By
Mayowa Adebajo
February 13th, 2024
Netflix wrote in its fiscal Q3 earnings announcement that it is “optimistic” about its new advertising business.
American subscription streaming service and production company Netflix Inc (NASDAQ: NFLX) reported a better-than-expected fiscal Q3 report, pushing the company’s shares to gain 14.38% in the after-hours session. Revenue came in at $7.93 billion, crossing over analysts’ expectations of $7.85. Also, adjusted earnings per share (EPS) was $3.10 versus the $2.22 predicted. In the last five days, NFLX stock has popped more than 9%. Also, the production company released a number of big hits that became its all-time most-watched series and films. They include Stranger Things S4 and Monster: The Jeffrey Dahmer Story. Others are The Gray Man, Purple Hearts, and Extraordinary Attorney Woo.
Netflix Sees 2.41 Million Subscribers in Fiscal Q3
In addition, Netflix welcomed 2.41 million net global subscribers during the fiscal Q3. The number of new subscribers was significantly more than the company’s estimation of just a million. This means that the streaming service added more than X2 of its expected number of net subscribers. Netflix revealed that a large percentage of the total net subscribers during the fiscal Q3 were from the Asia-Pacific region. The new customers from the location were about 1.43 million, while the US-Canada jurisdiction has the lowest. Subscribers from the US-Canada region were around 100,000.
During the earnings call, Chief Financial Officer Spencer Neuman said the company is building momentum. He noted that Netflix is still not growing at the desired pace, but the company is excited about the gradual progress. He added that there is still a lot of work to do to grow stronger. In the fiscal Q3 report, the company also added:
“After a challenging first half, we believe we’re on a path to reaaccelerate growth. 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.”
For fiscal Q4, Netflix expects to see $7.8 billion in revenue. Also, the company is predicting to record an additional 4.5 million paid net subscribers in the coming quarter.
Netflix’s New Service
Furthermore, Netflix wrote in its fiscal Q3 earnings announcement that it is “optimistic” about its new advertising business. The company recently announced its new ad-supported plan tagged “Basic with Ads.” The new service will cost $6.99 per month once it rolls out in November. Subscribers of the Basic with Ads plan will have to watch 15-3 seconds long commercials before and during Netflix content. Meanwhile, CEO Reed Hastings was never in support of an ad-supported service. The chief executive once disregarded the idea stating that “long term, there’s not easy money there.”
With the introduction of the new plan, Netflix said in its fiscal Q3 report that it is anticipating higher numbers of members.