Netflix Q3 earnings grow amid rise in subscribers

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Netflix posted a quick third-quarter earnings release on Tuesday thanks to a strong slate of titles, including South Korea’s dystopian survival drama “Squid Game,” which the company says has become its biggest TV show ever.

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The company ramped up production in the first half of the year, rebounding from pandemic-induced delays. It is also looking beyond movies and TV and said it plans to fund “new growth opportunities” such as video games, which are being tested in certain markets.

“It’s still very early days for this initiative and like other content categories that we’ve expanded, we plan to try out a variety of games, learn from our members, and improve our game library,” the company said. .

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And as it faces saturation in the US market, Netflix is ​​focusing on growing its international subscribers. For example, it launched a free mobile plan in Kenya in the hope that it would get more people in the country to sign up for a paid subscription.

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Overall, Netflix said its subscriber base grew 9% from a year ago to 213.6 million, exceeding its own estimates.

Netflix’s chief financial officer, Spencer Newman, said during a conference call with a Wall Street analyst that Netflix subscriber growth in Latin America moderated “slightly” after a price hike in Brazil.

“It’s a short-term slowdown in growth, but good for our business and we’re already continuing to grow through it,” he said.

Netflix earned $1.45 billion, or $3.19 per share, in the latest quarter. That’s up from $789.9 million, or $1.79 per share, a year ago.

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Revenue rose 16% to $7.48 billion from $6.44 billion.

According to a survey by FactSet, analysts were expecting earnings of $2.56 per share on average revenue of $7.48 billion.

Shares of Los Gatos, a California-based company, fell nearly 1% in after-hours trading.

Netflix also said on Tuesday that it will change how it reports its audience metrics later this year. Instead of how many accounts see its title, it will report the number of hours viewed. Netflix said it is “a slightly better indicator of the overall success of our titles and member satisfaction.”

“It also matches how external services measure TV viewing and gives due credit to rewatching,” Netflix said.

For the current quarter, Netflix said it expects to add 8.5 million net subscribers.

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The company made no mention of results in its earnings news release or surrounding the recent Dave Chappelle special, which premiered earlier this month after the third quarter ended.

Netflix said on Friday that it had fired an employee for disclosing confidential financial information it paid for Chappelle’s comedy special “The Closer,” which employees and advocacy groups called being transphobic and harmful to transgender people. was condemned as

A Netflix statement said the employee, who did not wish to be named, shared “confidential, commercially sensitive information outside the company.”

Media watchdog group GLAAD said “anti-LGBTQ content” violates Netflix’s policy of rejecting programs that incite hate or violence.

However, Netflix co-CEO Ted Sarandos told managers in an internal memo that the show does not cross the “hate line” and will remain on the streaming service.

Transgender employees and their allies are planning a walkout on Wednesday in protest.

AP Business writer Alex Veiga in Los Angeles contributed to this report.

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