Netflix revenue climbs to $9.4bn as ads boost streaming giant

Streaming service brought in 9.3 million new customers, blowing past analysts' expectations for the second straight quarter

Emmet J Scanlan and Michelle Keegan in Netflix's 'Fool Me Once', one of the top streaming shows in the US.  

Netflix blew past analysts' expectations for the second straight quarter as ad-supported streaming plans helped bring in 9.3 million new customers, nearly double the consensus forecast of analysts.

Netflix revenue rose 14.8% to nearly $9.4bn (€8.8bn) during the period, the company said on Thursday night.

Operating income totaled $2.6bn, a year-over-year increase of 54%. Analysts had expected Netflix to gain roughly 5 million subscribers around the world during the quarter, after record gains at the end of 2023.The additions brought Netflix's total subscribers to 269.6 million at the end of March.

"We have built a hard to replicate combination of a strong slate, superior recommendations, broad reach and intense fandom, which drives healthy engagement on Netflix," the company said in a letter to shareholders.

As competitors such as Walt Disney are losing money from their streaming efforts, Netflix keeps gaining customers and building profit. In the shareholder letter, the company said it would work to improve the variety and quality of its entertainment and scale its advertising business to grow further. Netflix began offering ad-supported plans, which cost less than half of the options without commercials, in November 2022. 

In 2023, it started a crackdown on sharing of passwords, trying to convert people who use the accounts of friends or family into paying subscribers. The company said the version of its service with ads now accounts for 40% of all sign-ups in markets where it offers the plan.

To satisfy its large global audience, Netflix has been broadening its programming. The streaming service is expanding its sports offering with a $5bn, 10-year deal to stream WWE's wrestling show, Raw, starting in January 2025. Ahead of the results on Thursday might, analysts said that the bump from the password-sharing crackdown was expected to slow this year, turning the spotlight on its other efforts, including an ad-supported tier and a growing focus on sports. 

Netflix originals including Fool Me Once and Griselda were among the top US streaming programmes through January and February, with licensed content such as Grey's Anatomy also among the most streamed, according to data from Nielsen.

• Reuters