Netflix stock greatly improved during the coronavirus outbreak. However, as more coronavirus vaccines got approved for mass use, NFLX stock began to retract.
Netflix Inc (NASDAQ: NFLX) stock experienced a bump of around 0.6% during the extended trading session to trade around $534.25 but now in the pre-market, it is slightly down, trading at $529.90. Netflix, the streaming and entertainment giant, reported mixed Q2 2021 earnings yesterday. According to the earnings report, Netflix recorded a revenue of $7.34 billion during Q2 versus $7.32 billion expected by analysts according to Refinitiv.
On the side of earnings per share, Netflix reported $2.97 against $3.16 expected by analysts according to a study by Refinitiv. However, despite not meeting the expectations in earnings per share, the company reported 1.54 million in global paid net subscribers against an expectation of 1.19 million.
The company noted that the Covid disruptions have significantly impacted the second-quarter earnings. Furthermore, the number of paid subscribers has reduced this year in comparison to last year during the beginning of the pandemic.
“COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through. We continue to focus on improving our service for our members and bringing them the best stories from around the world,” the company said in a letter to investors.
During the last three months of the first half of 2021, Netflix said the revenue growth was attributed to an 11% increase in average paid streaming memberships. Additionally, the company also attributed the revenue growth to an 8% growth in average revenue per membership.
Netflix Stock and Company’s Q2 Results
Netflix stock greatly improved during the coronavirus outbreak. However, as more coronavirus vaccines got approved for mass use, NFLX stock began to retract. According to market analytics provided by MarketWatch, NFLX shares have added approximately 8.36% in the past year through Tuesday. However, they have dropped approximately 1.79%, and 3.37% in the past seven months and three months respectively.
In a bid to revamp its stock market, Netflix noted that it is eyeing the video gaming industry to complement its streaming services. “We view gaming as another new content category for us, similar to our expansion into original films, animation, and unscripted TV,” the company said in its quarterly letter to shareholders.
Forward, Netflix said it expects 3.5 million net adds, which was a notable drop as its investors had expected the company to record 5.46 million net subscriber additions during the third quarter, according to analytics provided by Street Account.
“If we achieve our forecast, we will have added more than 54m paid net adds over the past 24 months or 27m on an annualized basis over that time period, which is consistent with our pre-COVID annual rate of net additions,” the company said.
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