(MENAFN) Netflix has announced a significant change in its financial reporting strategy, stating that it will discontinue the disclosure of membership numbers and average revenue per user starting from the first quarter of the upcoming financial year. This decision comes after the streaming giant revealed that it surpassed analysts' expectations by adding more than 9.3 million new subscribers in the first quarter of 2024.
Traditionally, membership numbers and average revenue per user have been pivotal metrics for investors to assess Netflix's financial performance. However, the company now considers these metrics as just one part of its growth narrative. Instead, Netflix intends to prioritize revenue and operating margin as its primary financial indicators, while using engagement as a key measure of customer satisfaction.
Nevertheless, Netflix has assured that it will continue to announce major subscriber milestones as they occur. In the last quarter, total paid memberships experienced a significant uptick of nearly 16 percent, reaching 269.6 million, surpassing Wall Street's projections. Additionally, Netflix reported a substantial increase in net profit, which soared by 79.2 percent year-over-year to USD2.33 billion. Earnings per share stood at USD5.28, while revenue surged by almost 15 percent to USD9.37 billion, exceeding analysts' estimates of USD9.28 billion.
Despite these impressive financial results, Netflix's second-quarter revenue and earnings per share forecast fell short of expectations, leading to a decline in its share price on Thursday. This development underscores the ongoing volatility and scrutiny surrounding the streaming giant's performance in the competitive entertainment landscape.
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