Illustration: Rebecca Zisser/Axios
Netflix's stock was up more than 10% in after-hours trading Tuesday after the company said it added 2.41 million subscribers vs. the 1 million subscribers it originally forecasted last quarter.
Why it matters: "After a challenging first half, we believe we're on a path to reaccelerate growth," the company wrote in a note to investors.
Catch up quick: Netflix's stock was down nearly 60% year-to-date heading into its earnings report, following back-to-back quarters of subscriber losses.
- But the company has seen gains in the past few weeks after finally unveiling its highly anticipated ad-supported tier, which launches in the U.S. on Nov. 3.
Details: In a letter to investors, Netflix said that because it's introducing new revenue streams, it will no longer provide guidance about the number of paid memberships it plans to add the following quarter.
- But for now, the company told investors it expects to add 4.5 million subscribers next quarter, a bullish estimate considering it lost over 1 million subscribers in the first half of the year.
- The company credited some of its newer hits, such as "Monster: The Jeffrey Dahmer Story," and season 4 of "Stranger Things" for its success last quarter.
By the numbers, via CNBC:
- EPS: $3.10 vs $2.13 per share, according to Refinitiv.
- Revenue: $7.93 billion vs $7.837 billion, according to Refinitiv survey.
- Expected global paid net subscribers: Addition of 2.41 million subscribers vs. an addition of 1.09 million subscribers, according to StreetAccount estimates.
The big picture: A broader streaming subscriber slowdown happening in wake of the pandemic has pushed Wall Street to reconsider ways companies like Netflix can grow profits from existing subscribers, rather than bank on high levels of new subscriber growth.
- Netflix noted its competitive advantage in a note to investors, saying: "Our competitors are investing heavily to drive subscribers and engagement, but building a large, successful streaming business is hard – we estimate they are all losing money, with combined 2022 operating losses well over $10 billion, vs. Netflix's $5 to $6 billion annual operating profit."
Go deeper … Netflix's earnings over the past year:
- Netflix Q2 2022 earnings
- Netflix Q1 2022 earnings
- Netflix Q4 2021 earnings
- Netflix Q3 2021 earnings
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