I’ve owned Netflix shares before, sold last Fall after strong gains and recently bought back in after the share price dipped.
What gives me confidence in Netflix’s future is one number above all others: subscriber growth.
Netflix increased its global subscriber base from 70.8 million in 2015 to 325 million in 2025. That is extraordinary growth for a business already operating at global scale.
More importantly, subscriber growth explains almost everything else investors care about.
The R-squared between Netflix’s year-end subscriber numbers and revenue over the last decade is 0.99. In other words, subscriber growth almost perfectly explains revenue growth.
The relationship with operating margin is almost as strong, with an R-squared of 0.98.
Over the last ten years, Netflix’s compound annual growth rate has been 16.5% for subscribers, 20.2% for revenue and 20.7% for operating margin.
Those numbers tell an important story.
As Netflix grows its customer base, revenue rises and profitability improves at the same time.
Of course, subscriber growth will eventually slow. Competition, pricing mistakes or weaker content investment could damage momentum. But for now, the company continues to demonstrate an exceptional ability to recruit new customers globally.
That is why I bought the shares again.
What impresses me most is Netflix’s ability to continually recruit new customers. It keeps finding ways to make the service easier, broader and more appealing to more people around the world.
“Cancel anytime” reduced perceived risk. The ad-supported tier opened the brand to more price-sensitive households. Live sport broadened appeal. Foreign-language content expanded international penetration. And its recommendation engine reduced the effort required for viewers to find something they value.
Around 80% of viewing is estimated to come via Netflix’s recommendation system, underlining how important discovery and personalisation have become to engagement.
Netflix is also teaching other businesses an important lesson. Growth mostly comes from increasing the number of buyers.
It is not just a content machine.
It is a customer acquisition machine with plenty of potential ahead of it.
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