The streaming giant upped its free cash flow forecast on savings from halted productions
Netflix $NFLX’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.”
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.”
$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
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