The Netflix Inc (NASDAQ: NFLX) stock price fell 8.6% after releasing its Q2 earnings report, where its revenues came in at $8.2 billion, missing analysts’ expectations of $8.6 billion. Investors were focused on the revenue miss while ignoring all the other positive data in the report.
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For example, Netflix reported adding 5.9 million subscribers globally, a massive improvement compared to the 970,000 subscribers it lost in a similar quarter last year. The movie-streaming company saw its subscriber numbers reach a new all-time high of 238.3 million.
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The company singled out the launch of the password-sharing plan as a crucial driver of its higher subscriber numbers as more people embraced the new paid shared plans as opposed to those who unsubscribed entirely from the streaming service.
Despite the missed revenue figures, Netflix’s earnings per share were recorded at $3.29, exceeding Wall Street analysts’ consensus forecast of $2.86. The company also generated free cash flows worth $1.339 billion, which significantly departed from the $13 million recorded in Q2 2022.
Netflix shares fell despite the upbeat earnings data as investors took profits on the positions, given that the company has rallied almost 50% since the year started and was trading up against a critical resistance zone at the time of writing.
The company also commented on the double writers and actors strike that has hit most Hollywood studios hard as the production of new content grinds to a halt. Netflix has fared better than other studios since it does not air live shows and releases them in batches instead of weekly episodes on most TV stations.
Netflix has removed its base ad-free subscription of $9.99 in the UK and USA, which many see as an attempt to push such subscribers towards the ad-supported subscription tier at $6.99. The company also noted that most subscribers had embraced its decision to charge its subscribers for password sharing.
The company noted that it did not receive the subscriber backlash that many expected after implementing the password-sharing charges, which it rolled out to 100+ countries and is looking to extend the move to countries where it operates.
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Netflix stock price.
The Netflix share price traded down 8.60% at $436.53, from Wednesday’s closing price of $477.59.
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