Netflix's Profitability Skyrocketed by 577% in Five Years

Thanks to its massive user base, Netflix has grossed almost $200 billion in the past ten years, and the number of people paying for its services continues to rise. After reporting nearly 30 million new subscribers in 2023, the streaming titan added 9.3 million new users in the year’s first quarter, pushing their total number to 269.6 million, or 80% more than five years ago. The company’s profitability also skyrocketed in this period. According to data presented by Stocklytics.com, Netflix’s profitability has soared by an impressive 577% in the past five years.

Quarterly Net Income Jumped from $344 Million to $2.3 Billion

Netflix‘s strong slate of original programming and continued password-sharing crackdown helped It enjoy its strongest start to a year since 2020. After delivering strong results in 2023, the company added 9.3 million subscribers in Q1, the second-highest figure in three years, and beat analysts’ expectations reporting better-than-expected revenue and net income.

Wall Street forecasted Netflix’s revenue of $8.73 billion in Q1, but the company reported a whopping $9.49 billion, 15% more than in the same period a year ago. Operating income, which measures a company’s profit from its core business functions, jumped by 54% year-over-year and hit $2.6 billion in the first three months.

Netflix’s net income, or profitability after all expenses have been deducted from revenues, also skyrocketed, showing the company’s enhanced efficiency and successful cost management strategies paid off.  Statistics show Netflix’s net income hit $2.3 billion in Q1 2024, the highest amount in the company’s history.

This figure is even more impressive when compared to figures reported in previous years. Five years ago, in Q1 2019, Netflix reported a net income of $344 million, or 577% less than in the three months of this year. A year later, this figure more than doubled to $709 million. In Q1 2021, the company reported a net income of over one billion dollars for the first time, or $1.7 billion, to be more precise. After a slight drop to $1.59 billion in Q1 2022 and $1.3 billion in Q1 2023, Netflix’s net income jumped by 79% year-over-year and hit an all-time high in Q1 2024.

Netflix’s Five-Year Stock Price Growth is 12x Smaller

Despite the good results in the three months of the year, Netflix’s share price dropped 8% since the earnings report release. One of the reasons behind this drop is slightly lower-than-expected guidance for second-quarter revenue. Also, the company unexpectedly announced that it would stop reporting quarterly membership figures next year, which didn’t go down well with investors.

Statistics show the company’s five-year stock price growth is far below its net income or revenue growth. To be more specific, Netflix’s stock price increased by 45% in the past five years or 12 times less than its net income.

In April 2019, Netflix stocks were traded at $385, while its market cap amounted to roughly $165 billion. Since then, Netflix’s share price has increased to $561 as of last week, helping the company to add $78 billion to its stock value.