Netflix earned less than analysts expected in the second quarter of this year

The American company Netflix earned less than analysts expected in the second quarter of this year, which led to a sharp drop in its share prices by almost 9% to $477.59.

According to Reuters, Netflix's net profit for the April-June period amounted to $1.488 billion or $3.29 per share, compared to $1.441 billion or $3.2 per share earned during the same period last year.

According to the company, total revenue increased to $8.19 billion, up $220 million year-on-year. Nevertheless, the company's expected earnings were $2.85 per share on revenue of $8.29 billion, according to experts surveyed by FactSet.

Despite the increase in the number of Netflix subscribers by 5.9 million last quarter, the consensus forecast was for only a 1.82 million increase. It should be noted that the average revenue per subscriber decreased by 3% year-on-year. This is due to the difference in subscription costs in different countries, as in 2023 the company attracted more new customers from regions with lower subscription costs.

In order to increase revenues, Netflix is actively fighting password sharing in more than 100 countries, warning users that accounts cannot be used outside their households. These measures should provide more control and increase the company's revenue.

Competition in the world of streaming services is getting tougher, and Netflix continues to look for innovative ways to increase revenue and remain a market leader. At the same time, the company continues to focus on content development, attracting viewers with its unique productions and exclusive shows. High competition and unexpected changes in the industry can put pressure on the company, but Netflix is actively working on strategies to ensure stability and further development in the digital entertainment content market.