Since the pandemic three years ago, Netflix has experienced the highest springtime subscriber surge. This is the most recent indication that a recent crackdown on password sharing and the introduction of a less expensive subscription option are having an impact.
After Netflix cracked down on password sharing this spring, a wave of new subscribers arrived. According to the Antenna report, since alerting its members in late May of its new password-sharing policy, Netflix saw roughly 100,000 daily signups on two different days.
In its second-quarter financial report for 2023, the video streaming service added 5.9 million subscribers, representing an 8% growth year-on-year. This shows that the recent crackdown on password sharing is paying off. Despite the subscriber’s growth, its stock price fell 8%. Let’s take a look at the report.
Netflix 2023 Second-quarter Financial Report
In the record, Netflix recorded $8.187 billion in revenue, an annual increase of 2.7%, which was lower than the $8.3 billion expected by Refinitiv analysts, while an operating profit of $1.827 billion, with an operating profit margin of 22.3%, net profit of $1.488 billion and EPS of $3.29, which were also higher than the $2.86 expected by Refinitiv analysts.
The outside world continues to focus on the paying members’ portion of the release. There were 238.39 million paid members worldwide in the third quarter, an increase of 5.89 million from the second quarter and an increase of 8% over the same period last year. It’s important to note that after-hours trading saw Netflix’s stock price drop 8.26% to $438.15 as a result of the financial report’s release.
Netflix is confident about revenue growth in the second half of the year, especially in the fourth quarter, which is predicted to rise even more as it continues to push more viewers’ paid memberships and the basic ad version plan to expand steadily. The third quarter is anticipated to bring Netflix revenue of 8.52 billion, a growth of 7.5% annually, and earnings per share of 3.52%.
Moving on, Netflix predicted its subscriber growth during the July-September period will be similar to the numbers posted from April through June. After going through a difficult period during which it lost 1.2 million customers in the first half of last year, money manager Louis Navellier said Netflix now appears locked and loaded once more. Netflix has recovered this year, but Investing.com analyst Jesse Cohen predicts another slowdown may be on the way.
