Netflix released “better-than-expected” results in its second quarterly report on Tuesday, which showed the streaming service only lost about half of the two million subscribers projected initially earlier this year.
The report shows approximately 970,000 subscribers canceled their membership during the last three months. The number comes after the service took a massive hit in the first quarter when it lost 200,000 subscribers between January and March.
While Reed Hastings, the company’s CEO, praised shows like “Ozark” and “Stranger Things” for keeping the results lower than the anticipated forecast, the company still saw its biggest loss in customers since its foundation 25 years ago.
“If there was a single thing, we might say ‘Stranger Things,’” Hastings said. “But again, we are talking about losing 1 million instead of losing 2 million.”
“So our excitement is tempered by the less bad results,” he added.
The company, which currently holds about 220 million subscribers, said accelerating revenue growth is a “big challenge.” The report now projects that the company will add another million subscribers by the third quarter.
“We’ve been through hard times before,” the company said in its shareholder letter. “We’ve built this company to be flexible and adaptable, and this will be a great test for us and our high-performance culture.
Netflix on Wednesday announced a new partnership with Microsoft to implement an ad-supported subscription plan, which viewers can anticipate interrupting their programs in early 2023.
“We’ll likely start in a handful of markets where advertising spend is significant,” the company said. “Like most of our new initiatives, our intention is to roll it out, listen and learn, and iterate quickly to improve the offering.”
The company said its advertising business would likely look different in a few years than it does at launch.
Netflix has also begun implementing new ways to curb account sharing, and has already launched an “add extra member” feature in Central and South American countries.
The company said blamed the loss of subscribers last quarter on competing with other streaming services and massive account sharing. Now with the looming global recession, skyrocketing inflation, and the war in Ukraine playing a significant factor Netflix officials warned shareholders that as the US dollar strengthens and global currencies weaken, the historic pace could disrupt its global market, which makes up about 60 percent of its revenue.
So far this year, the company has laid off over 450 employees, dozens of part-time and contract workers, and lost roughly 70 percent of its stock.
However, despite its concerns, Netflix still touts its fortune.
CNBC reports as Wall Street closed on Tuesday, the company’s shares traded just above $200. Last year Netflix shares traded for approximately $700. According to a Refinitiv survey, Netflix earnings per share prices at $3.20, while the company holds $7.97 billion revenue.
“We’re confident and optimistic about the future,” the company said.