Netflix reversed its recent subscriber losses with a summertime gain that management is hoping to build upon with the upcoming launch of a cheaper version of the video streaming service that will include ads for the first time.
The Los Gatos, California, company disclosed Tuesday that it picked up 2.4 million subscribers during the July-September period, a comeback from a loss of 1.2 million customers during the first half of the year amid stiffer competition and soaring inflation that’s squeezing household budgets.
Netflix now boasts 223 million subscribers, enabling the company to at least temporarily reclaim the mantle as the world’s largest video streaming service. Walt Disney Co. eclipsed Netflix in August when it reported its service had 221 million subscribers, a number that will be updated Nov. 8 when Disney is scheduled to report its summertime results.
“After a challenging first half, we believe we’re on a path to reaccelerate growth," Netflix predicted in a shareholder letter accompanying the third-quarter results.
The uptick in subscribers also helped Netflix earn $1.4 billion, or $3.10 per share, a 4% dip from the same time last year. Revenue climbed 6% from last year to $7.93 billion. The subscriber gains, earnings per share and revenue all topped analyst projections compiled by FactSet.
Netflix’s shares surged more than 14% after the latest numbers came out. Even so, the stock has still lost more than half its value so far this year, reflecting worries that Netflix’s best days have past.
