Netflix said on Thursday it added more than 8 million subscribers in its second quarter as the streaming service benefited from a password-sharing crackdown and such titles as Bridgerton, Baby Reindeer and The Roast of Tom Brady.
While the subscriber gains topped analyst predictions, Netflix also cautioned that third-quarter subscriber gains would be lower than the comparable period in 2023 when the password-sharing crackdown had just started.
Netflix shares fell 4 per cent in after-hours trading to $617.32 (€566.65).
At the end of June, the new sign-ups brought the total number of global Netflix subscribers to more than 277 million.
The company reported diluted per share earnings of $4.88, compared with consensus forecasts of $4.74 a share, according to LSEG. Revenue for the quarter reached $9.56 billion, in line with estimates.
Wall Street investors have been monitoring the growth of Neflix’s ad-supported tier, which has been fuelled by the company’s crackdown on password-sharing, pricing increases for ad-free tiers and new consumer bundles, such as Comcast’s “StreamSaver” bundle, which combines Netflix with Peacock and Apple TV+.
Netflix said its ad tier membership grew 34 per cent from the prior quarter, but it did not say how many subscribers chose that option.
“Our ad business is growing nicely and is becoming a more meaningful contributor to our business,” Netflix said in its letter to investors. “But building a business from scratch takes time – and coupled with the large size of our subscription revenue – we don’t expect advertising to be a primary driver of our revenue growth in 2024 or 2025.”
The company said it expected third-quarter revenue growth of 14 per cent, compared with a year ago.
Three years into its video game initiative, Netflix said it planned to release a multiplayer game based on Squid Game later this year when it debuts season two of the dystopian Korean series. It also plans games tied to Emily in Paris and Selling Sunset. – Reuters
