#NetflixStock #EarningsSurge #AdGrowth
Netflix Shares Soar After Impressive Third-Quarter Earnings
Netflix’s stock surged by 11% on Friday, driven by the company’s stellar third-quarter earnings report, which exceeded Wall Street's expectations on both revenue and profit.
Earnings and Revenue
Netflix reported earnings per share of $5.40 for the quarter ending September 30, surpassing the consensus estimate of $5.12. The company's revenue also outperformed expectations, reaching $9.83 billion compared to the anticipated $9.77 billion.
Advertising Growth
A significant factor in Netflix's success was the robust growth in its ad-supported membership tier. The company saw a 35% increase in ad-tier memberships from the previous quarter, with the ad-supported layer accounting for more than 50% of new registrations in countries where it is available. Although Netflix does not expect advertising to be its primary growth driver until 2026, the current momentum is promising.
Market Reaction
The positive earnings report sent Netflix shares jumping in premarket trading, reflecting investor confidence in the company's strategy. This surge contributed to the broader market gains, with the Nasdaq Composite ending the day up 0.63% and the S&P 500 and Dow Jones Industrial Average also reaching new record highs.
Broader Market Context
The strong performance of Netflix is part of a larger trend where over 70 S&P 500 companies have reported earnings this season, with 75% of them beating expectations. This robust earnings season has fueled optimism among investors, despite the approaching election, which typically introduces market volatility.
Investor Outlook
Analysts are optimistic about Netflix's future, particularly given the company's ability to adapt and innovate. The growth in ad-supported memberships and the overall financial performance suggest that Netflix is well-positioned to continue its upward trajectory.
Original Article: https://www.cnbc.com/2024/10/18/netflix-shares-jump-5percent-in-premarket-after-third-quarter-earnings-beat.html
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