Netflix Adds 1.75 Million New Subscribers in Q1 2023 After Password Sharing Crackdown, Ad-Supported Tier
Netflix on Tuesday reported first-quarter revenue and earnings roughly in line with Wall Street expectations but offered a forecast below analyst estimates for the next three months.
The streaming video pioneer began to reap the benefits of a crackdown on password sharing and the introduction of an ad-supported tier.
From January through March, Netflix posted diluted earnings of $2.88 (roughly Rs. 236) per share, compared with Wall Street’s forecast of $2.86 (roughly Rs. 234). The company posted revenue of $8.162 billion (roughly Rs. 670 crore), in line with analyst estimates from Refinitiv.
Looking ahead, Netflix forecast $8.242 billion (roughly Rs. 676 crore) in revenue and $2.86 (roughly Rs. 236) in diluted EPS for the second quarter. Wall Street had been projecting $8.476 billion (roughly Rs. 696 crore) for revenue and $3.05 (roughly Rs. 250) for diluted EPS.
Netflix serves as a bellwether for the streaming industry, in which growth has slowed as competition has heated up.
The company added 1.75 million subscribers in the quarter, missing analyst estimates of 2.06 million additions.
A year ago, Netflix lost 200,000 subscribers – its first subscriber decline in more than a decade, sending its stock reeling and resetting Wall Street’s expectations for the sector.
The March quarter lacked major releases with non-English shows such as Korean revenge drama “The Glory” and the third season of Mexican drama “La Reina del Sur” doing well, according to Jefferies.
Netflix has faced strong competition from Walt Disney, Amazon.com and Warner Bros Discovery. Amazon knocked Netflix off the top spot in the United States last year, according to consulting firm Parks Associate.
Netflix in November introduced a streaming plan with advertising for $6.99 (roughly Rs. 574) per month in 12 countries, after resisting commercials for years. Disney’s Hulu and Disney+, and HBO Max already have ad-supported options.
© Thomson Reuters 2023