Shares of Netflix (NASDAQ: NFLX) rose to new all-time highs on Friday, buoyed by a strong earnings report. Shares of the media streaming pioneer had gained 10.7% as of 11:10 a.m. ET, a gain of 120% in 52 weeks.

Sales and earnings exceeded expectations

Netflix’s third-quarter revenue rose 15% year-over-year to $9.83 billion. That’s slightly ahead of the 14.4% increase in global memberships over the same period, including a net gain of 5.1 million accounts in the third quarter. Earnings stopped at $5.40 per diluted share, up 45% year over year.

An average analyst would have been happy with earnings of about $5.16 per share on revenue of about $9.78 billion. Netflix also exceeded management’s forecasts for all six financial targets outlined in its second-quarter report, and its forecast numbers for the next quarter were above current Street expectations.

The path ahead seems clear

The company achieved these analyst-surprising results despite some macroeconomic headwinds. Revenue increased 21% year over year in constant currency, and average revenue per member (ARM) increased 5% after the same currency adjustment.

The first half of 2024 was impacted by last year’s writer and actor strikes, delaying many film and series premieres until the second half of the year or 2025. Netflix is ​​still dealing with these schedule adjustments, but there are plenty of delayed premieres coming up in the fourth quarter.

Netflix achieves its stated goals and optimizes its business plan for revenue growth and expanded operating margins. These trends are expected to continue in the fourth quarter and beyond as Netflix benefits from a more robust macroeconomic environment and continued savings trends.

Netflix shares are trading at record highs today, and for all the right reasons.

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Anders Bylund holds positions at Netflix. The Motley Fool has positions in and recommends Netflix. The Motley Fool has a disclosure policy.

Netflix shares hit record highs after beating earnings expectations. Originally published by The Motley Fool