Netflix announced Thursday that its profits climbed during the second quarter, crediting new subscriber growth and recent price increases that the company said “had gone well and as expected.”
Despite the positive earnings report, the streaming company’s stock dropped sharply in after-hours trading after its financial outlook for the current quarter came in lower than what Wall Street analysts had anticipated.
During the April through June period, Netflix brought in $3.4 billion in profit, or 80 cents per share — a 9% jump compared to $3.13 billion, or 72 cents per share, during the same stretch one year ago.
The company’s revenue climbed 13% to $12.56 billion, up from $11.08 billion in the prior year’s second quarter. Analysts surveyed by FactSet had projected earnings of 79 cents per share on revenue of $12.58 billion, meaning Netflix narrowly beat those earnings expectations while falling just short on revenue.
Looking ahead to the current quarter, Netflix is projecting revenue growth of roughly 12%. That falls short of the approximately 13% growth — totaling around $13 billion — that analysts had been expecting.
The Los Gatos, California-based company said its advertising business remains a key focus, with expectations to generate around $3 billion in ad revenue this year. Netflix also noted strong viewer interest in live event programming, including the Women’s World Cup.
On the content front, Netflix said its animated film “Swapped” is tracking to become its second-most watched original animated movie ever, trailing only last year’s hugely popular “KPop Demon Hunters.”
The quarter’s top-performing titles included Harlan Coben’s “I Will Find You,” the U.K. series “Legends,” the South African production “The Polygamist,” and the K-drama “Teach You a Lesson.”
Netflix also highlighted technology upgrades, saying it is deploying large language models to help users discover content more easily. The platform is also rolling out voice search and artificial intelligence-powered natural language search tools.
Earlier this year in February, Netflix withdrew its bid to acquire Warner Bros. Discovery’s studio and streaming operations.
Netflix shares fell $5.33, or 7.2%, to $69.02 in after-hours trading following the earnings release.
