Netflix Earnings Q3 2023
Posted:Netflix Adds 8.7 Million New Subscribers Amidst Challenging Writers Strikes
In Q3FY23, Netflix achieved a substantial increase in its subscriber base, with a net growth of 8.8 million users. This marked the most significant quarterly expansion since the second quarter of 2020, a period characterized by a surge in new sign-ups due to COVID-19 stay-at-home measures. The increase in subscriber base came during the time there were writers and actors strikes in the US. (Source: CNBC)
Moreover, the company announced that it will increase monthly charges for its UK basic service from £1 to £7.99 and the premium option prices will go up from £2 to £17.99 going forward. The company will raise its monthly prices in Britain and France. In the United States, the premium plan will see a monthly price increase of $3, bringing it to $22.99. In France, premium subscribers will experience a €2 price hike, with the new monthly cost being €19.99. (Source: BBC News)
The company reported third-quarter revenue of $8.5 billion as compared to $7.9 billion same period last year. It increased by 7.8% YoY. The revenue growth was due to the roll-out of password sharing, now limiting the use of an account to one household and the growth in subscribers is attributed to a total global subscriber base of 247 million. (Source: Netflix)
Netflix reported an operating income of $1.9 billion as compared to $1.5 billion last year up by 25% YoY and the operating margin for Q3 was at 22.4% as compared to 19.3% in Q3FY22. (Source: Netflix)
The company's net income saw a significant increase, reaching $1.6 billion, which is nearly 20% higher than Q3FY22. However, Netflix is anticipated to reduce its content spending this year to approximately $13 billion, compared to $17 billion the previous year. This adjustment is due to factors such as the recently concluded writers' strike and the ongoing actors' strike, which resumed after recent negotiations failed. (Source: Netflix)
Netflix for the fourth quarter anticipates a decline in net income due to increased marketing expenses related to the release of more movies and series. This includes highly anticipated titles like the final season of "The Crown" and Zack Snyder's high-budget sci-fi fantasy, "Rebel Moon." (Source: Netflix)
Netflix also reported substantial growth in its ad-tier memberships, which increased by almost 70%. Additionally, the company noted that 30% of new subscriptions in the 12 countries where the ad tier was available were for the more budget-friendly option. (Source: Netflix)
For Q4FY23 the company anticipates revenue of $8.7 billion, up 11% YoY and 12% on an FX neutral basis. (Source: Netflix)
Netflix for full-year FY23 expects operating margin forecast of 20% which is the the high end of the company's prior expectations. (Source: Netflix)
Nextflix on October 18, rose nearly 13.8% at 5:24 a.m. ET in premarket trade. (Source: CNBC)
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