Netflix Posts Mixed Q2 Results Announces Push Into Video Gaming

Netflix reported 1.54 million global paid net subscriber additions, slightly lower than the 1.75 million adds that analysts expected, per Refinitiv data obtained by CNBC. The company’s $2.97 earnings per share were also lower than analysts’ expectations of $3.16. That said, the company’s revenue slightly exceeded analysts’ expectations: Netflix reported $7.34 billion in revenue, while analysts expected only $7.32 billion in revenue, per Refinitiv. The company’s stock was down 1.23 percent in after-hours trading at press time. Tuesday’s earnings report marked a considerable slowdown in subscriber gains compared to Netflix’s Q1 2021 earnings report in April, when the company announced that it had added 3.98 million new subscribers during the fiscal quarter. Netflix also sharply missed its own forecast for subscriber gains during the first fiscal quarter of the year. Netflix blamed the coronavirus pandemic for its choppy growth but noted that the company’s engagement per household and retention in Q2 2021 were stronger than the numbers from the company’s pre-COVID earnings in Q2 2019. The company anticipates 3.5 million net subscriber adds in Q3 2021.

Netflix did not reveal any new titles or release dates for upcoming films or television shows in its shareholder letter but touted the viewership of some of its recent releases. Netflix stated that fantasy series “Shadow and Bone” was viewed by over 55 million households within 28 days of release, while “Sweet Tooth” was viewed by 60 million member households within four weeks of release. On the film side, Netflix stated that Zack Snyder’s “Army of the Dead” was viewed by 75 million households within 28 days of release, while the Kevin Hart-led “Fatherhood” drew an estimated 74 million households within 28 days of release. Netflix also announced that it will continue working in the video gaming industry and said that customers would be able to access certain games as part of their Netflix subscriptions. “We view gaming as another new content category for us, similar to our expansion into original films, animation and unscripted TV,” Netflix said in its letter to shareholders. “Games will be included in members’ Netflix subscription at no additional cost similar to films and series. Initially, we’ll be primarily focused on games for mobile devices.” The company did not provide additional details, including a timetable, on the kinds of upcoming video games that could be included in its customers’ subscriptions. Netflix has some past experience in the gaming industry; the company’s “Black Mirror: Bandersnatch” interactive film released in 2018 and Netflix has also been involved in several “Stranger Things” games.