Netflix says it will no longer share details of subscriber numbers

In a letter to shareholders, Netflix says that it is to stop reporting quarterly membership numbers. The company will, mostly, keep details about subscriber numbers to itself from Q1 2025, it announced.

Although Netflix will instead start to report the amount of time users spend on its platform as well as information about revenue growth, the company says that it will still share "major subscriber milestones as we cross them". In its shareholder letter, Netflix also boasts that it is generating very substantial profit and free cash flow.

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The change comes, Netflix says, for various reasons. One of them is that the company has new revenue streams such as money generated from advertising as well as the "extra member" feature that came out of its password-sharing crackdown. This, the company points out, means that "memberships are just one component of our growth".

The letter says:

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). 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. It's why we stopped providing quarterly paid membership guidance in 2023 and, starting next year with our Q1'25 earnings, we will stop reporting quarterly membership numbers and ARM.

Netflix also says that it will continue to provide a breakout of revenue by region each quarter and the F/X impact. It will also add annual revenue guidance on top of what it already provides.

Offering further justification for the changes, Netflix says:

Success in streaming starts with engagement. When people watch more, they stick around longer (retention), recommend Netflix more often (acquisition) and place a higher value on our service. It's why we've been providing progressively more information on engagement, starting with our Top 10 weekly and most popular lists and more recently our bi-annual report into viewing on Netflix (which covers ~99% of all video watch time on our service). This is more information than any of our competitors provide, and we expect to provide even more over time.

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