Netflix mulls launch of cheaper plan, posts strong Q2 earnings per share. Check streaming giant's global performance

Item	Value	Analyst Expectations
EPS (Earning Per Share)	$3.20	$2.93
Revenue	$8.0 Billion	$8.0 Billion
Global Paid Streaming Memberships	220.7 Million	219.6 Million

Streaming giant Netflix posted a strong $3.20 earnings per share (EPS), surpassing analysts' expectations of $2.93. The EPS is a 7.07% Year-over-year (YOY) increase in the second quarter. This comes after Netflix in the previous quarter, which is Q1-2022, had reported negative growth.

The revenue of the company saw an increase of 8.6 per cent YOY. Revenue has been one of the slowest increases in years.


Strong revenue growth in Asia Pacific countries

Revenue this quarter has been buoyed by a good response in Asia Pacific countries (APAC) markets. In the APAC region alone, revenue increased by a whopping 23 per cent. The Latin American market (LATAM) also experienced a positive response at 19% YOY, not considering any foreign exchange.

Netflix's new plan

Netflix plans to start an advertising-supported plan for its subscribers early next year in 2023. The ad-supported plan would be cheaper than the ad-free membership plan.

Global paid streaming memberships, also called global paid streaming subscribers, have risen to 220.7 million people, surpassing predictions by 5.5%. The company laid a lot of emphasis on its subscriber base as that is how it earns its maximum revenue. As per company reports, subscribers were 222 million in 190 countries in 2021. The subscriber base has got affected by competition. It has slowed drastically due to the emergence of Apple TV (AAPL) from Apple Inc., Disney+ from Walt Disney Co., Amazon Prime Video from Amazon.com, HBO Max from AT&T and numerous others.

Forecast

Netflix has predicted a growth of 12% YOY in Q3, with a slightly lower operating profit at 3%, not including the impact on currency exchange. The operating margin is expected at 20% in Q3 and around 19-20% for the year.

NYSE index showed Netflix trading 6.7% higher post the earning release in extended trading hours at 4.52 PM (New York time). The shares at NYSE have a -62.1% (minus) compared to S&P 500, which is trading at -10% (minus), as per the latest reports.

The Q3 earnings report is expected to be released on October 17 this year.