Netflix’s global membership grew by 1.75m to 232.5m, the streamer reported in mixed first quarter 2023 results on Tuesday, marking the first earnings call without Reed Hastings who has moved up to executive chairman after Greg Peters joined Ted Sarandos as co-CEO.
The new subscriber number fell below Wall Street’s expectations of 2.26m net paid adds and marked 4.9% year-on-year growth from the company’s notoriously poor earnings report a year ago. Netflix no longer offers subscriber forecasts for the upcoming quarter.
Turning to Netflix’s prime financial metrics, revenue grew 3.7% year-on-year to $8.16bn, just below Wall Street’s forecasts of $8.18bn.
Operating income came in at $1.71bn, while operating margin was 21% compared to 25% in the year-ago period, which the company attributed to the appreciation of the US dollar.
Net income was $1.3bn and diluted earnings per share were $2.88, ahead of analysts’ expectations of $2.86. Revenue forecasts for the second quarter are $8.24bn.
Netflix also said it will roll out its paid sharing initiative – a euphemism for charging members for allowing others to use their log-in details – in the US and Canada in the second quarter, having launched it in 12 countries until now.
In Latin America revenue grew 7.1% year-on-year to $1.07bn, although membership by region saw a 450,000 decline resulting in 41.25m. Netflix attributed the decline to “ongoing macroeconomic weakness” and a “pull-forward” from Q4 2022 when the region added over 1.8m paid members. Australia Pacific added 1,46m subscribers for 39.48m, while revenues increased 1.9% to $934m.
