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Netflix (NFLX) reported its second quarter 2021 results after the closing bell on Tuesday, beating analysts’ expectations for new subscribers in the quarter but missing the target of the estimates for the third quarter of 2021.
Here are the report’s biggest numbers compared to what analysts expected from the streaming giant.
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Returned: 7.34 billion dollars against 7.32 billion dollars expected
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Earnings per share: $ 2.97 vs. $ 3.14 expected
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Subscribers added: 1.54 million against 1.12 million expected
The company’s stock was flat after the announcement.
While Netflix gained more subscribers than expected in the second quarter, it fell short of those the company predicts for the third quarter. According to Netflix’s earnings report, it is expected to see 3.5 million new users in the quarter, below analysts’ expectations of 5.86 million new users.
Netflix has been a major business in the pandemic era, with the company seeing an explosion in user growth in 2020, as consumers around the world stayed indoors to stem the spread of the coronavirus . But it has resulted in a massive surge in new subscribers, leaving Netflix to face tough comparisons for 2021 and shattering expectations.
Instead, analysts looked to the next few quarters of the business, which should once again help fuel growth with the return of a number of major trade shows.
“We believe that the list of contents is improving in [Q3] (“Fear Street”, “La Casa De Papel”, several popular romcoms and unscripted series) and more in [Q4] (“Cobra Kai”, “The Witcher”, “La Casa De Papel”, several high profile films) and until 2022 (“Stranger Things”, “Ozark”, “The Crown”, “Bridgerton”, others) ” , Truist Securities’ Matthew Thornton wrote in a memo ahead of the earnings announcement.
While the subscriber forecast for the third quarter may have missed expectations, Netflix has said if it meets the forecast, it will meet its pre-COVID net additions rate.
“If we meet our forecast, we will have added more than 54 million net additions in the past 24 months or 27 million on an annualized basis over this period, which is consistent with our annual rate of net additions before COVID “the company said via the publication of the results.
Netflix is also expanding beyond its traditional streaming video offerings, seeking to market its best Disney-like shows. Look no further than the company’s new Netflix store for proof of the burgeoning effort.
Then there are reports that Netflix is leaping into the gaming category with the hiring of EA and Oculus veteran Mike Verdu who is expected to lead the company’s gaming efforts. It is clear that Netflix is looking to expand its offering, but it will take some time and likely not make a difference in the short term.
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