.
Investors have applauded Netflix’s venture into sports and live programming. The ad-supported tier also gained traction, contributing over 50% of sign-ups in countries where it’s available.