Netflix Stock Tumbles As Investors Aren’t Amused It Will Stop Reporting Subscriber Numbers

Netflix will stop reporting quarterly subscriber numbers in 2025, stating that it doesn’t view this data as important as other metrics the service tracks. This comes after the steaming behemoth stopped providing guidance on paid membership numbers in 2023, and it will also now stop reporting average revenue per member.

The market is…not amused. Netflix stock is down 6.1% at the time of this writing, and 9% for the week (though up 75% for the year). Netflix tried to explain the decision in its second quarter revenue forecast on Thursday, but the reasons have mitigated this decline:

“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 says.

The statement goes on to say that Netflix also has new business through advertising and adding extra members, so memberships are only “one component of our growth.” And with so many tiers, different subscribers have different impacts rather than uniform results.

The counter argument seems to be that Netflix is nearly tapped out in terms of the growth as previously reported, and the company does not want to be viewed as stagnant or losing market share in the future. Netflix’s password-sharing crackdown resulted in a big subscriber surge as many “freeloaders” were forced to get their own subs, but that’s a card you can only play once.

Current numbers do not reflect Netflix stalling right now, even if that could come in the future. The new report says that Netflix added 9.3 million subscribers in the first quarter, hitting 269.6 million subscribers around the globe, far and away beyond any of its streaming competitors. Disney Plus, for instance, has around 150 million subscribers.

We will see if the market adjusts to this idea in time. I am reminded of a situation in the video game industry when Microsoft simply stopped reporting hardware sales for Xbox, instead focusing purely on overall revenue and things like subscriptions to Xbox live. In that case, however, Xbox was clearly losing the hardware race to Nintendo and Sony and every quarter, it just looked like more bad news. Here, Netflix is the clear market leader, but it appears to be heading off future complaints about a lack of the numbers continuing to go up forever, and it wants to focus on other metrics it deems more “relevant” instead.

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