Netflix jumps 9% as it reports best sub growth in years, new price hikes
hapabapa
Netflix (NASDAQ:NFLX) jumped more than 9% in immediate postmarket action Wednesday after the company met and topped financial expectations with its third-quarter results, posted its best subscriber growth in years and confirmed it would raise prices.
The company added 8.76M global paid subscribers, topping consensus for adds of 6.2M, and landed at 247.15M memberships vs. expectations for 244.41M. The year-over-year growth rate hit 10.8%, stronger even than Q2's 8.0% and Q1's 4.9%.
Revenue growth also accelerated, with sales growing 7.8% to $8.542B. Operating income rose to $1.916B and operating margin stretched to 22.4%.
Earnings per share of $3.73 also beat forecasts for $3.48.
Netflix attributed the better-than-expected subscriber growth to "the rollout of paid sharing, strong, steady programming and the ongoing expansion of streaming globally."
"We now expect FY23 free cash flow of ~$6.5B, up from our prior forecast of at least $5B," the company said. "We repurchased $2.5B of shares in Q3 and increased our buyback authorization by $10B."
For the fourth quarter, it's expecting revenue of $8.7B (up 11% year-over-year) and assumes paid net adds will be "similar" to Q3, with global average revenue per member "roughly flat" year-over-year.
Meanwhile, it's moving forward with price increases in the U.S., UK and France. In the U.S., the Ads plan will remain at $6.99 per month and the Standard plan at $15.49 per month, while the Basic plan rises to $11.99/month, and the Premium plan to $22.99/month.
It notes the ads plan price of $6.99 is still "much less than the average price of a single movie ticket."
The company will post its executive earnings interview at 6 p.m. ET Wednesday.

More on Netflix

Netflix: Expecting A Strong Third Quarter, But The Stock Is Not A Buy Yet
Netflix: A Lot Of Value Is In The Cards
Netflix: Headwinds, Just How Big?
Netflix GAAP EPS of $3.73 beats by $0.23, revenue of $8.54B in-line
Netflix subscriber growth, price hike in focus during Q3 results