Global subscriber levels reached 223.09 million, up from 220.67 million in the prior quarter, ending a streak of two quarters when subscriber levels fell. Revenue and earnings per share also both came in ahead of expectations.
The gain of 2.4 million subscribers more than doubled analysts’ consensus estimate of 1.09 million. Revenue of $7.926 billion and earnings per share of $3.10 exceeded forecasts for $7.84 billion and $2.19, respectively.
The company has been on its back foot through most of 2022 after two straight quarters of subscriber declines and a 70% drop in stock price (from which shares have bounced back to some extent). Execs have made several aggressive moves aimed at showing employees and Wall Street that it is serious about making a comeback, citing past fiascoes like the aborted 2011 plan to separate its physical DVD business from streaming. The company in recent months has announced a freeze on content spending increases, laid off hundreds of staffers and, most notable of all, reversed a years-long stance on advertising. Netflix’s new, ad-supported tier — priced at $7 a month, a dollar cheaper than the soon-to-launch basic tier of Disney+ — will go live in 12 markets in early November.
“After a challenging first half, we believe we’re on a path to reaccelerate growth,” the company said in its quarterly letter to shareholders. “The key is pleasing members. It’s why we’ve always focused on winning the competition for viewing every day. When our series and movies excite our members, they tell their friends, and then more people watch, join and stay with us.”
MORE to come …