Netflix benefited from several high-profile releases last quarter, including the fourth season of “Stranger Things” and “Monster: The Jeffrey Dahmer Story.”
Netflix
Netflix shares surged as much as 14% in premarket trading on Wednesday.
The video-streaming titan beat Wall Street’s forecasts for revenue and profit in the third quarter.
Netflix added 2.4 million subscribers after shedding 1.2 million in the first half of this year.
Netflix shares jumped as much as 14% in premarket trading Wednesday, after the streaming giant’s third-quarter earnings beat Wall Street’s revenue and profit forecasts.
The company added 2.4 million subscribers globally, it said in its earnings report published after the market close Tuesday. That growth in its base comes after two straight quarters of declines.
Netflix benefited from the release of several popular shows in the period, including “Monster: The Jeffrey Dahmer Story” and the fourth season of “Stranger Things.”
The online-video service posted a 5.9% increase in revenue to $7.9 billion, but higher operating costs meant its net income shrunk by 3.5% to $1.4 billion. Analysts polled by Refinitiv had expected $7.8 billion and $959 million respectively.
Netflix’s quarterly subscriber growth came in more than double its forecast of 1 million, after it lost 1.2 million members in the first half of this year. The company ended the period with 223 million subscribers, and guided towards another 4.5 million subscriber additions this quarter.
“Thank God we’re done with shrinking quarters,” co-CEO Reed Hastings said during Netflix’s earnings call on Tuesday.
The return to growth signals Netflix could be holding its own against Disney Plus, Apple TV, HBO Max, and other rivals. However, questions remain about how successful Netflix’s launch of an ad-supported content tier will be, and whether the company will manage to crack down on password sharing as planned.
Billionaire investor Bill Ackman built a billion-dollar stake in Netflix earlier this year, only to dump it three months later at a $400 million loss.
But the Pershing Square boss has explained he had doubts about the size of Netflix’s potential market, given the number of people using the service without paying. Also, he lost confidence in his estimates of the company’s future cash flows with advertising in the mix.
Netflix shares were down 60% for the year as of Tuesday’s close, representing a roughly $160 billion decline in market capitalization.