Netflix added 5.89 million global subscribers in the second quarter of 2023, much better than Wall Street expected. (Media analyst consensus ranged from about +1.8 million caps to +2.2 million, give or take.) The company now has 238.39 million caps overall.
However, the tremendous pace didn’t translate into a revenue win.
Wall Street expected Netflix to report quarterly earnings of $2.86 per share on $8.3 billion in revenue, according to numbers compiled by Yahoo Finance. This afternoon, Netflix posted second-quarter earnings per share of $3.29 on $8.187 billion in revenue. Second quarter operating income was $1.827 billion; net income was $1.488 billion.
While Netflix missed revenue forecasts, including its domestic expectation of $8.242 billion, it topped earnings estimates. Three months ago, the company forecast second-quarter earnings of $2.84 per share.
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Netflix forecasts an even higher profit, $1.58 billion, for the summer quarter.
April-June 2023 was quite a busy time for the king of streaming. The biggest thing that happened was the introduction of “paid sharing” — what Netflix calls its crackdown on password sharing — in the US (and about 100 other countries). Towards the end of the quarter, Netflix also revamped the way it reports viewers, shaking up the company’s “most popular” rankings in the process.
Netflix had a few hits during the three-month period, though only one of them made the Top 10 of all time. As for movies, Jennifer Lopez’s “The Mother” and Chris Hemsworth’s vehicle “Extraction 2” were the standout outings; “The Mother” is now Netflix’s ninth most-watched movie ever. In the series, which is Netflix’s bread and butter, the “Bridgerton” spinoff “Queen Charlotte” was the big release in the second quarter.
“Although we have made steady progress this year, we still have a lot of work to do to re-accelerate our growth,” Netflix wrote in its Wednesday letter to shareholders. “We remain focused on: creating a steady pace of must-see shows and movies; improve monetization; increase the enjoyment of our games; and investing to improve our member service.
Other than that, it was actually quite challenging day, news-wise, already for Netflix. This morning, the streamer removed its cheaper ad-free tier as an option for new or expired subscribers in the US and UK. The scrapped “Basic” plan bills $9.99 a month, which left revenue on the table. These days, every dollar counts.
Shares of Netflix (NFLX) closed Wednesday at $477.59 a share. Streaming stock really soared in the June quarter, growing over $100 a share from the first quarter. Since the beginning of the year, NFLX stock is up about 55%.
A video interview with Netflix co-CEOs Ted Sarandos and Greg Peters and CFO Spence Neumann, moderated by BofA Securities’ Jessica Reif Ehrlich, will be available on YouTube at 3 PM PT.
