(LR) Reed Hastings and Ted Sarandos attend “Marseille” Netflix TV Serie World Premiere At Palais Du Pharo In Marseille, on May 4, 2016 in Marseille, France.
Stephane Cardinale | Corbis | beautiful pictures
Well enough.
Netflix don’t blow the roof off its second quarter earnings. It announced it lost about 1 million global subscribers during the quarter, marking the second consecutive quarter it experienced a spike in customer base. And it lost 1.3 million subscribers in the US and Canada, marking the third time in the past five quarters it lost paid users in the most lucrative region based on average revenue per user.
For the third quarter, Netflix forecast it would add just 1 million new subscribers — below the average analyst estimate of 1.8 million, according to StreetAccount. If Netflix keeps going and adds 1 million customers next quarter, it will still lose subscribers this year after nine months. Compare that to analyst estimates from earlier this year for nearly 20 million net more.
However, Netflix stock was up more than 6% in after-hours trading. The company has predicted that it will lose 2 million subscribers this quarter. Reducing 1 million is better than that.
Perhaps investors’ positive sentiment towards the company is being fueled by the company’s specific plans to revive growth – most of which won’t take effect until 2023.
Netflix announced their ad-supported product will launch in early 2023. It was indeed a delay from late 2022, when Netflix had hoped to launch the cheaper tier, as reported by the New York Times from May.
In it quarterly shareholder letterNetflix also outlined plans to prevent password sharing, noting that it took two different approaches in Latin America to “find an easy-to-use paid sharing service that we believe is effective.” results for our members and businesses that we can roll out in 2023.”
Netflix added, “We’re encouraged by our early knowledge and ability to convert consumers to paid sharing in Latin America.”
The company closed its shareholder letter with a small talk. Investors seem to be listening to head coaches Reed Hastings and Ted Sarandos.
“Accelerating our revenue growth has been a major challenge,” the company wrote. “But we’ve been through tough times before. We’ve built this company to be flexible and adaptable, and it’s going to be a great test for us and the performance culture. We are fortunate to be the leader in online entertainment by all metrics (revenue, engagement, subscribers, profit and free cash flow). confident and optimistic about the future.”
WATCH: CNBC fully discusses Netflix earnings
