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Netflix Lost 970,000 Subscribers in Q2

Netflix expects to add 1 million subs in the ongoing third quarter of 2022.

Millie Bobby Brown as Eleven in "Stranger Things 4."

Millie Bobby Brown as Eleven in “Stranger Things 4.”


Netflix lost 970,000 global paid subscribers in the second quarter of 2022, a decline that was not nearly as bad as the 2 million Netflix suggested during its Q1 financials in April. As of June 30, Netflix had 220.67 million subs combined in all of its territories around the world.

The company said Tuesday it expects to add 1 million subscribers in the ongoing third quarter.

In April, Netflix forecast Q2 revenue of $1.354 billion of net income — or diluted earnings per share (EPS) of $3 — on $8.053 billion in revenue. Execs foresaw a subscriber tally of 219.64 million. On Tuesday, the company reported net income of $1.441 billion — or diluted EPS of $3.20 — on $7.970 billion in revenue. Netflix topped all of those predictions, except revenue — despite top-line sales figure growing at 8.6 percent from the same quarter last year.

In Q1 2022, Netflix shed 200,000 subscribers — its first loss in a decade — followed by about $80 billion in market cap. The sub decline came as a shock to Wall Street since Netflix previously predicted it would add 2.5 million subscribers in the January-March quarter. Some of the company’s losses were tied to Russia’s invasion of the Ukraine, which disrupted service in that part of the world.

At the time, Netflix reported net income of $1.597 billion, or diluted EPS of $3.53, on $7.868 billion in revenue. The Q1 letter to shareholder started: “Our revenue growth has slowed considerably…” Indeed — and that’s to say nothing of its traditional sub growth.

Back then, Netflix executives shared their internal expectation that the April-June quarter would result in a second-quarter loss of 2 million more subscribers. They also shared a plan: Come down hard on password sharing and introduce an ad-supported tier. At the time, Netflix estimated its paying subscribers share the service with an additional 100 million households, more than 30 million of which come from the U.S. and Canada.

While its password-sharing crackdown and AVOD tier are still in their infancy, both are expected to roll out in 2023. The cheaper, ad-supported tier is aiming for “early 2023,” Netflix said Tuesday. Netflix announced last week it selected Microsoft to be its global advertising technology and sales partner.

The clear standout for Netflix in the second quarter was “Stranger Things 4.” The fourth season of the Duffer Brothers’ sci-fi series broke all of the streaming service’s English-language viewership records. (Only Korean series “Squid Game” Season 1 was more watched within its first 28 days of availability, which is the cutoff Netflix uses to judge the popularity of its shows and movies.)

It feels like a lifetime ago, but back in November Netflix stock (NFLX) traded just north of $700 per share. This afternoon, shares closed at $201.63, but jumped another $15 per share or so in the earliest after-hours trading.

A video interview with Netflix co-CEO Reed Hastings, co-CEO & Chief Content Officer Ted Sarandos, CFO Spence Neumann, COO & Chief Product Officer Greg Peters, and VP, IR & Corporate Development Spencer Wang will be made available today on YouTube at 6 p.m. ET/3 p.m. PT p.m. The discussion of the company’s second quarter — and beyond — will be moderated by JPMorgan’s Doug Anmuth.

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