The numbers

5 million — The number of subscribers Netflix added in Q3, beating Wall Street’s expectations.

282.7 million — Netflix’s total global subscribers.

$9.83 billion — The streaming giant’s Q3 revenue, up 15% year-over-year. The company’s operating margin was 30% compared with 22% from last year.

150% — The increase in ad sales commitments Netflix saw in this year’s Upfront.

The watercooler talk

Netflix has two top priorities when it comes to its ads business.

The first is to grow its ad tier membership to scale enough to be relevant to advertisers in each of its markets. Netflix, during the call, indicated its made solid progress on this. Ads plan accounted for over 50% of signups in countries where the ads tier was available. Netflix’s ads plan membership base was up 35% quarter-over-quarter.

The second priority is to build better ad products so it can present a more attractive offering to advertisers. While Netflix noted that it still has a lot of work to do to achieve that goal, it’s making headway. It will launch its own ad server in Canada this quarter, followed by the rest of its ad markets in 2025. Netflix also teased upcoming partnerships with The Trade Desk and Google.

Starting in 2025, Netflix will no longer share its subscriber numbers with investors and will instead focus on revenue and other financial metrics to highlight performance.

The key quote

“While ads won’t be a primary driver of revenue in 2025 because we’re still scaling that audience and that inventory faster than our ability to monetize it, we definitely see already the momentum growth in the monetization and our opportunity to close that gap,” said Netflix CFO Spence Neumann during the earnings call.

“Ads against premium video — it’s a proven model,” Neumann added.