Netflix will stop reporting quarterly subscriber numbers starting with its first quarter 2025 earnings, as the company says it’s more focused on other metrics.
Additionally, the streaming giant said Thursday that it would stop reporting average revenue per member, which it refers to as ARM. The company had already stopped providing guidance on paid membership numbers starting in 2023.
In the company’s earnings report, Netflix said the decision came amid rising profit numbers.
“As we’ve noted in previous letters, we’re focused on revenue and operating margin as our primary financial metrics — and engagement (i.e. time spent) as our best proxy for customer satisfaction. In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF),” the earnings release reads.
“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential. But now we’re generating very substantial profit and free cash flow (FCF). We are also developing new revenue streams like advertising and our extra member feature, so memberships are just one component of our growth. In addition, as we’ve evolved our pricing and plans from a single to multiple tiers with different price points depending on the country, each incremental paid membership has a very different business impact.”
The company will continue to release breakouts of revenue by region each quarter as well as the F/X. Additionally, Netflix will also start to provide annual revenue guidance.
“We’ll also announce major subscriber milestones as we cross them,” the company said.
The announcement arrives amid growing subscriber numbers and profits at Netflix. In the first quarter, the company added 9.3 million subscribers, to reach 269.6 million global subscribers, expanding its already large lead over the competitors. Netflix reported revenue of $9.4 billion and operating income of $2.6 billion, both up substantially from a year earlier.
Netflix already has a lead over its competitors in terms of subscribers, with competitor Disney+ reporting a base of close to 150 million. The company’s numbers have also been increasing amid its crackdown on password sharing, in which borrowers can be converted to new users.
However, moving away from the subscriber metric is also significant, as it had been a focus area for Wall Street early in the streaming wars, and can remain so, particularly when profits are not yet in sight.
