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Netflix delivered another strong set of results during the third quarter. The fourth quarter, however, will present the biggest test to date for not only its sports ambitions but also its overall live-events business.
The company reported third-quarter financial results Thursday that included a 1.8% increase in subscribers to 282.7 million, a 15% lift in revenue to $9.8 billion, and a 41% boost in net income to $2.4 billion. Each of those figures beat Wall Street expectations. The subscriber total, though it will not be a part of future Netflix earnings reports beginning with 2025’s first quarter, remains by far the largest in the streaming industry.
The results, following up on a similarly bullish report in July for the second quarter, were yet another strong show of Netflix’s market dominance, and investors responded as such, elevating the company’s stock by 5% in after-hours trading. But to close out the year, Netflix will begin its new three-year deal for Christmas Day NFL games, and also show the rescheduled Mike Tyson–Jake Paul fight Nov. 15. Those events additionally serve as forerunners to a 10-year agreement for live rights to WWE’s Raw beginning in January.
This year’s Christmas Day NFL games include a matchup between the Chiefs and Steelers, followed by one with the Ravens and Texans. All four teams reached last season’s playoffs, and are currently in line to do so again this year.
Those games are part of a broader notion that Netflix executives sought to convey to analysts Thursday that not all streaming hours are created equal—and live ones are typically more valuable across many parts of the business, including with both subscription and advertising revenue.
“We have about 200 billion hours [of content] every year on Netflix. Very few of them are actually live,” said Ted Sarandos, company co-CEO. “But they all promise to be extremely high value, particularly the excitement of the Tyson-Paul fight, which is growing every day, and certainly Christmas Day NFL football is going to be a blast all day on Netflix. We’re really excited that we’re going to be capturing even more of the excitement that comes when the whole world gets together to watch something.”
Beyond the stock bump late Thursday, Netflix shares have soared by 47% this year, and that tear has included the establishment of several all-time highs.
More Good Times Coming
Further buoyed by the bullish third-quarter performance, Netflix also said in its guidance that 2024 full-year revenue will come in at the high end of a prior target of 14% to 15% growth. Within that, the company expects that ad sales will quickly become a more impactful part of the overall business, with ad-tier membership growing by 35% quarter over quarter. Even before this latest report, Netflix disclosed in August that it generated a 150% rise in upfront ad sales compared to last year.
Live events—and specifically live sports—are a fundamental component of that increased lean into advertising as a means to diversify Netflix’s revenue.
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