Every Netflix Investor Should Keep an Eye on This Number

Core Insights - Netflix is shifting its focus from subscriber growth to free cash flow as the primary metric for measuring success [1][2][5] - The company will no longer report membership counts or average revenue per member starting in the first-quarter 2025 report [2] - The new key performance indicators include revenue growth, operating margin, and free cash flow [2][4] Financial Performance - Free cash flow increased significantly in 2022 and 2023 but remained stable in 2024, with a full-year figure of $6.9 billion [3] - Despite a 13% year-over-year decline in free cash flow during the holiday quarter of 2024, Netflix shares rose 13% following management's guidance for 2025 [3][4] - The company anticipates a 13% revenue growth and a 2 percentage point increase in operating margin for 2025, along with a projected 16% increase in free cash flow [4]