Netflix shares jumped 5% in premarket after beating third-quarter earnings

Netflix Shares jumped Friday after the media streaming giant reported third-quarter earnings and revenue that beat expectations.

Shares of Netflix rose 5.4% in US premarket trading as of 4:39 am ET.

Netflix reported earnings per share of $5.40 for the three months ended Sept. 30, beating the LSEG consensus estimate of $5.12. Revenue also beat expectations, coming in at $9.83 billion, above analysts' expectations of $9.77 billion.

Importantly, Netflix saw momentum in its ad-supported membership levels, which jumped 35% quarter-over-quarter. While Netflix doesn't expect ads to become its primary growth drive until 2026, it said the ad-layer accounted for more than 50% of sign-ups in the third quarter in countries where it's available.

Netflix also gave an upbeat outlook for the December quarter, saying it expects fourth-quarter revenue to grow 14.7% to $10,128. It is forecasting revenue of $43 billion to $44 billion for 2025, which means an increase of 11% to 13% from the $38.9 billion revenue expected in 2024.

Analysts at Citi said in a note after Netflix's earnings report that the firm's fourth-quarter outlook “beat the Street” while its 2025 forecast was “relatively in line with consensus estimates.”

“All told, we would expect to see shares trade higher” on the back of Friday's earnings, Citi analysts flagged.

Ampere Analysis Executive Director Richard Broughton told CNBC's “Squawk Box Europe” on Friday that Netflix has benefited from continued investment in content despite a bleak environment for the broader media landscape.

“It's a good indicator that some of the growth that was knocked out of the market is coming back in 2022. If you think about the last 24 months, we've had hiring, freezes, redundancies and cuts in content spending at some of the major studios. Streamers and, through that, Netflix continue to invest in content. Tried that sets it up very well over the next few years.

“If we think about scripted TV, drama, romance and science fiction, Netflix is ​​going to account for one in 10 global series next year. It's in a very different position than some of its competitors. Scale,” he added.