Netflix dips as revenues miss, profits and subscribers beat forecasts
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Netflix stock (NASDAQ:NFLX) dipped slightly in early postmarket action after posting a second-quarter earnings report that missed slightly on revenues (and held below-consensus revenue guidance for Q3) but topped expectations on profit and subscriptions, and the company advanced plans for its new revenue streams.
Revenues rose 2.7% to $8.187B, falling a bit short of expectations for 4% growth. Operating income, though, jumped more than 22% to $1.83B, and operating margin ticked up to 22.3%.
Net income saw fractional year-over-year growth to $1.488B.
The streamer added a net 5.89M new subscriptions, beating analyst expectations for additions of just over 2M. (The company no longer issues its own forecasts of quarterly subscriber numbers after diversifying the business into ads.)
That brought Netflix (NFLX) to a total of 238.39M global streaming paid memberships, vs. expectations for 234.5M.
Net cash from operations was $1.44B, and free cash flow jumped to $1.339B from a year-ago $13M, but was down from Q1's $2.117B.
Meanwhile, the company boosted its free cash flow forecast for 2023 to at least $5B -- up from a prior estimate of at least $3.5B, with "lower cash content spend in 2023 than we originally anticipated due to timing of production starts and the ongoing WGA and SAG-AFTRA strikes."
Netflix (NFLX) is expecting revenue growth to accelerate in the second half of the year, counting on steady growth in its ad-supported service tier as well as the "full benefits" of paid account sharing, which it says it's rolling out worldwide now.
For the third quarter, its sees revenue at $8.52B (reflecting year-over-year growth of 7.5%, slightly behind expectations for $8.68B) and operating income of $1.89B on an operating margin of 22.2%.
The company's executive video interview tied to earnings, moderated by BofA analyst Jessica Reif Ehrlich, will go live at 6 p.m. ET.
Netflix stock (NFLX) was down 3.5% in the minutes after posting its report.
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