Netflix (NFLX) Q3 Results: Netflix share price zoom on strong subscriber growth

Netflix share price jumped 16% after the streaming content pioneer, posted strong third quarter numbers beating street estimates. However, Netflix stock have fallen roughly 60% this year. The reason for the fall in share price cited additional headwinds for the slowdown, including competition, password sharing, and a sluggish economy.

Netflix Q3 Results 2022 Updates

Netflix Q3 earnings: Number of subscribers - Netflix added around 2.41 subscribers in Q3. It is higher than analysts' expectation of a 1.09 million addition. Most of Netflix’s net subscriber growth during the Sep quarter came from the Asia-Pacific region. The region accounted for 1.43 million subscribers. However, the US-Canada region had the smallest growth, contributing just 100,000 net subscribers. Paying customers now stands at 223.1 million.

Netflix Q3 results: Subscriber projection for Q4 - Netflix has said it expects net adds to reach 4.5 million in the fourth quarter and said it expects revenue of $7.8 billion, largely due to currency pressures overseas.

Source: Bloomberg

Netflix Q3 earnings 2022- Net income fell nearly to $1.4 billion due to appreciation in the US dollar. Earnings per share came in at $3.10, higher than analysts' estimate EPS of $2.13. The revenue was up 5.9% year on year to $7.9 billion on strong subscriber growth.

Netflix earnings: Ad Supported Subscription Plan - Netflix said that the company is optimistic about its new advertising business. The company does not expect the new tier to add a material contribution to its fourth-quarter results. However, it foresees membership growing gradually over time. Netflix teased the addition of its new lower-priced ad-supported plan, which launches in 12 countries in November.

Netflix on password sharing: Netflix will begin to crack down on password sharing next year, opting to allow people who have been borrowing accounts to create their own. It will also allow people sharing their accounts to create sub-accounts to pay for friends or family to use their accounts.

Analysts View on Netflix Q3 Results 2022: JPMorgan believes that with the help of ads and monetization of account sharing, Netflix can generate more revenue and expand margins. JPMorgan upgraded Netflix to Overweight from Neutral and raised its price target to $330 per share from $240. Wolfe Research raised the price target to $305 from $251 per share to reflect higher medium-term subscriber and revenue forecasts. Wells Fargo remains positive on Netflix and described its strong third quarter comeback as ‘The dark days are over’.