Netflix reported adding 8.76 million subscribers globally in the third quarter and said its was increasing prices for some subscribers in the U.S. and other countries.
Net income rose 20% to $1.7 billion, or $3.73 per share, compared to $1.4 billion, or $310 a year ago.
Revenue was up 8% to $8.5 billion.
The company forecast that revenue would rise to $8.7 billion in the fourth quarter, with net income of $956 million. And at a time when most of its rivals are still awash in red ink, Netflix boasted increasing profit margins.
Despite what the company labeled a tough period because of the writers and actors strikes, the subscriber gains exceeded Wall Street estimates and Netflix share were up 11% in after-hours trading.
Netflix now has 247.15 million subscribers globally. In the U.S., paid memberships rose to 77.32 million from 75.57 million in the second quarter and 73.39 million a year ago.
As expected the company announced rate increases.
“Starting today, we’re adjusting prices in the US, UK and France,” Netflix said in its shareholder letter. “In the U.S., our ads ($6.99) and our Standard plans ($15.49) will stay the same, while Basic will now be $11.99 and Premium $22.99..
The company said that its crackdown on password sharing contributed to its subscriber gains.
.“As our strong membership growth over the past two quarters and our Q4 2023 revenue growth forecast shows, we’ve now successfully taken action in every region in which we operate and we’re rolling it out as planned. The cancel reaction continues to be low, exceeding our expectations, and borrower households converting into full paying memberships are demonstrating healthy retention,” Netflix said. “As a result, we’re revenue positive in every region when accounting for additional spin off accounts and extra members, churn and changes to our plan mix.”
The company also said it was making progress with its ad business. The ad business has been growing slower than expected and Netflix replaced its top ad sales executive earlier this month.
“Adoption of our ads plan continues to grow — with ads plan membership up almost 70% quarter-over-quarter — and 30% of sign ups in our ads countries are, on average, to our ads plan, with more work to do to scale this business. Our $6.99 per month ads plan in the U.S. continues to support our ads plan growth,” the company said.
Netflix is also working to make its offering more sophisticated for advertisers.
It said it launched title sponsorships on with Frito Lay’s Smartfood presenting Love is Blind and T-Mobile, Nespresso among the presenting sponsors for The Netflix Cup, which the company calls its first live sports event. The Netflix Cup will feature drivers from its Formula 1: Drive to Survive series and golfers from Full Swing and stream live on November 14.
Next year the company said it will also have a binge-ad product that will give viewers an ad-free episode of a series, with a “brought to you by” message, after they’ve watched a few episodes.
