The 5.1 million subscribers Netflix added within the July-September period represented a 42% decline from total gains in the identical period last yr. Still, the corporate’s sales and profits grew faster than analysts had forecast, in accordance with FactSet Research.
Netflix’s global subscribers
Netflix ended September with 282.7 million global subscribers – way over every other streaming service.
The Los Gatos, California-based company earned $2.36 billion, or $5.40 per share, up 41% from the identical period last yr. Sales rose 15% yr over yr to $9.82 billion. Netflix management forecast that the corporate’s October-December revenue would rise 15% yr over yr, barely higher than analysts expected.
Last quarter’s strong financial performance, coupled with optimistic guidance, overcame any concerns about slowing subscriber growth. Netflix’s share price rose nearly 4% in prolonged trading after the earnings release, constructing on a greater than 40% rise in the corporate’s shares this yr.
What drove Netflix’s subscriber growth?
Subscriber growth last quarter was the bottom in any three-month period for the reason that start of last yr. This decline suggests that Netflix is moving right into a recent phase after benefiting from a ban on the once-widespread practice of sharing account passwords, which allowed an estimated 100 million people to look at its popular service without paying.
The crackdown, sparked by a rare post-pandemic subscriber loss in 2022, helped Netflix add 57 million subscribers from June 2022 to June of this yr – a median of greater than 7 million per quarter, while lots of its industry rivals Problems occurred as households restricted their discretionary spending.
Netflix’s gains were also boosted by a low-cost version of its service that included commercials for the primary time in its history. The company still gets only a small portion of its revenue from its two-year-old promoting push, but Netflix is increasing its concentrate on this business segment to spice up its profits.
The streaming giant’s promoting plans
In a letter to shareholders, Netflix reiterated previous warnings about its expansion into promoting, at the same time as its low-cost option with commercials has turn into its fastest-growing segment.
