Netflix stock surged by nearly 35% in after-hours trading, as the streaming company reported better-than-expected third-quarter performances in regard to subscribers and revenue.
Buoyed by some of its biggest programming hits ever over the summer — including the fourth season of Stranger Things and the Ryan Murphy-produced serial-killer miniseries biopic Monster: The Jeffrey Dahmer Story — Netflix returned to global customer growth, beating forecasts soundly with 2.4 million subscriber additions.
Netflix had forecasted just over 1 million paid user additions.
In the saturated U.S. and Canadian region, Netflix didn't lose customers for the first time in several quarters, actually adding around 100,000 of them.
The company predicted customer additions of 4.5 million for Q4, but said it will be the last time it issues forward-looking subscriber guidance as it focuses on revenue growth as a primary data point in the future.
Revenue expanded by nearly 6% to $7.92 billion in Q3 — nothing like the 16% expansion experienced in the year-ago frame, but again, better than the anticipated $7.85 billion.
For the fourth quarter, Netflix is projecting revenue expansion of only around 1%. Netflix said the historically strong U.S. Dollar will result in a foreign exchange rate impact of between $800 million - $1 billion on revenue for the full 2022.
Still, the outcome was starkly happier for Netflix when juxtaposed to "Black Tuesday" six months ago, when a sudden and surprising dip into negative customer growth territory sent Netflix stock tumbling like never before.
Notably, Netflix's "comeback" arrived even before key changes made in the aftermath of that Q1 crash — the launch of a cheaper ad-supported tier and the crackdown on password-sharing — made it to market.
And revenue expansion came in at slightly over a third of what it was a year ago, decelerating further beyond Q2's 8.6% growth.
But the emergence of the new ad model, hoisted in just six months, combined with rebounding subscriber growth has clearly restored investor confidence in Netflix. ▪️
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
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