Netflix says its second-quarter profit has grown thanks to new membership sign-ups and price increases, which “had gone well and as expected.”
But the company’s shares declined sharply in after-hours trading on Thursday as the video streaming company’s forecast for the current quarter fell below Wall Street’s expectations.
Netflix earned $US3.4 billion ($A4.9 billion), or 80 cents per share, in the March-June period. That’s up nine per cent from $US3.13 billion ($A4.47 billion), or 72 cents per share, in the same period a year earlier.
Revenue grew 13 per cent to $US12.56 billion ($A17.93 billion) from $US11.08 billion ($A15.82 billion).
Analysts, on average, were expecting earnings of 79 cents per share on revenue of $US12.58 billion ($A17.96 billion), according to a poll by FactSet.
For the current quarter, Netflix is forecasting revenue growth of about 12 per cent. Analysts are expecting revenue to grow by about 13 per cent, to $US13 billion ($A19 billion).
The Los Gatos, California-based company said its advertising business remains a top priority and it expects to bring in about $US3 billion ($A4.3 billion) in ad revenue this year. Netflix added that it’s seeing strong interest in its live events offerings, including the Women’s World Cup.
Netflix said it is using large language models to improve how its subscribers find things to watch and it’s adding voice search functionality and artificial-intelligence powered natural language search.
In February, Netflix walked away from its offer to buy Warner Bros Discovery’s studio and streaming business.
Shares of Netflix fell $US5.33 ($A7.61), or 7.2 per cent, to $US69.02 ($A98.54) in after-hours trading.
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