Netflix’s third-quarter results steamrolled over Wall Street’s forecasts, with its earnings of $3.73 per share beating analysts’ average projection of $3.49 a share. Despite the good numbers, Netflix is still increasing prices for several plans in the US, UK, and France.
Basic and premium plans in the US will be bumped up to $11.99 (from $9.99) and $22.99 (from $19.99) respectively in the US. Standard and ads-supported plans will remain the same price at $15.99 and $6.99.
In the UK, the basic and premium plans will cost £7.99 and £17.99, respectively, while customers in France will see the basic plan move up to €10.99 and the premium plan to €19.99.
As it suggested after its second quarter, Netflix does not expect the new ads-supported plan to be “material” to the business in 2023, but as a jab to its longstanding feud with cinemas and film festivals, the streamer quipped in its letter to shareholders, “it’s much less than the average price of a single movie ticket.”
Unsurprising savings amid the strikes
Netflix revised up its free cash flow forecast for the full year to $6.5 billion, versus a prior forecast of $5 billion. It also announced a $10 million share buyback program for its common stock. Halted productions have contributed largely to this cashflow, with the Writers Guild of America (WGA) and SAG-AFTRA strikes ultimately saving the company $1 billion in cash it otherwise would have spent on content.
While a landmark deal has been reached with the WGA, SAG actors are still striking. The streamer said it’s “committed to resolving the remaining issues as quickly as possible.”
Netflix earnings for the quarter ending September 2023, by the digits:
$8.54 billion: Netflix’s revenue, as expected by analysts
8.76 million: Number of additions to the global subscriber base, higher than the expected 5.49 million
$6.5 billion: Free cash flow estimate for 2023, revised up from its earlier $5 billion estimate
$1 billion: Lower-than-planned cash spend on content
70%: Growth in ads-supported plan membership from the 12 ads countries with...
30%: Of the total new subscribers signed up to the ad plan during the quarter
96 days and counting: How long SAG actors have been on strike