The bar was high for Netflix headed into Q1 results this week. The stock was up ~30% in 2024.

As many readers will surely recall, last quarter’s results were remarkable. Specifically, the company had its best quarter for paid net adds since the surge that accompanied the onset of the pandemic. It was also the best Q4 on record for new paying subscribers.

Fast forward three months and Netflix delivered again. Paid net adds were 9.33 million, almost double consensus.

That’s impressive. Whether it’s enough to justify the rally (which is to say whether this ends up being a “sell the news” event) is another matter entirely.

Revenue beat, but not by much. The Street was looking for $9.27 billion. The actual top-line print was $9.37 billion. EPS of $5.28 was a solid beat. Operating margin, at 28.1%, was nearly 250bps better than expected.

Investors remain focused on the company’s (successful) password crackdown and also on Netflix’s fledgling ad business. The latter (ad-supported memberships) grew 65% sequentially. That’s a deceleration from the prior two quarters’ 70% pace, but the ad tier’s share of all signups in ads markets, 40%, was unchanged.

The guide was pretty much in line. Netflix projected revenue growth of 16%, which would put the top-line right at consensus. Paid net adds are seen lower sequentially on “typical seasonality.”

“We’re off to a good start in 2024,” the company said, in the characteristically colloquial shareholder letter which doubles as a press release. “We have built a hard to replicate” model.

The company, which stopped providing paid net adds guidance last year, said it’ll stop reporting the figure altogether as of Q1 2025’s report. That may not sit well with some investors.