While revenue saw improvement, totaling $8.19 billion compared to $7.97 billion a year ago, it fell short of analysts' expectations. According to FactSet, analysts had anticipated net earnings of $2.85 per share on revenue of $8.29 billion.
Looking ahead to the third quarter, Netflix executives predicted earnings of $3.52 per share on $8.52 billion in revenue. This projection was slightly lower than the average analyst estimate of $3.23 per share on sales of $8.66 billion.
Following the release of these results, Netflix's stock dipped more than 4% in after-hours trading. This downward trend came after a slight increase during the regular session.
Netflix Focuses on Ad-Supported Plan to Drive Revenue Growth
Netflix executives have revealed their plans to boost financial results by introducing cheaper, ad-supported options and cracking down on password sharing. In a recent letter to shareholders, company executives announced the expansion of paid shared accounts to more countries.
According to the letter, Netflix expects revenue growth to accelerate in the second half of 2023 due to the recent launch of paid sharing and the continuous growth of their ad-supported plan. This initiative will be expanded to almost all remaining countries.
Netflix's stock has seen a remarkable 62% increase this year, while the S&P 500 index has risen by 19%.