Netflix Inc (NFLX) reported strong third-quarter results that topped market expectations. The third-quarter revenue came up to $7.93 billion, a 5.9% increase year-over-year ($7.48 billion in the same period a year ago), beating the consensus estimate of $7.84 billion. The earnings reported at $1.4 billion or $3.10 per share, also above the analyst’s expectations of $2.13. The same quarter’s earnings for the previous year were at $3.16 a share.
The worldwide streaming paid net additions came up to 2.4 million topping the Wall Street expectations of 1 million.
In the second fiscal quarter, NFLX revenue increased by 9% (YOY), supported by a 6% and 2% increase in average paid memberships (APM) and Average Revenue per Membership (ARM). Excluding the impact of foreign exchange, the Average Revenue per Membership rose almost 7% (YOY). Earnings per share were $3.20 vs. $2.97 a year ago
The company now sees Q4 earnings of $0.36 per share, below the forecasts of $1.12, with revenue for the period expected to be $7.78 billion lower than the expectations of $7.97 billion. The company now expects $4.5 million paid net adds compared to 8.3 million in Q4 2021.
The strong USD will negatively impact revenue by around $1 billion in 2022.
Investors cheered the announcement that Netflix will start “Basic with ads” service in early November initially in the USA. as the competition intensifies in the streaming sphere and Disney+ (DIS) managed to dethrone Netflix as the market leader in four months ago. NFLX has 221 million users around the world and expects it will get three dollars per viewer in ad revenue.
Netflix’s share closed today 1.73% lower at $240.86, despite the positive momentum in the major stock indices on Wall Street and around the globe. NFLX stock has lost 60% in 2022 while in the last three months has gained over 19%. Netflix stock hit an all-time high at 700.99 on November 17, 2021. The market capitalization stands at $109 billion.
In the aftermarket trading Netflix stock is 14.52% higher at $275.74.
Nikolas has been involved in the finance industry for over fifteen years spanning across Europe and USA with a depth of knowledge and experience within many aspects of the financial markets. Nikolas gained several years experience with some of the Europe’s leading Brokers, as equity analyst, and trader managing accounts for both Private and Corporate Investors. He enjoys both the fundamental and technical aspects of trading focusing on stock markets and all FX majors. Currently, Nikolas provides analysis and comments to online financial publications. Educational background in Economics (BSc), and Finance (MSc).