Netflix second quarter earnings results

Netflix Earnings Report Summary 

Netflix (NFLX) reported its second-quarter earnings report on Fridays causing shares to plummet. Shares of Netflix fell 10% to $474 in after-hours compared to the $527.39 it closed in regular trading. The streaming giant’s shares are up 46% for the year.

Revenues generated for the second quarter was $6.15 billion, with a year-over-year increase of $25%. It beat Wall Street’s consensus estimate of nearly $6.05 billion. Profits were also doubled compared to the same period from a year ago, to $720 million or $1.59 per share. The company may have missed analysts’ expectations on earnings per share but still beat revenue expectations.

There was also the news of Netflix’s chief content officer Ted Sarandos being named co-chief executive of the company alongside Reed Hastings. The company said Sarandos will maintain his position as the chief content officer while he doubles as the new co-CEO. The new executive promotions were disclosed to shareholders in a letter, along with Netflix’s second quarter earnings report.

This year has been quite beneficial and productive for Netflix due to the coronavirus pandemic and lockdown restrictions which brought in more subscribers for the movie streaming service. The company saw a sharp growth in its subscriber base, smashing its projections for the year. Netflix had 10 million global paid memberships out of the 193 million subscriptions. Within this same period a year ago, the company added only 2.7 million new subscribers.

While the Covid-19 period worked in favor of the company, Netflix failed to provide a substantial guidance for the third quarter regarding its subscriber growth. Rather, the company said “growth is slowing as consumers get through the initial shock of the Covid and social restrictions.”