Although Netflix lost nearly a million customers in the second quarter, this was only half the number it had projected in its Q1 results. Furthermore, it is now forecasting a gain of a million in the third quarter.
The company ended Q2 with 220.67 million global streaming paid memberships, down from 221.64 million three months earlier. Its revenues in Q2 amounted to $7,970 million, or 8.6% more than in the same period last year, and net income $1,441 million, slightly up on the $1,353 million posted in Q2 2021.
Netflix notes that its income in Q2 was impacted by the appreciation of the US dollar versus most other currencies. In its forecast for Q3, it sees growth of 5% translated into 12% year-on-year revenue growth on a constant currency basis. Furthermore, “as we have written in the past, over the medium term, we intend to continue to adjust our business as appropriate given the relative strength of the USD to protect our operating margin and try to avoid immediate actions that we believe could be detrimental to the business”.
Netflix also refers to the success of Stranger Things, the fourth season of which generated 1.3 billion hours viewed.
Commenting on advertising, working with Microsoft as its technology and sales partner, Netflix said it plans to launch this tier in the early part of 2023, starting in a handful of markets where ad spend is significant. “Our intention is to roll it out, listen and learn, and iterate quickly to improve the offering. So, our advertising business in a few years will likely look quite different than what it looks like on day one”.
Netflix will also roll out paid sharing in 2023 and is encouraged by its early learnings and ability to convert consumers in Latin America.
