Netflix Surges 11% After Strong Q3 Earnings Ad-Supported Growth Takes Center Stage

Netflix’s shares soared 11% in early trading on Friday following a robust earnings report for the third quarter. The streaming giant announced earnings per share of $5.40 for the period ending September 30, exceeding the $5.12 consensus estimate from LSEG analysts. Revenue also surpassed expectations, reaching $9.83 billion compared to the anticipated $9.77 billion.

A key driver behind Netflix’s impressive performance was the surge in its ad-supported membership tier, which experienced a remarkable 35% quarter-over-quarter growth. While Netflix does not anticipate this segment to be its primary growth engine until 2026, it reported that the ad-supported tier accounted for over 50% of new sign-ups in regions where it is available.

Looking ahead, Netflix provided a positive outlook for the fourth quarter, projecting a 14.7% revenue increase to $10.13 billion. For 2025, the company forecasts total revenue between $43 billion and $44 billion, indicating an expected growth rate of 11% to 13% from the estimated $38.9 billion revenue for 2024. Citi analysts highlighted that Netflix’s fourth-quarter outlook surpassed market expectations, while its 2025 forecast aligns with consensus estimates.

Richard Broughton, Executive Director of Ampere Analysis, noted that Netflix has successfully navigated a challenging media landscape by continuing to invest in content. “This sets it up extremely well over the next couple of years,” he said, referring to the content strategy that distinguishes Netflix from its competitors. Broughton predicts that Netflix will be responsible for nearly 10% of global scripted series next year, showcasing its strong position in the market.

As Netflix continues to expand its offerings and capitalize on the growing demand for its ad-supported tier, the company appears poised for sustained growth. With strategic investments in original content and a clear vision for the future, Netflix remains a dominant player in the streaming industry.