Netflix has announced that it will stop reporting subscriber numbers, which has been a key metric for streaming services for years, starting from the first quarter of 2025. The company made this announcement while releasing its first-quarter 2024 earnings. Netflix stated that engagement, or time spent with the service, is its best proxy for customer satisfaction. As such, it will no longer report quarterly membership numbers or average revenue per member (ARM).
The company explained that in its early days when it had little revenue or profit, membership growth was a strong indicator of its future potential. But now, as it’s generating substantial profit and free cash flow (FCF), and developing new revenue streams like advertising and extra member features, memberships are just one component of its growth. As a result, starting with its Q1 2025 earnings, Netflix will stop reporting quarterly membership numbers and ARM.
Netflix will continue to provide a breakout of revenue by region each quarter and the foreign exchange (F/X) impact to complement its financials. For guidance, it will add annual revenue guidance on top of what it already provides today: its annual operating margin and free cash flow forecast and forecasts for quarterly revenue, operating income, net income, and earnings per share (EPS). The company will also announce major subscriber milestones as they occur.
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