Netflix Half-Year Report 2024

Revenue grew 17% in Q2 (or 22% on a foreign exchange (F/X) neutral basis) , driven primarily by a 16% 2 year over year increase in average paid memberships. ARM was up 1% year over year or 5% on a F/X 3 neutral basis. Similar to recent quarters, the primary difference between F/X neutral and reported growth was large peso price increases in Argentina due to local inflation and the devaluation of the Argentine peso relative to the US dollar.

Global revenue was 1% higher than our beginning of quarter guidance due primarily to stronger-than-forecasted paid net additions of 8.0M vs. 5.9M in Q2’23.

Operating income for Q2 amounted to $2.6B, an increase of 42% vs. Q2’23. Operating margin of 27.2% improved five percentage points vs. 22.3% in the year ago quarter. Both were slightly above our guidance forecast due to higher than expected revenue. 

Highlights

• We had a strong Q2 with 17% revenue growth and an operating margin of 27% vs. 22% last year. We now expect full year 2024 reported revenue growth of 14% to 15% (up from 13% to 15%) and an operating margin of 26% (vs. 25% previously).
• We’re working to improve every aspect of Netflix so we can better serve existing and future members.
• In Q2 we had a wide variety of hit series like Bridgerton S3, Baby Reindeer, Queen of Tears and The Great Indian Kapil Show, and popular films like Under Paris, Atlas and Hit Man and The Roast of Tom Brady, which attracted our largest live audience yet.
• We began testing a new, simpler and more intuitive TV homepage in June, which we believe will significantly improve the discovery experience on Netflix.
• We’re making steady progress scaling our ads business. Ads tier membership grew 34% quarter on quarter, and we’re building an in-house ad tech platform that we’ll test in Canada in 2024 and launch more broadly in 2025.