It’s been a rough year for Netflix, with the stock falling 75% from last November through May. Since then, however, it’s managed to tread water while other growth stocks pressed to fresh lows.
As a result of its recent performance, today’s earnings report was highly anticipated.
Well, the wait is over, and the company absolutely crushed it… 🤩
Its third-quarter earnings per share of $3.10 soared past estimates of $2.13. In addition, revenues nudged ahead of the $7.837 billion estimated, coming in at $7.93 billion.
Most importantly, global paid net subscribers came in well above expectations. Wall Street was looking for 1.09 million new subscribers, which the company more than doubled at 2.41 million. With that said, beginning next quarter, it will no longer provide guidance for its paid memberships, choosing only to report them during its earnings release.
Its second-quarter earnings showed signs that its subscriber numbers were stabilizing. Today’s data shows that was the case as the company continues to roll out efforts to reduce churn and reaccelerate growth. The most highly-anticipated change is its $6.99/month ad-supported tier which will launch in 12 countries this November.
With that said, the company continues to spend heavily on content as streaming competition remains stiff. In Q2, it stated it would spend roughly $17 billion per year on content. This quarter, it reiterated its commitment to pleasing members, so investors can expect that to continue.
So far, market participants are applauding the news, with $NFLX shares up 14%. đź‘Ź
Over the next few days, technical analysts will watch how prices react to the open price gap from April and the downward-sloping 200-day moving average. đź‘€
