With a midsummer increase, Netflix reversed recent subscriber losses. Management hopes to continue on this success with the impending debut of a less expensive version of the video streaming service that will have commercials for the first time.
The Los Gatos, California-based business announced on Tuesday that it added 2.4 million subscribers between July and September, reversing a 1.2 million user loss during the first half of the year due to increased competition and skyrocketing inflation that is straining household finances.
With 223 million subscribers, Netflix can once again claim the title of largest video streaming service in the world, if only temporarily. When it said in August that the service had 221 million subscribers, Walt Disney Co. overtook Netflix.
In a video conference call on Tuesday, Reed Hastings, co-CEO of Netflix, shouted, “Thank God, we are done with declining quarters. “We are back to being optimistic.”
The increase in subscribers also contributed to Netflix’s $1.4 billion profit, or $3.10 per share, a 4% decline from the same period the previous year. To $7.93 billion, revenue increased 6% over the previous year. The revenue, earnings per share, and subscriber growth all above FactSet’s forecasts of analyst expectations.
In a video conference call on Tuesday, Reed Hastings, co-CEO of Netflix, shouted, “Thank God, we are done with declining quarters. “We are back to being optimistic.”
After the most recent results were released, Netflix’s shares increased by roughly 14%. Even still, the stock has nevertheless decreased in value by more than 50% so far this year, reflecting concerns that Netflix’s golden age has come to an end.
Netflix’s first ad-supported plan, which launches in the US and 11 other territories in early November, will try to build on the company’s recent growth. The new option will cost $7 per month in the US, which is less than half of the $15.50 monthly price of Netflix’s most popular plan without commercial breaks.
In a sign of renewed confidence in the company’s future, Investing.com analyst Haris Anwar stated that “Netflix still has a lot of potential to grow and take the share in a price-sensitive industry.”
Netflix management anticipates adding 4.5 million customers between October and December, which may be an indication the company doesn’t expect the ad-supported plan to be a big success right away. It would still be less than the 8.3 million customers added during the same holiday season last year, despite being Netflix’s largest quarterly growth this year.