The earnings per share and revenue of Netflix both dropped in the fourth quarter. However, it beat analysts’ paid subscriber count estimates. Its stock price decreased by -3.23% to $315.78 a share when it closed on January 19. However, it is expected to increase by 7.12% to $338.27 apiece in the next session.
In the fourth quarter of 2022, the earnings per share of Netflix went down by $0.12, below the $0.59 forecast. It slumped compared to the previous $3.10 data. Meanwhile, its revenue came at $7.85 billion, higher than the analysts’ expectations of $7.84 billion. The figures are lower than the prior $7.93 billion statistics.
Furthermore, the streamer’s global paid subscribers climbed to 7.66 million, beating Wall Street’s estimates of 4.57 million. This can boost their shares despite having a significant earnings miss. Also, it is the first quarter wherein its new ad-supported service was included in the earnings report.
In Q1 2023, Netflix predicts growth in their revenue by 4.00%, higher than Wall Street’s projected 3.70% rise. It mentioned that more paid memberships would lead the improvement.
In a statement, it said that they faced a tough 2022 with a bumpy start but ended it well. It wants to reaccelerate revenue growth by improving through launching paid sharing and building its ads offering.
Password-Sharing on Netflix Plans to Stop in March
Netflix executives said the company plans to convert borrowers who use accounts from separate households into paid subscribers.
Its co-CEO Greg Peters is confident that the streaming giant has solidified the features they want to implement. For instance, they allow users to pull out borrowers from their accounts. They can even pay extra for additional users or let borrowers transfer their accounts.
However, cancellation of the subscription is expected from the changes. Peters also anticipates a similar shift when Netflix raises its prices. Also, he added that users cancel out of frustration but return whenever they have a show they want to see. Besides, it will start to limit its content spending to $17.00 billion.
