The video streaming pioneer company began reaping the benefits of a crackdown on password sharing and the introduction of an ad-supported product.
From January to March, Netflix posted diluted earnings of $2.88 per share, versus Wall Street’s forecast of $2.86. The company reported revenue of $8.162 million, in line with Refinitiv analyst estimates.
Looking ahead, Netflix forecasts revenue of $8.242 million and diluted earnings per share of $2.86 for the second quarter. Wall Street had forecast sales of $8.476 million and diluted earnings per share of $3.05.
Netflix is a benchmark for the streaming industry, whose growth has slowed as competition has intensified.
The company added 1.75 million subscribers in the quarter, less than analyst estimates of 2.06 million.
A year ago, Netflix lost 200,000 subscribers, its first drop in more than a decade, sending its shares reeling and resetting Wall Street expectations for the industry.
In 2022, Netflix added almost 9 million subscribers, half the 18 million the previous year.
Netflix officially began rolling out its password sharing solution in 12 countries in February, after testing “paid sharing” in Latin America.
The company has claimed that 100 million households share passwords, including about 30 million households in the United States and Canada.
According to MoffettNathanson’s estimates, if Netflix manages to convert 100% of users who share passwords, it would generate additional revenue of $4.4 billion.
With information from Reuters