(LR) Reed Hastings and Ted Sarandos attend the “Marseille” Netflix TV series world premiere at the Palais du Faro in Marseille on May 4, 2016 in Marseille, France.
Stephen Cardinale | Corbis | Getty Images
Enough.
Netflix didn’t blow up the roof its second quarter earnings, It announced that it lost nearly 1 million global customers this quarter, the second consecutive quarter it has bleeding customers. And it lost 1.3 million customers in the US and Canada, the third time in the past five quarters it has lost paid users in its most lucrative region based on average revenue per user.
For the third quarter, Netflix estimates it will add just 1 million new subscribers — well below the 1.8 million average analyst estimate, according to StreetAccount. Even if Netflix goes ahead and adds 1 million subscribers in the next quarter, it will still have lost subscribers over the course of nine months this year. Compare this with analyst estimates from earlier this year Adds about 20 million net.
Still, Netflix shares rose more than 6% in after-hours trading. The company predicted that it would lose 2 million customers in the quarter. A drop of 1 million is better than that.
Perhaps investors’ positive sentiment toward the company is being fueled by the company’s solid plans to spur growth — most of which won’t kick in until 2023.
Netflix announced that its ad-supported product will launch in the early part of 2023. It’s actually a delay from late 2022, when Netflix expected to introduce the giveaway tier, According to a New York Times report from May.
in his quarterly shareholder letterNetflix also outlined its plans to crack down on password sharing, noting that it’s launched two different approaches in Latin America “to find an easy-to-use payment sharing offering that allows us to We believe that works for our members and our business that we can roll out in 2023.”
“We are encouraged by our early teachings and ability to convert consumers to paid sharing in Latin America,” Netflix said.
The company closed its shareholder letter with a loud talk. Investors seem to be listening to head coaches Reed Hastings and Ted Sarandos.
“Re-accelerating our revenue growth remains a major challenge,” the company wrote. “But we have gone through tough times before. We built this company to be resilient and adaptable and it will be a great test for us and our high performance culture. We are fortunate to be in a strong position. All metrics A leader in streaming entertainment by (revenue, engagement, subscribers, profit and free cash flow). We are confident and optimistic about the future.”
WATCH: CNBC full talk of Netflix earnings