Netflix (NFLX) stock is up 6% after the company reported better-than-expected second quarter
earnings.
The streaming giant announced that it lost one million global subscribers in Q2, which was half
the two million in lost subscribers the company had forecast ahead of its earnings results being
made public.
Importantly, Netflix said it lost a total of 1.3 million subscribers in the U.S. and Canada during
the April through June period, marking the third time in the last five quarters that the Los Gatos,
California-based company has lost paid subscribers in its biggest and most profitable market.
For the third quarter, Netflix forecasts it will add about one million new subscribers — below the
1.8 million average analyst estimate, according to Refinitv data.
In releasing its second quarter results, Netflix provided more details on its plan to turnaround its
business through a new advertising supported streaming tier. The company said the new ad-
supported tier will launch early next year (2023).
The company announced recently that it will partner with Microsoft (MSFT) on the new
advertisements that will appear on the Netflix streaming platform.
Netflix also detailed plans to crack down on password sharing, particularly in Latin America.
In terms of its financial results, Netflix said its share of total TV viewing in America hit an all-time
high in June at 7.7%. The company’s revenue grew 8.6% to $7.97 billion U.S. during Q2. That
missed Wall Street estimates of $8.04 billion U.S. in revenue.
Total subscribers in the second quarter came to 220.7 million, compared with estimates of 220.2
million. Earnings per share of $3.20 U.S. a share beat analysts’ average estimate.
Regarding forward guidance, Netflix forecast its earnings in the current third quarter will come in
at $2.14 U.S. per share, compared with Wall Street estimates of $2.72 U.S.
Netflix stock is down 66% on the year at $201.63 per share.