Streaming giant Netflix has announced its decision to discontinue the disclosure of key membership metrics, including quarterly membership numbers and average revenue per user (ARM), starting from the first quarter of the upcoming year. This shift comes as the streaming giant reported impressive first-quarter earnings, surpassing both revenue and earnings per share (EPS) expectations.

The company, for the first quarter of the year, exceeded analyst expectations on both subscriber growth and revenue, adding a whopping 9.3 million subscribers and reaching a global total of 269.6 million. Financially, the picture was equally bright, with revenue hitting $9.37 billion, a 15% year-over-year increase, and earnings per share (EPS) exceeding expectations at $5.28. For the same period, its operating income rose to $2.63 billion, while its operating margin climbed to 28.1%. Similarly, its net income clocked an annual growth to reach $2.3 billion for Q1 2024.

“In our early days, when we had little revenue or profit, membership growth was a strong indicator of our future potential,” Netflix announced in a letter to its shareholders, adding that as of now, its subscriber base has evolved to become “just one component of our growth. “We have built a hard to replicate combination of a strong slate, superior recommendations, broad reach and intense fandom, which drives healthy engagement on Netflix. Improvement in these key areas is the best way to delight our members and continue to grow our business,” the streaming giant commented, adding, “…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.”

While subscriber numbers will no longer be a regular fixture in Netflix’s quarterly reports, the company will still provide occasional updates on significant subscriber milestones. It will also continue to offer regional revenue breakdowns and foreign exchange impact data. Additionally, Netflix is expanding its financial guidance to include annual revenue forecasts alongside its existing forecasts for operating margin, free cash flow, and quarterly financials.

Recent times saw Netflix implement a crackdown on password sharing in the US last year, delaying a plan initially announced in their Q1 2023 earnings report. This crackdown involved new verification methods to identify legitimate users within a household and offered options for primary account holders to add additional members for an extra fee. The password-sharing crackdown seems to have yielded significant results. Netflix exceeded analyst expectations by a significant margin, adding a whopping 9.33 million subscribers in Q1 2024. This represents a substantial increase compared to the 1.7 million new subscribers acquired in Q1 2023. The subscriber growth also translated to a healthy financial performance. Revenue climbed to $9.37 billion, a 15% increase year-over-year, as mentioned earlier.

Netflix provided a positive outlook for the second quarter, forecasting revenue growth of 16%. However, the company anticipates lower paid net additions in the second quarter due to seasonal trends. It forecasts revenue of $9.4 billion for the current quarter as well. Still, while its earnings performance exceeded expectations, its decision to alter its reporting strategy triggered a mixed investor response, leading to a 4.5% decline in the company’s stock price during after-hours trading. Netflix is currently trading at $555.04 per share.