Netflix beats earnings, adds 5.9m subscribers amid Hollywood strike

July 20, 2023 (MLN): Netflix (NASDAQ: NFLX) reported its earnings for the second quarter of 2023, wherein the revenue clocked in at $8.19 billion [EPS: $3.29], as compared to analysts’ estimate of $8.3bn [EPS: 2.85].

Although narrowly missing on revenue, it enjoyed blockbuster earnings per share, largely beating analysts and speculators amid the company’s recent crackdown on password sharing.

Additionally, Netflix reported that it added a staggering 5.9 million subscribers in the second quarter, just one year after it had lost nearly a million subscribers.

It is worth noting that this comes amid chaos gripping Hollywood, the union representing Hollywood actors has recently announced a strike, expanding the standoff between Hollywood workers and studio executives over wages.

Amid all this chaos Netflix upped its free cash flow from $1.5bn to approximately $5bn for the year.

The company cited the “reduced spending on cash content” on the ongoing strikes by writers and actors that have stopped content production.

Co-chief executive Ted Sarandos spoke about the issue during the earnings call, stating that the company did not want this situation. “We are always making deals. We are constantly negotiating with writers, directors, actors, producers, and everyone in the industry,” Sarandos said. “And we really hoped to have an agreement by now.”

Moreover, ahead of the earnings, Netflix eliminated its cheapest ad-free option in the US and the UK.

The decision is likely aimed at encouraging customers to switch to the plan with ads, which is only $6.99.

Copyright Mettis Link News