Netflix to double profits after adding millions of subscribers in three months

Netflix expects to double its profits this quarter after the world’s largest streaming service added more than 5 million new subscribers this summer.

After cracking down on password sharing, introducing adverts to its service and investing billions in live TV, the group declared it had “delivered” on plans to shore up its business.

Hits including The Perfect Couple and Emily in Paris drew viewers to the platform in the last quarter. Netflix hopes a new season of Squid Game will bolster its audiences as the year draws to a close.

The company’s base of paying subscribers grew by 5.1 million to a record 282.7 million in the three months before 30 September. Revenue at Netflix rose 15% to $9.83bn, as net income increased 41% to $2.36bn.

As it attempts to shift investors’ attention away from audience growth, the company forecast net income of $1.85bn during the current quarter – up from $938m in the same period last year.

Shares in Netflix rose 4.5% during out-of-hours trading.

“We’ve delivered on our plan to reaccelerate our business,” it said in a letter to shareholders. “As we look ahead to 2025, we’re focused on improving every aspect of our service and continuing to deliver healthy revenue and profit growth.”

Netflix, based in Los Gatos, California, pioneered the streaming revolution. Hollywood’s established giants, from Disney to Warner Bros, are still scrambling to catch up – and turn a profit on their own rival digital services.

A boom in subscribers early in the pandemic, with much of the world stuck at home, stuttered in 2022 as restrictions were lifted and viewers ventured beyond their sofas. But shares in Netflix have since rallied sharply as the company reassured Wall Street it was taking action to regain momentum.

It has also invested heavily in live broadcasting, striking a decade-long deal with World Wrestling Entertainment (WWE) and acquiring the rights for two NFL games on Christmas Day.

The platform is preparing to stream a fight between the YouTube star Jake Paul and boxer Mike Tyson next month. Last week, the company also announced plans for a live weekly talkshow, hosted by comedian John Mulaney, to launch on its service next year.

“Netflix has managed to establish a virtually insurmountable lead in the streaming wars, and we expect competitors to lag behind while trying to replicate Netflix’s business model,” analysts at Wedbush told clients before Thursday’s earnings report. The company “has reached the right formula,” they added, with “global content creation, balancing costs and increasing profitability”.