Netflix tops second quarter targets but cautious on outlook
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The news: Netflix’s subscriber gains have topped analyst predictions as the streaming giant benefited from a password-sharing crackdown and new shows and seasons including Bridgerton and Baby Reindeer.
The numbers: The company said it added more than 8 million subscribers in its second quarter, ahead of analyst predictions of 5 million. It reported diluted per-share earnings of USD4.88 ($7.28), compared with consensus forecasts of USD4.74, while revenue for the June quarter reached USD9.56 billion, in line with estimates.
Netflix shares rose 0.08% to $643.52 during after hours trade in New York.
The context: At the end of June, the new sign-ups brought the total number of global Netflix subscribers to more than 277 million. The streaming video pioneer is facing saturation in the US and told Wall Street last quarter that it plans to stop regularly reporting new subscriber additions next year.
Investors have been monitoring the growth of Netflix's ad-supported tier, which has been fuelled by the company's crackdown on password-sharing, pricing increases for ad-free tiers and new consumer bundles. Netflix said its ad tier membership grew 34% from the prior quarter, but did not say how many subscribers chose that option.
Netflix does not expect advertising to be a primary driver of revenue growth until at least 2026. It also cautioned that third-quarter subscriber gains would be lower than the comparable period in 2023 when the password-sharing crackdown had just started. It expects September quarter revenue growth of 14%, compared with a year ago.
