Agencies
Netflix’s subscriber and earnings growth accelerated in its latest quarter as the video streaming service benefits from a crackdown on freeloading viewers, an expansion into advertising and an acclaimed programming lineup.
The results announced Thursday painted a portrait of a company still gathering momentum after a jarring decrease in subscribers during the first half of 2022 prompted a change in direction.
Netflix added 8 million subscribers during the April-June period, marking a 37% increase over the same time last year. It was the sixth-consecutive quarter of that Netflix’s subscriber gains have increased from the previous year, a trend triggered by the 2022 downturn that served as a wake-up call for the Los Gatos, California, company.
And Netflix is still financially thriving. The company’s profit in its latest quarter rose 44% from last year to $2.15 billion, or $4.88 per share — a figure that exceeded the estimates of analysts polled by FactSet Research. Revenue climbed 17% from last year to $9.56 billion, also eclipsing analysts’ projections.
But management predicted its revenue for the July-September period would rise at a slightly slower pace of 14% from the same time last year, lagging the 18% growth that analysts had been anticipating.
The forecast contributed to a muted reaction from investors who have driven up Netflix’s stock price by 32% so far this year. After initially falling by 3% in extended trading after the second-quarter report came out, Netflix shares recovered and were up about 1%.
Given that the competition in video streaming seems to be ramping up again, Investing.com analyst Thomas Monteiro called “the lowering of guidance an intelligent strategy for keeping excitement put amid sky-high expectations.”
As part of a shakeup that began in mid-2022, Netflix has been blocking the previously widespread practice of sharing subscriber passwords.
