Netflix(NFLX) - 2024 Q3 - Quarterly Results

Revenue and Financial Performance - Q3 2024 revenue grew 15% year-over-year to $9.825 billion, with an operating margin of 30%, up from 22% in Q3 2023[1][2] - Q3 2024 operating income increased 52% year-over-year to$ 2.9 billion, driven by higher revenue and timing of spending[4] - For Q4 2024, the company forecasts revenue of $10.128 billion, representing 15% year-over-year growth, and an operating margin of 22%[2][5] - Full-year 2024 revenue growth is expected to be 15%, at the high end of the 14%-15% range, with an operating margin of 27%, up from 26% previously[6] - For 2025, the company forecasts revenue of$ 43 billion to $44 billion, representing 11%-13% growth, and targets an operating margin of 28%[7] - Revenue for Q3 2024 reached$ 9.82 billion, a 15% increase compared to $8.54 billion in Q3 2023[31] - Operating income for Q3 2024 was$ 2.91 billion, up 52% from $1.92 billion in Q3 2023[31] - Net income for Q3 2024 stood at$ 2.36 billion, a 41% increase from $1.68 billion in Q3 2023[31] - Diluted earnings per share (EPS) for Q3 2024 were$ 5.40, compared to $3.73 in Q3 2023[31] - Total revenues for the quarter ended September 30, 2024, were$ 9,824,703, with a constant currency adjustment of $524,153, resulting in a 21% constant currency revenue growth[36] - Netflix's net income for the three months ended September 30, 2024, was$ 2,363,509, compared to $1,677,422 for the same period in 2023, representing a 41% increase[34] Streaming and Membership Growth - Global streaming paid memberships reached 282.72 million in Q3 2024, a 14.4% year-over-year increase[2] - Engagement remains healthy, with view hours per member among owner households increasing year-over-year in the first three quarters of 2024[1][9] - Netflix's advertising plan accounted for over 50% of sign-ups in ads countries in Q3, with membership growing 35% quarter over quarter[15] Content Performance and Investments - Couple* starring Nicole Kidman and Liev Schreiber achieved 65.2M views, while Monsters: The Lyle and Erik Menendez Story* by Ryan Murphy garnered 54.6M views[12] - The Menendez Brothers* documentary in October received 24.2M views, and Nobody Wants This* with Kristen Bell and Adam Brody achieved 37.0M views[12] - Simone Biles: Rising* garnered 19.0M views, The Accident* from Mexico achieved 37.2M views, and Desperate Lies from Brazil received 19.5M views[12] - Breathless* from Spain achieved 17.3M views, Tokyo Swindlers* from Japan garnered 10.5M views, and Culinary Class Wars* from Korea received 11.0M views[12] - The company plans to invest in new growth initiatives like ads and gaming while improving core series and film offerings for 2025[6][7] - Total streaming content obligations as of September 30, 2024, were$ 22.70 billion, up from $21.71 billion at the end of 2023[33] - Netflix's additions to content assets for the three months ended September 30, 2024, were$ 4,016,396, compared to $2,883,839 for the same period in 2023, a 39% increase[34] Advertising and Ad Tech - Ads membership grew 35% quarter-on-quarter, with the ad tech platform set to launch in Canada in Q4 2024 and more broadly in 2025[1] - Netflix's in-house first-party ad tech platform is on track to roll out in Canada next month, with a broader launch to all ads countries in 2025[16] Regional Performance - APAC revenue grew 19% year-over-year, leading all regions, driven by strong local content in Japan, Korea, Thailand, and India[3] Pricing and Plan Changes - Netflix increased prices in EMEA countries and Japan, and will increase prices in Spain and Italy starting tomorrow[12] - Netflix phased out the Basic plan in the US and France in Q3 and will do the same in Brazil later in Q4[12] Cash Flow and Financial Position - Netflix's Q3 operating cash flow was$ 2.3B, and free cash flow (FCF) totaled $2.2B, with full-year 2024 FCF expected to be$ 6.0B- $6.5B[18] - Free cash flow is highlighted as a key liquidity metric, though specific figures are not provided[27] - Netflix's non-GAAP free cash flow for the three months ended September 30, 2024, was$ 2,194,238, compared to $1,888,386 for the same period in 2023, reflecting a 16% increase[34] - Netflix's net cash provided by operating activities for the three months ended September 30, 2024, was$ 2,321,101, compared to $1,992,315 for the same period in 2023, a 17% increase[34] - Netflix's purchases of property and equipment for the three months ended September 30, 2024, were$ 126,863, compared to $103,929 for the same period in 2023, a 22% increase[34] Share Repurchases and Debt - Netflix repurchased 2.6M shares for$ 1.7B in Q3, with $3.1B remaining under the existing authorization[18] - Netflix's net debt as of September 30, 2024, was$ 6,831,370, a decrease from $7,382,192 as of June 30, 2024[37] - The company's total debt as of September 30, 2024, was$ 15,981,328, an increase from $13,980,065 as of June 30, 2024[37] Assets and Investments - Cash and cash equivalents increased to$ 7.46 billion as of September 30, 2024, from $7.12 billion at the end of 2023[33] - Short-term investments surged to$ 1.77 billion as of September 30, 2024, from $20.97 million at the end of 2023[33] - Total assets grew to$ 52.28 billion as of September 30, 2024, from $48.73 billion at the end of 2023[33] - The company's cash, cash equivalents, and restricted cash at the end of the period on September 30, 2024, were$ 7,459,085, compared to $7,356,836 for the same period in 2023[34] Forward-Looking Statements - The company emphasizes forward-looking statements regarding growth in streaming entertainment, ad-supported tier prospects, and content slate strength[28] Stock-Based Compensation - The company's stock-based compensation expense for the three months ended September 30, 2024, was$ 65,650, compared to $79,720 for the same period in 2023, a 18% decrease[34]