By
Mayowa Adebajo
February 13th, 2024
Released Q2 Netflix results show that the company lost fewer subscribers than estimated amid plans to launch a cheaper ad-supported tier.
Netflix Inc (NASDAQ: NFLX) recently posted its anticipated Q2 earnings report, revealing a smaller-than-expected loss in its number of subscribers. The US streaming giant and production company only saw around 970,000 subscribers shirk their Netflix accounts during Q2. This number is significantly better, by more than 1 million subscribers than the company’s 2 million loss projection.
Following Sizable Q2 Exodus, Netflix Looks to Regain New Subscribers in Q3
In its Q2 letter to shareholders, Netflix revealed that it currently has a global subscriber base of 220.67 million accounts. In light of its latest quarterly report, the streaming company expects to add 1 million new subscribers in the third quarter. Furthermore, Netflix is also working towards unveiling its cheaper, ad-supported plan in early 2023. The California-headquartered media firm has enlisted Microsoft as a partner for this plan. Commenting on this, Netflix said:
“We’ll likely start in a handful of markets where advertising spend is significant. Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one.”
Key Netflix Q2 Report Figures
For the period ended June 30th, Netflix raked in $7.97 billion compared to the consensus estimate of $8.035 billion. In addition, the company’s earnings per share (EPS) came in at $3.20, which is higher than analysts’ expected $2.94 per share. Furthermore, Netflix’s free cash flow for the second quarter was $13 million compared to a loss of $175 million at the same time last year.
Overall, revenue for the prominent streaming platform was up 8.6% year over year, while operating income clocked in at $1.6 billion. Additionally, Netflix’s net income for the second quarter of 2022 came in at $1.4 billion.
Despite the positive revenue outing for Netflix, the company revealed that it absorbed a $70 million deficit for severance costs. This came following a sequence of downsizing for the quarter.
Netflix had earlier stated that it would crack down on password sharing among subscribers and is currently working towards it. As it stands, the streaming company has payment plans for password-sharing households in several countries. Netflix plans to collect additional charges from members who share their subscriptions with people living outside their homes. The company is implementing this in Latin America and plans a broader rollout for next year.
More Projected Netflix Originals
As a production company, Netflix previously stated that it intends to spend up to $18 billion on content this year. The on-demand streaming service is trying to offer users more in-house offerings and maximum flexibility on rights to movies and TV shows. A statement in the shareholder letter touched on this, saying:
“We’re now more than a decade into transforming our service from licensed second run content to mostly Netflix originals – including more than five years into building out our internal studio to produce the majority of our original titles.”
Read more business news on Coinspeaker.