Netflix avoided We had the worst-case scenario of lost subscribers by nearly 1 million between April and June, and we forecast a return to customer growth in the third quarter.
Shares, which have fallen about 67% this year on concerns about the company’s long-term outlook, are up 8% in after-hours trading as a result. Investors took the forecast as a sign that Netflix could still find new subscribers despite a volatile global economy and signs of saturation in its largest markets, the US and Canada.
The world’s largest streaming service has announced plans to launch an ad-supported option next year. It also warned that the strength of the dollar is taking a toll on revenue generated from overseas subscribers.
The company said in April it expected to lose 2 million customers in the second quarter and said it would shock Wall Street and raise concerns about the sudden end of the streaming TV boom. The loss reached 970,000, about half.
“Our excitement has subsided,” Netflix CEO Reed Hastings said in an interview after the earnings were posted on YouTube. Netflix still lost subscribers. “But going forward, streaming is working everywhere… We are very optimistic about streaming.”
Hastings acknowledged a new episode in the sci-fi series. weird thingsPreventing more North Korean defectors with the most watched English program in Netflix history.
According to analysts polled by Refinitiv, Netflix expects to hit 1 million between July and September, while Wall Street analysts expect an average of 1.84 million.
Michael Pachter, an analyst at Wedbush Securities, said he expects Netflix to cut costs and increase free cash flow significantly next year. Because of that, the stock price went up,” he said.
After years of hot growth, Netflix’s fortunes changed as rivals including Disney, Warner Bros Discovery and Apple invested heavily in their own streaming services.
Netflix lost 1.3 million customers in the US and Canada in the second quarter and 770,000 customers in Europe, the Middle East and Africa. This was offset by an increase of nearly 1.1 million members in the Asia Pacific region.
In a letter to shareholders on Tuesday, Netflix said it had detailed the recent economic downturn caused by a variety of factors, including password sharing, competition and a recession.
“Our challenge and opportunity is to continuously improve our products, content and marketing over the past 25 years to accelerate revenue and membership growth, and generate better revenue for a larger audience,” the letter said.
One way the company plans to get more revenue from its members is by limiting password sharing. The company is testing two options in Latin America. It is also working to build its popularity. weird things to achieve the greatest success as a franchise.
Netflix remains the dominant streaming service with nearly 221 million paying subscribers worldwide. Co-CEO Ted Sarandos said the company sees room for “huge” growth by attracting billions of people around the world who haven’t joined yet.
“The headwinds are blowing right now and we are getting through them,” Sarandos said.
From April to June, earnings per share were $3.20, beating the Wall Street consensus of $2.94.
Netflix grew 9% to $7.97 billion, a strong U.S. dollar, beating analysts’ estimate of $8.04 billion. Sales would have risen 13% without the impact of exchange rates, the company said. — Lisa Richwine and Tiyashi Datta, (c) 2022 Reuters
Netflix After Avoiding Worst Subscriber Loss
Source link Netflix After Avoiding Worst Subscriber Loss