Reed Hastings, CEO Van Netflix
Joan Croce Garcia | Corbis | Getty Images
Shares of Netflix fell nearly 1% after Tuesday’s bell when the company reported profits that missed the final result and subscriber additions. The company’s sales were slightly higher than anticipated, and this confirmed speculation that it would be expanding further into games.
- Earnings Per Share (EPS): $2.97 versus $3.16 expected according to analysts’ Refinitiv survey
- He won: Refinitiv. As per the forecast of $7.34 billion versus $7.32 billion
- Paid Global Net Subscribers: 1.54 million vs 1.75 million expected according to FactSet
Analysts didn’t expect a huge quarter to add customers, as they expect 1.75 million users, according to FactSet. The company said it added 1.54 million users to close the quarter with more than 209 million paid subscriptions.
“COVID has created a tangle in our membership growth (high growth in 2020, slow growth this year), which is working its way out. We continue to focus on improving our service to our members and bringing the best stories from around the world,” the company wrote in a letter to investors.
Netflix said its revenue growth in the quarter came from an 11% increase in average paid streaming subscriptions and an 8% increase in average revenue per subscription.
Netflix had most of its eyes on what to expect in the third quarter. According to data from FactSet, Netflix said it expects 3.5 million net additions, while investors expect 4.87 million net subscriber additions in the third quarter. Much of the optimism comes from Netflix’s upcoming content, a significant portion of which is pushed back into the second half of this year and the next.
In the first half of this year, Netflix said it spent $8 billion in cash on content and expects its full-year content depreciation to be about $12 billion.
“Had we lived up to our expectations, we would have added more than 54 million net payouts over the past 24 months or 27 million year-on-year in that period, which is the annualized pre-COVIDसीओnet additions. percentage,” the company said.
The company confirmed that it is also foraying into the gaming sector. Netflix said it sees games as a new category of content, comparing it in detail to original movies, animation and unscripted television.
The company said that the potential games will be included in Netflix subscriptions at no additional cost. Initially the focus will be on mobile games.
“We are more excited than ever about our range of films and TV series and look forward to a long road to investment and growth across all of our existing content categories, but as we continue to see a significant improvement in our commitment to original programming, decade, we believe is right. Finding mature is right,” the company said. Learn more about how our members rate games.”
The company recently hired video game manager Mike Vardow from the Facebook social networking site, where he served as vice president of augmented reality and virtual reality content as the company makes a deeper push toward gaming.
Netflix has also been under pressure from tough comparisons throughout the year as consumers were in the midst of the Covid-19 pandemic last year and spent most of their time online and in need of entertainment.
Netflix said participation per household was lower in the second quarter than last year, but still up 17% compared to the second quarter of 2019.
The company said that “the pandemic has caused extraordinary volatility in our growth and distorted year-over-year comparisons in the form of acquisitions and per capita engagement in the early months of COVID.”
This story is developing. Update for updates.
Subscribe to CNBC on YouTube.