What you need to know
- Netflix's positive Q2 was attributed to its password-sharing crackdown, which accounted for more than 80% of its earned revenue.
- The company reported gaining 5.9 million subscribers in the quarter, bringing its global subscriptions to 238.4 million.
- Netflix earned $8.2 billion in Q2 with an operating profit of $1.8 billion.
Netflix announced its financial earnings for Q2 2023, and it appears as though the streaming giant has discovered some newfound success. The service states that its controversial password-sharing crackdown strategy has accounted for "more than" 80% of its revenue this past quarter. Netflix has gained 5.9 million subscribers in the second quarter, pushing its global streaming subscriptions to 238.4 million.
The report shows that the streaming service has experienced an 8% year-over-year boost in subscribers this past quarter. Netflix states it has observed an increasing amount of sign-ups across the many regions its password-sharing crackdown has taken place in over cancellations.
Overall, Netflix's Q2 2023 earned revenue sits at $8.2 billion, with an operating profit of $1.8 billion. The company states these numbers were "generally in-line with our forecasts."
The numbers show that Netflix's revenue for the second quarter has experienced a 2.7% year-over-year growth, as well.
Netflix anticipates that it will continue to grow (revenue-wise) as we move through the second half of 2023 as more areas adopt its "paid sharing" strategy and join its ad-supported plan. Additionally, the service has an operating margin target of 18% to 20% by this year's end.
Lastly, Netflix states projections anticipate $8.5 billion in revenue for Q3.
The "paid sharing" Netflix referenced quite heavily in its Q2 report is the decisions it made to enforce a platform free from password sharing. The company has made it so those looking to share a singular Netflix account must pay an additional $7.99 per person they wish to tack on.
Moreover, if users would like to dodge the unfortunate price uptick, those along for the ride will have to purchase their own subscription and transfer their Netflix data, as well.
The other key contributor to Netflix's positive Q2 performance was its ad-supported tier. The company rolled this out in the U.S. for $7 a month back in October 2022. While its competitors have already opted for a move like this, Netflix offered its entertainment at 720p but with a little less content available.
Although Netflix has seemingly enjoyed the positive effects of its ad-supported tier so much that it has recently ditched its "Basic" plan in the U.S. and UK, forcing people to grab the ad-filled one instead.
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Nickolas is always excited about tech and getting his hands on it. Writing for him can vary from delivering the latest tech story to scribbling in his journal. When Nickolas isn't hitting a story, he's often grinding away at a game or chilling with a book in his hand.