Netflix's third-quarter revenue was US$8.542 billion, with net profit up 20% year-on-year

In the morning news on October 19, Beijing time, American video streaming service provider Netflix today announced the company’s third quarter financial report for fiscal year 2023. The financial report shows that the company's third-quarter revenue was US$8.542 billion, an increase of 7.8% compared with US$7.926 billion in the same period last year; net profit was US$1.677 billion, an increase of 20% compared with US$1.398 billion in the same period last year; per share Earnings were $3.73, compared with $3.10 in the same period last year.

Netflix’s third-quarter revenue and earnings per share exceeded Wall Street analysts’ previous expectations. The total number of paying users of the global streaming service and the number of new paid subscribers worldwide also exceeded expectations, thus driving its after-hours stock price A sharp increase of more than 12%.

It is worth pointing out that Netflix’s global number of new paid subscribers in the third quarter hit its highest level since the second quarter of 2020 (the number of new paid subscribers worldwide in the quarter reached 10.1 million). Restrictions due to the coronavirus pandemic have forced people to stay at home.

Main results:

In the fiscal quarter ended September 30, Netflix’s net profit was US$1.677 billion, an increase of 20% compared with US$1.398 billion in the same period last year; per Share earnings were $3.73, compared with $3.10 in the same period last year, a performance that exceeded analysts' expectations. According to data provided by Yahoo Finance, 34 analysts had expected Netflix to earn $3.49 per share in the third quarter.

Netflix’s third-quarter revenue was $8.542 billion, an increase of 7.8% from $7.926 billion in the same period last year, and also slightly exceeded analyst expectations. According to data provided by Yahoo Finance, 31 analysts had expected Netflix's third-quarter revenue to reach $8.54 billion on average.

By region, Netflix’s streaming service revenue from the United States and Canada in the third quarter was US$3.735 billion, compared with US$3.602 billion in the same period last year; Netflix’s streaming service revenue from the Europe, Middle East and Africa market Streaming service revenue was US$2.693 billion, compared with US$2.376 billion in the same period last year; revenue from the Latin America region was US$1.143 billion, compared with US$1.024 billion in the same period last year; revenue from the Asia-Pacific region was US$948 million , compared with US$889 million in the same period last year.

Netflix’s third-quarter operating profit was $1.916 billion, compared with $1.533 billion in the same period last year; operating profit margin was 22.4%, compared with 19.3% in the same period last year.

Netflix’s net cash from business operating activities in the third quarter was US$1.992 billion, compared with US$557 million in the same period last year; free cash flow was US$1.888 billion, compared with the same period last year. to $472 million. Netflix now expects full-year free cash flow in fiscal 2023 to reach about $6.5 billion, a significant increase from its previous forecast of at least $5 billion.

Netflix’s cost of revenue in the third quarter was US$4.931 billion, compared with US$4.789 billion in the same period last year; marketing expenses were US$559 million, compared with US$568 million in the same period last year; technology and development expenses were US$657 million, This compares with US$663 million in the same period last year; general and administrative expenses were US$479 million, compared with US$373 million in the same period last year.

Netflix repurchased $2.5 billion worth of stock in the third quarter and expanded the size of its authorized stock repurchase program by $10 billion.

Netflix’s advertising program membership grew nearly 70% sequentially in the third quarter, and its $6.99 monthly advertising program in the U.S. continued to support growth in its advertising program.

User data:

The total number of paying subscribers of Netflix's global streaming service in the third quarter reached 247.15 million, an increase of 10.8% compared with 223.09 million in the same period last year, exceeding analysts expected. Wall Street analysts on average had expected Netflix to have a total of 243.88 million paying subscribers for its streaming service worldwide in the third quarter, according to data provided by market intelligence agency StreetAccount.

By region, the number of paying users of streaming services in the United States and Canada in the third quarter was 77.32 million, compared with 73.39 million in the same period last year; the number of paying users of streaming services in Europe, the Middle East and Africa The number of paying users of streaming services in Latin America was 43.65 million, compared with 39.94 million in the same period last year; the number of paying users of streaming services in the Asia-Pacific region was 42.43 million, This compares with 36.23 million in the same period last year.

Netflix added 8.76 million new paying subscribers to its streaming service worldwide in the third quarter, compared with 2.41 million in the same period last year, a figure that exceeded analysts’ expectations. According to data provided by market intelligence agency StreetAccount, Wall Street analysts had on average expected that Netflix would add 5.49 million new paying subscribers to its streaming service worldwide in the third quarter.

By region, Netflix added 1.75 million new paying users in the United States and Canada in the third quarter, compared with 100,000 in the same period last year; the number of new paying users in Europe, the Middle East and Africa was 1.75 million, compared with 100,000 in the same period last year. 3.95 million, compared with 570,000 in the same period last year; the number of new paying users in Latin America was 1.18 million, compared with 310,000 in the same period last year; the number of new paying users in the Asia-Pacific region was 1.88 million, compared with the same period last year to 1.43 million people.

In terms of revenue per user, Netflix’s average revenue per user from the United States and Canada in the third quarter was US$16.29, which was basically the same as US$16.37 in the same period last year. Excluding the impact of exchange rate changes, it was also year-on-year. Basically flat; average revenue per user from Europe, the Middle East and Africa was US$10.98, an increase of 2% compared with US$10.81 in the same period last year, and a year-on-year decrease of 2% excluding the impact of currency changes; from Latin America The average revenue per user of the Asia-Pacific region was US$8.85, an increase of 3% compared with US$8.58 in the same period last year. Excluding the impact of exchange rate changes, it was a year-on-year increase of 8%; the average revenue per user from the Asia-Pacific region was US$7.62, a year-on-year increase of 3%. A year-on-year decrease of 9% compared to US$8.34, excluding the impact of exchange rate changes, a year-on-year decrease of 6%.

Performance Outlook:

Netflix expects that the company’s revenue in the fourth quarter of fiscal year 2023 will reach US$8.692 billion, an increase of 10.7% compared with the same period last year. This performance outlook failed to Meet analysts' expectations; operating profit will reach US$1.160 billion, operating profit margin will reach 13.3%; net profit will reach US$956 million, and earnings per share will reach US$2.15. This outlook is in line with analysts' expectations.

According to data provided by Yahoo Finance Channel, 30 analysts had previously expected Netflix’s fourth-quarter revenue to reach US$8.77 billion on average, and 33 analysts had previously expected Netflix’s fourth-quarter earnings per share to reach US$8.77 billion on average. $2.15.

Share price changes:

On that day, Netflix’s stock price fell by $9.53 in regular trading on the Nasdaq Securities Market, closing at $346.19, a decrease of 2.68%. In subsequent after-hours trading as of 6:08 pm Eastern Time on the 18th (6:08 am on the 19th Beijing time), Netflix's stock price rose sharply by US$42.81 to US$389.00, an increase of 12.37%. Over the past 52 weeks, Netflix has had a high of $485.00 and a low of $252.09.

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