Netflix (NFLX) reported second quarter earnings that beat expectations on Thursday but the stock fell as much as 6% in after hours trading after the streaming giant’s revenue outlook missed Wall Street’s expectations for the current quarter.
Revenue hit $9.56 billion in Q2, an increase of 16.8% compared to the same period last year, as the streamer continued to lean into top-line initiatives like its crackdown on password sharing and ad-supported tier, in addition to last year’s price hikes on certain subscription plans. Analysts were expecting $9.53 billion, according to Bloomberg.
Netflix guided to third quarter revenue of $9.73 billion, a miss compared to consensus estimates of $9.83 billion. The company did increase its full-year 2024 revenue growth projection to 14% to 15%, up from the prior 13% to 15%. It also expects full-year operating margins to hit 26%, an increase from the previous 25%.
“Our updated revenue forecast reflects solid membership growth trends and business momentum, partially offset by the strengthening of the US dollar vs. most other currencies,” management said in the earnings release.
Diluted earnings per share (EPS) beat estimates in the quarter with the company reporting EPS of $4.88, above consensus expectations of $4.74 and well ahead of the $3.29 EPS figure it reported in the year-ago period. Netflix guided to third quarter EPS of $5.10, ahead of consensus calls for $4.74.
Subscribers once again came in strong with another 8 million-plus users added on the heels of key programming, such as the latest season of “Bridgerton.”
Subscriber additions of 8.05 million beat expectations of 4.7 million and follows the 9.3 million net additions the streamer added in the first quarter. The company had added 5.9 million paying users in Q2 2023.
Leading up to Thursday’s release, Netflix’s stock had been on a tear. Shares are currently up more than 30% since the start of the year.
In May, Netflix announced it won the streaming rights to two NFL games set to air on Christmas Day as part of a three-season deal. The company also told advertisers at its…
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