Netflix Erupts on Massive Subscriber Growth

Turns out, not that many people are going to resort to piracy

BREAKING NEWS

After the strong year Netflix had—the OG streaming company had a lot to prove in their most recent earnings report. To the market’s amazement, Netflix stepped up to the plate and smashed every expectation. Their stock is pushing double-digit growth in early trading. Let’s break it down: 

WHAT HAPPENED

The main news is subscriber growth. Netflix nearly doubled the number of subscribers they added to the platform year-over-year. Netflix hit 13.1 million new customers—which is a level of growth only beaten by the initial stages of the COVID pandemic in early 2020. The password crackdown is working, and it turns out people are sticking around. 

IMPERFECT EARNINGS

This subscriber beat helped Netflix smash revenue expectations—driving $8.8 billion in revenue for the quarter. However, since Netflix is relying on more international growth to continue scaling, they’re finally running into a little foreign exchange pressure thanks to the strength of the U.S. Dollar. This pushed Netflix’s EPS down to $2.11, which just barely missed internal expectations of $2.15. The Street was expecting a big beat here—but the miss is not weighing on Netflix’s valuation. 

WHY IT MATTERS

Netflix has established themselves as the irrefutable winner of the writer’s and actor’s strikes of 2023. They saved a ton of costs and grew their subscriber numbers on the back of cheaper reality shows and a massive back catalog of content. Now, they’re using that strength to break into live events with their WWE Raw deal. This is just the beginning as Netflix fully establishes their dominance in the streaming business. The market loves this show of strength and Netflix stock gained around 10% in early trading.