Netflix earnings top forecasts, adds 8.7 million subs, unveils price hikes

Netflix will boost the cost of its premium plans in key markets, while forecasting solid subscriber growth over the final three months of the year.

Oct 19, 2023 - 03:30

0 43

Netflix earnings top forecasts, adds 8.7 million subs, unveils price hikes

Updated at 4:33 pm EDT

Netflix (NFLX) - Get Free Report posted stronger-than-expected third quarter earnings Wednesday, while unveiling a new round of price hikes as it looks to augment crackdown on password sharing with expanded revenue prospects.

Netflix said profits for the three months ending in September were pegged at $3.73 per share, up 20.3% from the same period last year and well ahead of the Street consensus forecast of $3.49 per share.

Group revenues, Netflix said, came in at $8.54 billion, up 7.7% from last year and largely matching analysts estimates. The group added 8.76 million new subscribers over the quarter, the strongest of the year, smashing the Street forecast of just over 5.5 million.

Netflix also suggested they could add a similar amount over the final three months of the year, while lifting its free-cash flow guidance.

Netflix also said it would lift prices fir its subscription in key markets, including the U.S., the U.K. and Canada, taking the basic U.S. price to $11.99 and the premium plan to $22.99. Ad-tier pricing, Netflix said, will remain unchanged.

"Our primary financial metrics are revenue for growth and operating margin for profitability. Our goal is to accelerate revenue growth, expand operating margin and deliver growing free cash flow," Netflix said in its shareholder letter. "Nine months through the year, we are well positioned to meet these objectives in 2023."

"In addition to building engagement by creating movies and series that members will love, we’re also focused on improving monetization through a combination of paid sharing, scaling our ads business and increased sophistication around our pricing and plans," the company added.

Netflix shares were marked 11.6% higher in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $386.5 each.