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Netflix & earnings – Q2 numbers released

21 July 2021 By Klavs Valters

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Netflix reported their Q2 earnings after the closing bell on Tuesday.

The online streaming service reported total revenue of $7.34 billion in the previous quarter, narrowly beating analyst forecast of $7.32 billion. Earnings per share were reported below analyst forecast at $2.97 per share vs. $3.16 expected.

Global paid net subscriber additions grew by 1.54 million, above analyst prediction of 1.19 million.

”Revenue growth was driven by an 11% increase in average paid streaming memberships and 8% growth in average revenue per membership (ARM). ARM rose 4%, excluding a foreign exchange (FX) impact of 1 +$277m. Operating margin of 25.2% expanded 3 percentage points compared with the year ago quarter. EPS of $2.97 vs. $1.59 a year ago included a $63m non-cash unrealized loss from FX remeasurement on our Euro denominated debt.”

”The pandemic has created unusual choppiness in our growth and distorts year-over-year comparisons as acquisition and engagement per member household spiked in the early months of COVID. In Q2’21, our engagement per member household was, as expected, down vs. those unprecedented levels but was still up 17% compared with a more comparable Q2’19. Similarly, retention continues to be strong and better than pre-COVID Q2’19 levels, even as average revenue per membership has grown 8% over this two-year period, demonstrating how much our members value Netflix and that as we improve our service we can charge a bit more.” – Netflix said in a letter to shareholders following the announcement.

Netflix Chart (1Y)

The share price of Netflix was little changed at the end of the trading day on Tuesday, down by 0.25% at $531.05 per share. The latest numbers did not have much of an impact on the stock in the after-hours trading either – up by 0.78%. Netflix is up by around 5% in the past year.

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Sources: Netlfix, Refinitiv, TradingView

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