Netflix reported Q3 earnings after market close today. They finally added 2.4M subscribers in Q3 after losing subscribers in Q1 and Q2 this year. Their revenue did go down QoQ due to foreign exchange rates, which also impacted the YoY revenue growth. Q3 YoY revenue growth is 13% on a currency neutral basis, which is the same as Q2 YoY growth.
I believe investors didn’t have high expectations for Q3 as the intensified competition and the strong US dollar could have made Q3 a very difficult quarter. But the result turned out to be better than expected. Their CEO even said “Thank God we’re done with shrinking quarters.” LOL. NFLX 0.00 jumped 10+% after hours.
As for their strategies for future growth, they are launching an ad-supported tier for $6.99 in November and they are cracking down on password sharing to increase subscriptions. Well, these *strategies* are not groundbreaking innovations that make the world a better place. But I suppose they have to grow revenue to make shareholders happy. I hope they stay the course to produce great content and keep their user experience delightful in the process of revenue maximization. I actually don’t mind paying a bit more for their service. They can always use inflation as an excuse for price gouging. Regardless, I am really looking forward to the release of The Crown Season 5 in early November. It’s one of the greatest shows produced by Netflix.