Netflix investors are eagerly awaiting the company’s second-quarter earnings report, hoping that forecasted subscriber losses will be smaller than expected.
The streaming service’s executives warned in April that subscriber losses could near 2 million during the second quarter, after slipping by 200,000 during the first quarter.
Subscriber growth has been one of the biggest rallying points behind Netflix’s stock for years, but as those numbers have slowed and now retreated, shareholders have cooled on the company. In the last 12 months, shares are down more than 60%, falling from $700 per share to under $200 per share.
Here’s what analysts are expecting:
- EPS: $2.94 per share, according to Refinitiv.
- Revenue: $8.035 billion, according to Refinitiv survey.
- Global paid net subscriber additions: A loss of 2 million, according to StreetAccount estimates.
Analysts are split on whether subscriber losses will be better or worse than Netflix predicted. Some expect the company to lose as many as 4 million subscribers, while others foresee a loss of 1.5 million.
Those who expect smaller subscriber losses have pointed to the streaming service’s popular series “Stranger Things.” The fourth season of the show was released in two parts, one at the end of the second quarter and one at the beginning of the third. Some analysts expect that the split may have limited churn or even driven subscribers to sign up or return.
The company’s guidance for subscriber numbers in the third and fourth quarters will likely be more important than second-quarter figures. Another forecast of subscriber losses could send the company’s stock spiraling.
According to StreetAccouont estimates, analysts expect around 1.8 million net subscriber adds in the third quarter, as Netflix’s slate of content increases and concerns about price increases ebb.
There is also the hotly anticipated ad-supported plan, which is in the works and could lure back lapsed customers or encourage new sign-ups with a lower price point. No date has been set for the roll-out of the option, but more information about its development Tuesday could improve investor confidence in the company.
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