Netflix soothes Wall Street concerns with customer growth forecast
Netflix Inc on Tuesday averted its own worst-case scenario of subscriber losses, posting a nearly 1 million drop from April through June, and predicted it would return to customer growth during the third quarter.
Shares, which have fallen roughly 67% this year on concerns about the company’s long-term prospects, rose 8% in after-hours trading following the results, Reuters reports.
Investors took the forecast as a signal that Netflix could still find new subscribers despite a rocky global economy and signs of saturation in its biggest market, the United States and Canada.
The world’s largest streaming service said it plans to launch its ad-supported option next year. It also warned that the strong dollar was hitting revenue booked from subscribers abroad.
The company had said in April it expected to lose 2 million customers in the second quarter, shocking Wall Street and raising concerns that the streaming TV boom had come to an abrupt end. The losses came in at about half that, at 970,000.
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