At Morgan Stanley's Technology, Media & Telecom Conference on March 5, 2025, Netflix (NFLX -1.68%) Chief Financial Officer Spencer Neumann provided insights into the streaming giant's growth strategy and prospects. Following a period of reacceleration with nearly 20% revenue growth and 6 percentage points of margin expansion in 2024, the company continues to focus on improving its entertainment value while developing new revenue streams.

Strong Growth Despite Massive Scale

Netflix is demonstrating remarkable growth despite reaching significant scale, with momentum coming from several strategic initiatives, including paid sharing and advertising.

We're pleased with the progress. We did reaccelerate revenue growth, as we just talked about. We talked about on the last earnings call, our outlook for '25... And then we believe it's healthy and a long runway beyond that.

-- Spencer Neumann, CFO

This reacceleration comes after implementing two major tactical moves: addressing account sharing and building an advertising business. The company has successfully operationalized its paid sharing solution while growing its advertising tier, with approximately 55% of new sign-ups choosing the ad-supported option in the fourth quarter of 2024.

Multi-Pronged Growth Strategy

Netflix is leveraging multiple growth levers including member growth, pricing optimization, and advertising to drive long-term revenue and profit expansion.

We want to have 3 formidable ways in which we're growing into our revenue and profit pool between member growth, pricing plan evolution, and advertising. I think when you talk about 5 years, I think you should expect that we will be, for the foreseeable future, maybe forever, a primarily subscription business. But if ads can be a meaningful minority of our revenue, that's still a very important contributor to us.

-- Spencer Neumann

The company expects to double its advertising revenue in 2025 after doubling it in 2024. While still a small portion of overall revenue, Netflix is building foundational capabilities including a first-party ad tech stack launching broadly in 2025, starting with the U.S. in April. This advertising business taps into an estimated $180 billion addressable market in the countries where Netflix operates.

Significant Long-Term Market Opportunity

Despite its impressive scale with over 300 million paying members, Netflix believes it has substantial room for growth across multiple dimensions.

Even though we're pretty big today at over 300 million paying members around the world, an audience, when you multiply that by the number of people viewing in any given household, we're entertaining an audience of over 700 million around the world. So it's pretty big scale, but we're still small on kind of every key measure for us in terms of addressable market. So we're in about 40% roughly of the connected-TV households around the world. ... We're capturing about 6% of our addressable revenue market, and we're less than 10% TV view share, again, in every major country in which we operate.

-- Spencer Neumann

This substantial runway for growth includes expansion opportunities across household penetration, revenue per customer, and increasing viewership share. The company's strategic investments in content, including non-English language programming produced in over 50 countries, help drive this growth while differentiating Netflix from competitors.

Looking Ahead

Netflix management expressed confidence in the company's growth trajectory, with Neumann reiterating the belief that the business is "still just getting started" despite its significant scale. With key competitive advantages -- including a global content production studio creating entertainment in over 50 countries and improving monetization capabilities -- Netflix appears well positioned for continued expansion.

The company is particularly focused on scaling its advertising business, enhancing its live event offerings (not regular sports seasons, but "eventized" moments like the NFL on Christmas Day), expanding gaming capabilities, and leveraging artificial intelligence across the business. As Neumann emphasized, "The worst thing that can happen is if we don't innovate fast enough."