Netflix (NFLX:US) shares were flying on Thursday after the streaming company reported robust subscriber growth, driven by efforts to crack down on password sharing and the introduction of its new ad-supported tier.
The streaming giant said it added 8.76 million global subscribers in the quarter, exceeding the Wall Street estimate of 5.49 million. This marks the highest quarterly net addition since the second quarter of 2020 when Covid restrictions boosted subscriptions.
“We continue to focus on improving our slate, with best-in-class originals and licensed titles from
around the world,” the company said in a shareholder letter.
Earnings per share came in at $3.73 per share, surpassing the expected $3.49 per share, while revenue of $8.54 billion met analyst targets.
Total memberships were reported at 247.15 million, easily ahead of the expected 243.88 million.
Netflix said it will keep its prices at the same levels, meaning the ad tier is priced at $6.99 a month in the U.S., while the basic and premium services will see a price hike.
The basic plan now costs $11.99 (up from $9.99), and the premium plan is priced at $22.99 per month (up from $19.99), while the standard plan remains at $15.49 per month.
On the guidance front, the company said:
“We forecast Q4’23 revenue of $8.7B, up 11% year-over-year, or 12% on an F/X neutral basis. For the fourth quarter, we expect paid net additions will be similar to Q3’23 (+/- a few million).”
Netflix stock was seen trading at around $405 on Thursday.