Netflix third-quarter subscribers barely beat estimates as ad-tier members jump 35%

LOS ANGELES — Netflix posted third-quarter earnings Thursday that beat on the top and bottom lines as its advertising business continued to grow.

The streamer’s ad-tier memberships jumped 35% quarter over quarter. The company is on track to launch the service in Canada in the coming quarter and more broadly in 2025.

While Netflix does not expect advertising to become a primary growth driver until 2026, it noted that the ad-tier accounted for more than 50% of sign-ups during the third-quarter in countries where it is available.

Shares rose nearly 4% in aftermarket trading.

Here’s what Netflix reported for the period that ended Sept. 30:

• Earnings per share: $5.40 vs. $5.12 expected by LSEG
• Revenue: $9.83 billion vs. $9.77 billion expected by LSEG
• Paid memberships: 282.7 million vs. 282.15 million expected, according to StreetAccount

Net income for the period was $2.36 billion, or $5.40 per share, up from $1.68 billion, or $3.73 per share, during the same quarter a year earlier. Revenue jumped 15% to $9.83 billion from $8.54 billion a year earlier.

The company noted Thursday that it expects revenue in the fourth quarter to reach $10.13 billion and earnings per share to be $4.23.

Netflix is projecting revenue for the full year of 2025 to be between $43 billion and $44 billion as it improves its core series and films offerings and invests in new initiatives such as ads and gaming. Much of that revenue growth is expected to come from what the company called a “healthy increase in paid memberships.”

Netflix added 5.1 million subscribers during the quarter, more than the 4.5 million Wall Street expected, according to StreetAccount estimates. In total, the streaming service now has 282.7 million memberships across all of its pricing tiers.

Starting in 2025, Netflix will no longer update investors on its subscriber numbers as it shifts focus toward revenue and other financial metrics as performance indicators.

The company touted new shows such as “The Perfect Couple,” “Nobody Wants This” and “Tokyo Swindlers” alongside returning seasons of “Emily in Paris” and “Cobra Kai” as well as big movies such as “Beverly Hills Cops: Axel F,” “Rebel Ridge” and “Officer Black Belt” as breakout viewership hits.

Netflix is set to release a second season of the hit show “Squid Game” in the fourth quarter alongside live sports events such as a boxing match between Jake Paul and Mike Tyson as well as two National Football League games Christmas Day.

Correction: This story has been updated to correct reported and estimated revenue for Netflix’s third quarter. The company reported $9.83 billion compared with $9.77 billion expected, according to LSEG.

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