## Netflix Shifts Focus from Subscriber Numbers to Revenue and Operating Margins
In a surprising move, Netflix announced it would no longer report subscriber numbers on a quarterly basis. This decision signals a potential plateau in the company's subscriber growth, following years of intense competition in the streaming landscape.
Despite adding a significant 9.3 million new customers in the first quarter, exceeding analyst expectations, Netflix's stock price fell after hours. The company attributed its success to its ad-supported streaming plans, which have proven popular since their launch in November 2022.
Netflix executives emphasized a shift in focus towards revenue and operating margins as key indicators of progress. Co-CEO Greg Peters explained, "This change is really motivated by wanting to focus on what we see are the key metrics that we think matter most to the business."
However, concerns remain about the sustainability of new sign-ups once the company exhausts its efforts to mitigate password sharing.
This move echoes similar decisions by other tech giants like Meta and Twitter, who stopped reporting monthly active users as growth rates slowed.
Despite the challenges, Netflix remains a dominant force in the streaming industry. Its shares have surged by 89% in the past year, outperforming competitors like Walt Disney.
The company outlined plans for future growth, focusing on enhancing the quality and diversity of its content offerings and expanding its advertising business. Co-CEO Ted Sarandos expressed enthusiasm about the upcoming content slate, promising new seasons of popular shows and unscripted events.
Financially, Netflix exceeded analyst expectations for earnings per share in the first quarter. Revenue climbed by 14.8%, and operating income increased by 54% year-over-year.
Looking ahead, the company projected a revenue of $9.49 billion for the current quarter, slightly below analyst estimates.
To cater to its global audience, Netflix is diversifying its content, including a $5 billion deal to stream WWE's "Raw" starting in January 2025.
Sarandos addressed recent speculation about Netflix's film strategy, clarifying, "There is no appetite to make fewer films. But there is an unlimited appetite to make better films, always.