Netflix Reports Financial Results Beating on Subscriber Expectations

After the closing bell on Tuesday, streaming giant Netflix reported its second quarter financial results, beating expectations for new subscribers but missing on guidance for the third quarter.

For the quarter the company reported revenue of $7.34 billion compared to $7.32 billion that was expected by analysts. Earnings per share of $2.97 was lower than the $3.14 expected. Subscribers added at 1.54 million was a lot higher than the 1.12 million anticipated.

According to Netflix earnings report, it should see 3.5 million new users in the current quarter, falling short of analysts’ expectations of 5.86 million new users.

“We think the content slate improves in [Q3] (‘Fear Street,’ ‘La Casa De Papel,’ several returning popular romcoms and unscripted series) and more so in [Q4] (‘Cobra Kai,’ ‘The Witcher,’ ‘La Casa De Papel,’ several high profile films) and into 2022 (‘Stranger Things,’ ‘Ozark’ ‘The Crown,’ ‘Bridgerton,’ others),” said Truist Securities’ Matthew Thornton in a note ahead of the earnings announcement.

Netflix said that if it meets the forecast it will hit its rate of pre-COVID net additions.

“If we achieve our forecast, we will have added more than 54 million paid net adds over the past 24 months or 27 million on an annualized basis over that time period, which is consistent with
our pre-COVID annual rate of net additions,” the company said.

Recently Netflix had hired EA and Oculus veteran Mike Verdu who is set to lead the company’s effort into the gaming arena.

CEO Reed Hastings said on the earnings call, “And the big prize is keeping revenue growth at 20%. So most of our time is like, OK, how do we get the revenue growth going, how do we have the
content that you just can’t ignore, everybody’s talking about, and that’s what fuels those big surges. And the more we do, the more we’re learning.

“So we’re making a ton of progress show by show, film by film of how to really push the consumer satisfaction. So that’s very promising. That’s work that you’ll see showing up next year and beyond,” he added.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.