Netflix Investor Relations: Cowboy Bebop and Red Notice to Lift Fourth Quarter

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Ryan Reynolds, Dwayne Johnson and Gal Gadot on Netflix Red Notice. Frank Masi / NETFLIX © 2021

As the streaming wars continue to escalate, each company’s quarterly earnings report comes under the microscope as if it were an index of National treasure. On Tuesday, Netflix reported its third quarter results, which marked a solid rebound from a disappointing first half of 2021. The question now is whether the market-leading streaming service can end the year on a high note? Before we jump into the answer, a review of the finer details of Q3 is in order.

Netflix’s third-quarter earnings per share jumped 83% year-on-year to $ 3.19, far beating analyst estimates. Revenue matches both Netflix’s forecast and analysts’ forecast with a good jump of 16% to $ 7.5 billion. Net paid streaming additions globally reached 4.4 million, double the level of a year ago and triple the first quarter additions. New customers also exceeded Netflix’s forecast of 3.5 million additions in the quarter, but note that new UCAN subscribers (US and Canada) were modest at 700,000. Further reading: Growth Global continues to do well overall, but Netflix has added less than one million UCAN subscriptions in the past 12 months. Still, the third quarter was a stabilizing result after the ripple effect of COVID in 2020 slowed growth in the first half of 2021.

“The pandemic and ‘stay-at-home’ behavior of retail content subscribers has fueled abnormal growth in 2020 for providers like Netflix,” Dan Raju, CEO of Tradier, told Observer. “The first two quarters of 2021 could be interpreted as lackluster, but the reality is that this is an adjustment in the direction of normality.”

While national growth has largely plateaued, setting a cap of around 75 million subscribers in the UCAN market for Netflix, the fourth quarter is still expected to be a winner overall. The streamer is forecasting a staggering 8.5 million net additions in the fourth quarter, which would match last year. The biggest success of the Netflix launch Squid game, which, according to Netflix, saw 142 million member accounts watching at least two minutes in its first 28 days of uptime, led to a beefy content roster by year-end. But even if Netflix hit its forecast, it would still lead to the lowest annual subscriber gains over the past five years.

For what it’s worth, the Vacation Hallway is typically Netflix’s biggest neighborhood, as evidenced by sub-additions over the past few years:

Q4 2020 (8.5 million)
Q4 2019 (8.76 million)
Q4 2019 (8.8 million)
Q4 2017 (8.3 million)

“The record success of Squid game, along with the return of other popular series, will likely fuel growth and subscriber engagement through the end of the year, further solidifying its place at the top of the video streaming industry, ”said Jesse Cohen , Senior Analyst at Investing.com, at Observer. At the same time, Cohen warns that after Netflix shares jumped 16% in the last quarter, the share price could take a “break” in the fourth quarter.

Still, Netflix is ​​poised to deliver its quarter-biggest content this year. In addition to hits from September and October such as Squid game and You Season 3, Q4 set to benefit from the release of the action blockbuster of Dwayne Johnson, Ryan Reynolds and Gal Gadot Red Notice (November 12), the highly anticipated live-action adaptation of the beloved animated series Cowboy Bebop (November 19), the star-studded dramatic comedy Do not seek (December 10) titled by Leonardo DiCaprio and Jennifer Lawrence, and season 2 of The witcher (December 17). The fourth quarter plans hint at a larger narrative for Netflix.

“This shows that Netflix’s growth is constant before COVID, during COVID and after COVID,” Anthony Denier, CEO of Webull, told Observer. “I expect to see more growth globally and in the Asia-Pacific region in particular, as this is the biggest contributor to membership growth for the second consecutive quarter.”

One thing to watch out for, however, is how much Netflix’s impressive fourth quarter forecast is reflected in similar growth for other streaming services. As Netflix tries to maintain its grip as the primary SVOD platform, competitors like Disney +, Amazon Prime Video, and HBO Max could gain strength.

Netflix seeks to maintain momentum with huge list of year-end content


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