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Netflix Second Quarter Earnings Reports Wednesday Investors will be paying close attention to the streaming giant’s crackdown on password sharing, as well as its recently launched ad tier.
Analysts expect — and some data sources show — that Netflix’s subscriber base will get a boost from the launch of the Password Campaign in the spring.
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Here’s what analysts expect for the quarter, according to Refinitiv:
- Earnings: $2.86 per share
- he won: $8.30 billion
In May, Netflix began alerting members about its new sharing policy, which prevents scalpers from sharing accounts. Under the new policy, members can either transfer a profile to someone outside of their household so they can pay for their own account, or the account holder can pay an additional fee of $7.99 per person.
Netflix has seen its subscriber base skyrocket weeks after its launch, according to a report from Antenna. Analysts from Wells Fargo and MoffettNathanson, too Expect To see an increase in subscriber additions.
Wells Fargo raises its net addition estimate for the second quarter from 1.5 million to 2.1 million, according to a note from analyst Steven Cahall this week.
Investors will also be watching for any details Netflix provides on the recently launched ad-supported cheaper tier. Netflix introduced both a new sharing policy and ad tier last year as part of its response to its first subscriber loss in over a decade in 2022.
On Wednesday, Netflix confirmed that it has removed its ad-free “Basic” plan, making its standard plan with ads its cheapest option at $6.99 per month. The standard and premium tiers without commercials cost $15.49 and $19.99, respectively, per month.
Netflix stock soared as these initiatives were rolled out. The company’s shares have risen more than 60% this year, and reached their highest level in 52 weeks on Tuesday, amid expectations of achieving growth this quarter.
Media companies have turned more to ad-supported streaming as a way to reach profitability.
During its pitch to advertisers in May, Netflix unveiled a few details about the ad-supported tier, albeit enough to push its stock higher. The company said it has 5 million active users of the new tier, and 25% of its new customers have signed up for the tier in regions where it is available.
The impact of writers’ and actors’ strikes in Hollywood is also our top priority during earnings. As the media industry finds itself going through one of the most turbulent periods in years, actors recently joined writers in the picket line, but they’ve all but shut down Hollywood.
Netflix is ​​expected to do better than other media companies during the strike because of its deep content base, particularly from international sources.
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