Netflix is having a blockbuster year.

Its stock has nearly doubled YoY and is trading near its pandemic heights.

The company's pivot to embrace ads and crackdown on password sharing is paying off big-time. Neither move ended up spooking subscribers as the streaming giant once feared -- quite the opposite, in fact. Its lower-price ad tier offering and tighter account sharing controls are ushering in a trove of new subscribers. 

You can see on the chart below the massive uptick in subscriber growth logged earlier this year as its ad-tier pricing took hold.

You can also see that Netflix's subscription growth rate is majorly slipping off, trending ~12% lower last month. 

Trouble in Netflix paradise? Not necessarily. In fact, Netflix likely saw the writing on the wall. 

Last quarter Netflix’s global paid memberships rose 16.5% year-over-year to just over 277 million, but it was one of the last membership number updates investors can expect as the company shifts its reporting strategy. 

By focusing on revenue, operating margin, and engagement (i.e. time spent streaming) starting in 2025, Netflix may be signaling that it anticipates slower subscription growth ahead. We certainly think so. 

Here are 2 major reasons we aren't worried about a subscriber slow-down...

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