The streaming giant Netflix published its financial results for the third quarter of 2022 this evening (Tuesday). In the last year, Netflix was caught up in a deep crisis that led it to a deep reckoning. stock Netflix fell by about 66% and its market value shrank by about two-thirds, to $104 billion today from a market value of more than $300 billion.
The stock ended the trading day on Wall Street down 1.7%, and now after the publication of the reports the stock is jumping 12% in late trading.
● Netflix launches the route including commercials in November. how much will it cost
● Because of the cost of living – Netflix viewers and streaming services are canceling subscriptions. What will the future of the industry look like?
According to the reports, adjusted earnings per share were $3.10, above analysts’ forecasts of $2.12 per share. This is a slight decrease compared to the third quarter last year, when it reported $3.19 per share. In the corresponding quarter in 2020, the figure was $1.74 per share.
In terms of revenue, analysts expected there to be an increase compared to last year, when $7.5 billion was reported. They expected that in the current quarter Netflix would report 7.8 billion dollars, and in practice the company reported 7.9 billion, so here too it exceeded the forecasts.
One of the most important metrics that investors are tracking right now is the number of paid subscribers. In the last two reported quarters, Netflix reported losing users. At first the company lost about 200 thousand net subscribers for the first time in a decade, and in the previous reported quarter the company reported that about a million subscribers left it net.
In the current reports, Netflix reported an addition of 2.41 million subscribers, an increase from previous quarters, and above forecasts that assumed it would add 1.09 million subscribers in the quarter. In fact, Netflix regained the number of subscribers it lost in the last two quarters along with a very substantial addition. In the first quarter of 2022, as mentioned, it lost about 200 thousand, in the second quarter it lost about 900 thousand. Investors look at this figure with a magnifying glass, to see if the company is losing its growth engines, or if it is doing its job properly.
These data are important mainly because of the tough competition that Netflix has around the world and because of the rising inflation that forces many people in the world to cut back on unnecessary expenses. Other streaming platforms are competing for home entertainment budgets that have been hit by the economic situation around the world, as shown by research firm Kantar, which found that four in ten Britons plan to cancel a subscription to a streaming service.
Go to commercials
Beyond the loss of users, Netflix has a difficult problem to deal with: the problem of sharing passwords around the world. The company has already presented quite a bit how much this is a significant problem that it is interested in addressing and solving. Recently, there have been reports of all kinds of features that will lead everyone in these directions, but the established global solution has not yet been published.
One of the solutions recently launched by Netflix is a track with commercials. On November 3, Netflix will offer consumers a $6.99 per month package, which includes the base package with commercials that will average between 4 and 5 minutes of commercials per hour. The commercials will be between 15 and 30 seconds long, and will appear before and during programs as well. In addition, users will not be able to download movies and series to the devices, the video resolution in the application will be 720 pixels, and not all Netflix content will be available. Currently, the service will be available in 12 countries: USA, UK, Spain, Mexico, South Korea, Japan, Italy, Germany, France, Canada, Brazil, and Australia.