Thanks to a strong slate of original programming, a popular new ad-supported tier and its continued crackdown on password sharing, Netflix is enjoying the strongest year since 2020 in terms of subscriber growth, as the video streaming giant added 22.4 million subscribers in the first nine months of the year, blowing past last year's result of 16.4 million new subscribers between January and September. Following up on an extremely strong first half of the year, Netflix added 5.1 million subscribers in the September quarter, beating expectations of 4.5 million new paying customers.
Revenue grew 15 percent year-over-year in the third quarter, driven primarily by membership growth. Looking ahead, Netflix expects continued double-digit revenue growth, as the company plans to further grow its subscriber base, increase average revenue per member and build its still nascent advertising business. "We still have hundreds of millions of households that aren't members, and we'll grow into that opportunity, thanks to a great '25 slate and our improvements in converting consumer demand. And we will have our growth. ARM's a combination of continued plan evolution and pricing, building off the actions we've been taking this year and growing our ads revenue, not yet a primary growth driver but to be a more meaningful contributor in '25," CFO Spencer Adam Neumann said in a call with investors.
Speaking of advertising, Netflix’s ad-supported tier, introduced in select markets in late 2022, is proving very popular with customers. In the past three months, ads memberships grew 35 percent compared to the previous quarter, as more than half of new signups in eligible markets chose the ad-supported tier. "We’re on track to reach what we believe to be critical ad subscriber scale for advertisers in all of our ads countries in 2025, creating a strong base from which we can further increase our ad membership in 2026 and beyond," the company wrote in a letter to shareholders.
