Fans gather at the Netflix booth at a trade show.
Mike Blake | Reuters
Netflix shares jumped 8% after the company said it lost fewer subscribers than anticipated during the second quarter.
The company also said it aimed to unveil its lower-cost, ad-supported tier in early 2023. This comes on the heels of Netflix tapping Microsoft to be its partner on the ad-supported offering.
“We’ll likely start in a handful of markets where advertising spend is significant,” the company explained. “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.”
Netflix had warned investors last quarter that it expected to shed around 2 million subscribers, but only lost around 970,000 during the three month period ending June 30.
Here are the results:
- EPS: $3.20 vs $2.94 per share, according to Refinitiv.
- Revenue: $7.97 billion, vs. $8.035 billion, according to Refinitiv survey.
- Global paid net subscribers: A loss of 970,000 subscribers vs. expectations of a loss of 2 million, according to StreetAccount estimates.
The company told shareholders that it expects net adds to reach 1 million in the third quarter, reversing some losses seen during the first half of the year. Analysts had predicted Netflix would guide for growth of around 1.8 million.
Netflix also noted that it is in the early stages of its paid sharing plan. This is an effort it mentioned last quarter that would upcharge some members for sharing their subscription with family members or friends that live outside their home. The company said it is looking at two different approaches in test cases in Latin American that can inform a wider rollout in 2023.
This s a breaking news story. Please check back for updates.
