What happened
Shares of Netflix (NFLX 1.73%) closed Thursday's trading session 8.4% lower, according to data provided by S&P Global Market Intelligence, after the streaming media leader announced mixed second-quarter 2023 results and light forward guidance.
So what
On one hand, Netflix's revenue climbed a modest 2.7% year over year (or 6% at constant currency) to $8.19 billion, falling short of analysts' consensus estimates for $8.3 billion. On the other hand, Netflix's earnings climbed 2.8% year over year to $3.29 per share, handily outpacing expectations calling for a modest decline in earnings to $2.86 per share.
Netflix management also confirmed the company added an impressive 5.9 million net new subscribers in the quarter -- more than twice the total forecasted by the company three months ago -- helped by its rollout of paid sharing to over 100 countries.
"While we've made steady progress this year, we have more work to do to reaccelerate our growth," Netflix management added in a letter to shareholders. "We remain focused on: creating a steady drumbeat of must-watch shows and movies; improving monetization; growing the enjoyment of our games; and investing to improve our service for members."
Now what
Netflix expects third-quarter 2023 revenue of $8.52 billion -- well below the $8.67 billion Wall Street was modeling -- marking a slight acceleration to 7% year-over-year growth both as reported and on a currency-neutral basis.
In the end, with Netflix stock up more than 60% year to date going into this report, it's no surprise to see traders taking some profits off the table.
