Netflix gets 2.41M new customers in Q3 and earns $7.93B.

myDelsu News Staff

241 2 minutes read

Netflix will be relieved that it did not complete a hat trick of losing subscribers in three consecutive quarters this year. After losing 200,000 subscribers in Q1 2022 and 970,000 subscribers the following quarter, the streaming platform reversed its downward trend in the third quarter, adding 2.41 million net global subscribers.

Netflix shares rose up to 15% in after-market trading following the release of the company’s third-quarter financial results, which also exceeded analyst expectations. The streaming titan is currently worth $240.86.

“After a difficult first half, we believe we are on track to reaccelerate growth.” The key is to please members. That’s why we’ve always focused on beating the competition for daily viewing. “When our shows and movies excite our members, they tell their friends, and as a result, more people watch, join, and stay with us,” Netflix wrote in a letter to its shareholders.

“Thank God we’re done with shrinking quarters,” Netflix co-CEO Reed Hastings said during the company’s earnings call. “We’re back to being optimistic.

Obviously, this quarter and the guidance for the fourth quarter are reasonable — not spectacular, but reasonable. We need to pick up the pace.”

According to the reported financials, it clocked $7.926 billion in the quarter, exceeding analyst expectations of $7.837 billion and registering a 5.9% year-over-year (YoY) growth. Its operating income fell from $1.578 billion in Q2 2022 to $1.53 billion in Q3 2022, while its net income fell to $1.4 billion in the third quarter.

Its diluted EPS (earnings per share) surpassed analyst expectations of $2.13 to $3.10 per share.

Nonetheless, it is a better quarter for Netflix than the bleak picture it painted in the first half of the year. The addition of 2.41 million net global subscribers (which exceeded the estimated 1.99 million) brings the total number of global streaming paid memberships to 223 million, representing a 4.5% annual increase.

While it is better than losing money, it is still slower than the annual growth recorded in previous quarters (annual growth in Q2 2022 was 5.5%, while YoY growth in the first quarter was 6.7%).

“We’re still not growing as quickly as we’d like,” Netflix CFO Spencer Neumann said during the company’s earnings call. “We’re gaining traction, and we’re pleased with our progress, but we know we still have a lot of work to do.”

Netflix added 100,000 subscribers in the United States and Canada, while the Asia-Pacific region added 1.4 million paying subscribers.

It anticipates adding 4.5 million new net global subscribers during the period. It did, however, warn that the strengthening of the US dollar would continue to be a significant headwind for the company, and that it expected to lose $7.8 billion in revenue in the following quarter.

Furthermore, Netflix will refrain from providing guidance for its paid memberships, though it will continue to report the others when it reports its quarterly financials.

The fourth quarter will also show the results of Netflix’s newfound emphasis on advertising and its crackdown on password sharing.

Previously, it introduced a new ad-supported tier that will be less expensive than its existing tiers and will instead continue to display a variety of advertisements. Its crackdown on password sharing includes the introduction of features like “adding a home” and Profile Transfer.

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