On Tuesday Netflix became the first major tech company to announce its third-quarter earnings, announcing a positive quarter that included 4.4 million net additional subscribers and better-than-expected revenue.
According to CNBC, Netflix posted revenue of $7.48 billion, which was in line with analyst estimates, although earnings per share of $3.19 were well ahead of the predicted $2.56.
“After a lighter-than-normal content slate in Q1 and Q2 due to COVID-related production delays in 2020, we are seeing the positive effects of a stronger slate in the second half of the year. In Q3, we grew revenue 16% year over year to $7.5 billion, while operating income rose 33% vs. the prior year quarter to $1.8 billion,” the company said in its investor letter. “We added 4.4m paid net adds (vs. 2.2m in Q3’20) to end the quarter with 214m paid memberships. We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet, which shows up as bigger content expense and lower operating margins sequentially.”
Netflix also forecasted that it expects to add 8.5 million subscribers in the fourth quarter of this year.
The company also confirmed that the Korean show “Squid Game” is its “biggest TV show ever.”
“The breadth of Squid Game’s popularity is truly amazing; this show has been ranked as our #1 program in 94 countries (including the U.S.),” the company said. “Like some of our other big hits, Squid Game has also pierced the cultural zeitgeist, spawning a Saturday Night Live skit and memes/clips on TikTok with more than 42 billion views. Demand for consumer products to celebrate the fandom for Squid Game is high and those items are on their way to retail now.”
Netflix also said that it will change how it reports viewing later this year, stating that they “will shift to reporting on hours viewed for our titles rather than the number of accounts that choose to watch them.”
The company also previewed its fourth-quarter slate.
“We’re eagerly anticipating the rest of our Q4 slate, which includes a great mix of popular returning English language series like The Witcher, You, Tiger King, and Cobra Kai, big returning non-English series like Sintonia, and the final chapter of La Casa de Papel (aka Money Heist), as well as exciting new movies such as the action film Red Notice (starring Dwayne Johnson, Gal Gadot and Ryan Reynolds), Don’t Look Up with an all-star cast including Leonardo DiCaprio, Jennifer Lawrence, Rob Morgan, Jonah Hill, Timothée Chalamet, Tyler Perry and Meryl Streep, as well as The Harder They Fall featuring Jonathan Majors, Zazie Beetz, LaKeith Stanfield, Regina King, and Idris Elba, Army of Thieves (the prequel to our hit movie, Army of the Dead) and The Unforgivable starring Sandra Bullock, Viola Davis, and Jon Bernthal.”
The company is currently mired in controversy over Dave Chappelle’s latest concert special, The Closer, with some employees threatening a walkout later this week over comments by the comedian about LGBTQ people. Netflix has thus far backed Chappelle and vowed to stay in business with him. The earnings release did not mention the controversy, although The Closer special debuted after the end of the third quarter.
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.