Netflix (US:NFLX) and Spotify (US:SPOT) are on similar paths. Both spent big on content during the pandemic to grow quickly, then lost the gains their share prices made as interest rates rose and the market questioned their ability to increase profits. Yet their recent earnings showed resilience by proving they could keep growing their subscriber bases while bringing costs under control.
In the three months to September, Netflix managed to add 9mn subscribers compared with the previous quarter. Its 247mn subscriber figure is up 11 per cent year on year and 3.6 per cent quarter on quarter. Impressively, it achieved this growth despite cutting its marketing budget by 11 per cent year on year and expanding its operating margin by 3.1 percentage points to 22.4 per cent.
