Netflix (NFLX) Q2 2024 earnings summary

Executive summary

• Achieved 17% year-over-year revenue growth in Q2 2024 to $9.56 billion, with strong member and profit growth driven by content performance, healthy retention, and paid sharing and ads plan entry points.

• Net income for Q2 2024 was $2.15 billion, up 44% from Q2 2023, with diluted EPS of $4.88.

• Global paid memberships reached 277.6 million, a 16% increase year-over-year, with net additions of 8 million in the quarter.

• India ranked as a top market for paid net adds and revenue growth, attributed to successful local content and ongoing market build.

• Engagement remains healthy, with owner household engagement up year-over-year despite competitive intensity and paid sharing headwinds.

Financial highlights

• Q2 2024 revenue: $9.56 billion (+17% year-over-year); net income: $2.15 billion (+44% year-over-year); operating income: $2.60 billion (+42% year-over-year).

• Operating margin improved to 27% in Q2 2024 from 22% in Q2 2023, with a five percentage point increase year-over-year.

• Diluted EPS: $4.88 (Q2 2024) vs. $3.29 (Q2 2023).

• Free cash flow guidance maintained at approximately $6 billion for the year; free cash flow for the quarter was $1.29 billion.

• Expenses up 7% year-to-date, with total annual expenses projected north of $28 billion.

Outlook and guidance

• Full-year operating income margin guidance raised to 26%, up from 25% previously.

• Committed to growing margins annually, with margin expansion subject to FX and business factors.

• Ads business expected to become a primary revenue driver post-2025, with ongoing investments in ad tech and sales capabilities.

• Content spend to grow with revenue, but at a slower pace, maintaining discipline while expanding global content.

• Management expects continued investment in global and original content, with sufficient cash flows and financing sources to meet needs for the next twelve months and beyond.