Netflix has reported a rosier Q2 compared with its last few earning periods, likely as a result of cracking down on password sharing. In May, the streamer announced that users can no longer allow people outside the home to access their account unless the user is willing to pay extra.
Per Deadline, Netflix added 5.9 million global subscribers over Q2, reaching a total of 238.3 million. This is partially due to the password-sharing crackdown that pushed people to the $7-per-month package (with ads) in order to keep watching.
At the end of last year’s Q2, Netflix reported a loss of 970,000 subscribers. In addition, free cash flow totaled $13 million a year ago. This quarter, it amounted to a whopping $1.339 billion.
Analysts forecasted earnings per share of $2.86, but Netflix easily cleared those projections with $3.29. However, total revenue was a bit below analysts’ expectations of $8.6 billion — amounting to $8.2 billion instead.
In a quarterly letter to shareholders, Netflix stated:
“Now that we’ve launched paid sharing broadly, we have increased confidence in our financial outlook. We expect revenue growth will accelerate in the second half of 2023 as monetization grows.”
The letter also reported that subscriber backlash to its decision to no longer permit password sharing outside the home was relatively minimal. Despite warnings from Netflix management, the “cancel reaction was low” in the U.S. and in many other countries, according to the statement.
Now, Netflix just has to worry about keeping all of these new subscribers happy. For now, they have Adam Driver fighting dinosaurs, which people seem to be watching despite the negative reviews because, well, where else are you going to see that?
They also have the new show from Game of Thrones showrunners David Benioff and D.B. Weiss, 3 Body Problem, which is premiering in Jan. 2024. It’s based on a book series that’s actually finished, so we’re hopeful for that one as well.
Published: Jul 19, 2023 06:30 pm