Netflix Profits Surge in Q3 Despite Slowing US Subscriber Growth
Netflix beats earnings expectations with $1.47 per share, but struggles with domestic subscriber growth following recent price hikes.
Netflix reports strong Q3 profits that exceed analyst expectations, driving its stock up 7.6% in after-hours trading. The streaming giant earns $1.47 per share on $5.24 billion in revenue, easily beating the expected $1.05 per share. These impressive financial results highlight the company's continued ability to generate significant cash from its massive global audience of over 158 million members.
Despite the financial win, subscriber growth presents a mixed picture for the streaming giant. International net additions reach 6.3 million, slightly beating forecasts, but domestic growth falls short. Netflix adds only 500,000 US subscribers, missing an 800,000 target and bringing the yearly domestic total to just 2.1 million compared to 4.1 million during the same period last year.
The company blames this US slowdown on higher churn rates following earlier price hikes, though it notes that average revenue per user climbs 16.5% domestically. Looking ahead, Netflix lowers its full-year subscriber forecast to 26.7 million net adds and acknowledges looming threats from new streaming competitors. Analysts warn that disappointing growth before this new competition even launches is a troubling sign for the platform's future.