Stock Price Rises in After-Hours Trading
"Q4, 'Ojingeo Game Season 2' Is Coming"
The third-quarter earnings of Netflix, the world's largest online video streaming service (OTT) company, exceeded Wall Street expectations. The number of new subscribers increased by more than 5 million, and quarterly revenue also showed a 15% growth. Currently, in after-hours trading, Netflix's stock price is recording an increase approaching 5%.
On the 17th (local time), Netflix announced after the market closed that its third-quarter subscriber count reached 282.7 million, an increase of 5.07 million compared to the previous year. During the same period, quarterly revenue recorded $9.83 billion, a 15% increase year-over-year. Earnings per share (EPS) stood at $5.40. All of these figures surpassed Wall Street estimates compiled by financial information provider LSEG (subscriber count 282.15 million, revenue $9.77 billion, EPS $5.12).
This is attributed to the continued positive impact of previously introduced measures such as password sharing crackdowns and ad-supported subscription plans. The ad-supported plan accounted for more than 50% of third-quarter subscriptions in countries where it was introduced. The company described this as a "healthy growth in paid memberships." Newly launched programs such as 'Perfect Couple' and 'No One Wants This,' as well as new seasons of 'Emily in Paris,' and anticipated titles like 'Beverly Hills Cop: Axel F' and 'Officer Blackbelt' also gained popularity among viewers.
Along with this, Netflix projected fourth-quarter revenue at $10.13 billion. For the full year next year, it forecasted between $43 billion and $44 billion. In this case, Netflix would achieve an 11-13% growth compared to this year's projection of $38.9 billion.
Netflix emphasized, "The fourth quarter has an especially strong schedule. Net paid additions will be higher than in the third quarter," highlighting that 'Squid Game Season 2,' one of the most-watched series ever, will be aired. Targeting demand for sports content, Netflix will also broadcast live boxing matches starting next month. From next year, it plans to live-stream World Wrestling Entertainment (WWE) professional wrestling matches worldwide every week.
There are expectations inside and outside Wall Street that Netflix will soon raise the price of its ad-supported subscription plan. The ad-supported plan is priced at $6.99 per month, which is relatively inexpensive compared to Netflix's other plans and competitors' ad-supported plans. Jason Bazinet, an analyst at Citibank, predicted ahead of the earnings announcement that "the company has room to increase U.S. subscription prices by 12% next year."
Netflix closed down over 2% in regular trading on the New York Stock Exchange today but is currently trading in after-hours at the high end of $720 per share, up 4.8%.
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