Despite providing a weaker-than-anticipated outlook on Tuesday, Netflix Inc. topped Wall Street earnings projections for the first quarter, highlighting the difficulties the seasoned streaming service confronts in pursuing growth.
The business claimed it delayed some financial gains by delaying the wider introduction of a scheme to stop unapproved password sharing into the second quarter in order to make changes, but claimed it was happy with the early results.
The market leader in streaming video is exploring for additional revenue streams, including as a new ad-supported service and a password crackdown, as it shows indications of market saturation.
The first quarter's revenue and profitability were substantially in line with Refinitiv's average analyst predictions. With $8.162 billion in revenue, earnings per share reached $2.88.
"We are growing and we are profitable," Co-Chief Executive Ted Sarandos said in the company's post-earnings video interview. "We have a clear path to accelerate growth in both revenue and profit, and we're executing it."
Following the release of the report, shares of Netflix fell as much as 11% before rising 1.4%.
The streaming sector, whose growth has stalled as competition has risen, looks to Netflix as a leading indicator.
Analyst projections of 2.06 million new streaming customers were not met by Netflix's 1.75 million subscriber growth from January to March.
The first-quarter results were characterized as mixed by PP Foresight analyst Paolo Pescatore.
"Netflix is a mature business reinforcing less reliance on subscriber growth. However, this metric still moves the needle for key stakeholders," he said.
The business launched its password-sharing solution, which includes a "paid sharing" option, in 12 countries in February but is deferring further development.
"We believe it will result in a better outcome for our members and our business," the company said. Netflix also said it was "on track to meet our full year 2023 financial objectives."
According to Netflix, the crackdown on password sharing will start in the United States this quarter.
The business anticipated $8.242 billion in revenue and $2.86 in diluted EPS for the period of April through June. Wall Street had estimated revenue of $8.476 billion and diluted earnings per share of $3.05.
Additionally, Netflix is attempting live streaming. When a reunion program that was scheduled to air live on Sunday wasn't available, the corporation infuriated "Love is Blind" viewers. Co-CEO Greg Peters claimed on Tuesday that the incident was caused by a "bug" that has already been repaired.
For the first time in more than a decade, Netflix lost 200,000 customers a year ago, sending its stock tumbling and upending Wall Street's forecasts for the industry.
According to research company MoffettNathanson, Netflix attracted about 9 million users in 2022, which is less than the 18 million added the year before. A large portion of this growth came from Asia. The company claimed that the advances it gained in Asia and Latin America had an effect on the average revenue per user and caused Netflix to alter its business model.
In the fourth quarter, the company launched a less expensive version of its service with advertisements in 12 countries.
The crackdown on password sharing, according to UBS media analyst John Hodulik, may help Netflix's budding advertising revenue by driving these "sharers" to the less expensive tier of the service.
In order to avert a strike, Sarandos said Netflix hopes Hollywood studios can achieve a "fair and equitable" agreement with writers. However, he said that in the event that American production is hampered, the firm has access to programs from other countries.
(Source:www.moneycontrol.com)
The business claimed it delayed some financial gains by delaying the wider introduction of a scheme to stop unapproved password sharing into the second quarter in order to make changes, but claimed it was happy with the early results.
The market leader in streaming video is exploring for additional revenue streams, including as a new ad-supported service and a password crackdown, as it shows indications of market saturation.
The first quarter's revenue and profitability were substantially in line with Refinitiv's average analyst predictions. With $8.162 billion in revenue, earnings per share reached $2.88.
"We are growing and we are profitable," Co-Chief Executive Ted Sarandos said in the company's post-earnings video interview. "We have a clear path to accelerate growth in both revenue and profit, and we're executing it."
Following the release of the report, shares of Netflix fell as much as 11% before rising 1.4%.
The streaming sector, whose growth has stalled as competition has risen, looks to Netflix as a leading indicator.
Analyst projections of 2.06 million new streaming customers were not met by Netflix's 1.75 million subscriber growth from January to March.
The first-quarter results were characterized as mixed by PP Foresight analyst Paolo Pescatore.
"Netflix is a mature business reinforcing less reliance on subscriber growth. However, this metric still moves the needle for key stakeholders," he said.
The business launched its password-sharing solution, which includes a "paid sharing" option, in 12 countries in February but is deferring further development.
"We believe it will result in a better outcome for our members and our business," the company said. Netflix also said it was "on track to meet our full year 2023 financial objectives."
According to Netflix, the crackdown on password sharing will start in the United States this quarter.
The business anticipated $8.242 billion in revenue and $2.86 in diluted EPS for the period of April through June. Wall Street had estimated revenue of $8.476 billion and diluted earnings per share of $3.05.
Additionally, Netflix is attempting live streaming. When a reunion program that was scheduled to air live on Sunday wasn't available, the corporation infuriated "Love is Blind" viewers. Co-CEO Greg Peters claimed on Tuesday that the incident was caused by a "bug" that has already been repaired.
For the first time in more than a decade, Netflix lost 200,000 customers a year ago, sending its stock tumbling and upending Wall Street's forecasts for the industry.
According to research company MoffettNathanson, Netflix attracted about 9 million users in 2022, which is less than the 18 million added the year before. A large portion of this growth came from Asia. The company claimed that the advances it gained in Asia and Latin America had an effect on the average revenue per user and caused Netflix to alter its business model.
In the fourth quarter, the company launched a less expensive version of its service with advertisements in 12 countries.
The crackdown on password sharing, according to UBS media analyst John Hodulik, may help Netflix's budding advertising revenue by driving these "sharers" to the less expensive tier of the service.
In order to avert a strike, Sarandos said Netflix hopes Hollywood studios can achieve a "fair and equitable" agreement with writers. However, he said that in the event that American production is hampered, the firm has access to programs from other countries.
(Source:www.moneycontrol.com)
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