Netflix Adds 2.4 Million Customers, Reveals Password-Sharing Crackdown

The firm reported better-than-expected results on the top and bottom lines, which caused Netflix shares to soar more than 14% after the bell on Tuesday. Additionally, the streamer announced a 2.41 million net global subscriber increase, more than double the additions the firm had anticipated a quarter earlier.

Netflix will also start cracking down on password sharing next year, preferring to let users using borrowed accounts create their own. The business will also allow users who share accounts to set up sub-accounts so that they can pay for friends or family members to utilize theirs.

Here are the results:

  • Refinitiv’s EPS was $3.10 instead of $2.13 per share.
  • According to a poll by Refinitiv, revenue was $7.93 billion as opposed to $7.837 billion.
  • StreetAccount believes that 2.41 million additional global paid net customers are anticipated as opposed to 1.09 million other subscribers.

Asia-Pacific accounted for 1.43 million additional Netflix customers during the quarter, making up most of the company’s net subscriber increase. With just 100,000 net customers added, the Netflix area for the US and Canada experienced the slowest growth.

During the company’s earnings call, Netflix’s chief financial officer, Spencer Neumann, stated, We’re still not growing as quickly as we’d want. We have momentum and are happy with our development, but we are aware there is still much work to be done.

Netflix third quarter results
Netflix third-quarter results

Starting the next quarter, Netflix will stop guiding its paid subscriptions but will still reveal those figures when it releases its quarterly earnings. Due mainly to currency headwinds abroad, Netflix predicted it would add 4.5 million customers during the first quarter of its fiscal year and stated it anticipates revenue of $7.8 billion.

The fourth season of “Stranger Things,”The Gray Man,” and “Purple Hearts,” among others, were hailed by the firm as successes that aided in the third quarter’s growth. It also hinted at the inclusion of its brand-new, less expensive ad-supported plan, which debuts in 12 nations in November.

The streamer expressed its “great optimism” on its new advertising venture. It does not anticipate that the new tier will materially impact its fourth-quarter results, but it does expect that membership will progressively increase over time.

Based on its upcoming content schedule and the regular seasonality that occurs over the final three months of the year, it currently expects subscriber growth. The business stated on Tuesday that it “believes we’re on a path to reaccelerate growth” after a difficult first half. The secret is winning over members.

That is why we have consistently concentrated on outperforming the opposition for daily viewing. When our members enjoy our television shows and films, they recommend them to their friends, who then watch, subscribe, and stay with us.

Final Phases

After losing subscribers for two straight quarters, Netflix started growing again in the third quarter of 2022. It told investors it expects a solid fourth quarter to end the year, even though it doesn’t expect significant gains right away from launching its cheaper, ad-supported plans.

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