Netflix Reports Q2 Results, Shares Up 7%

Netflix, Inc. (NASDAQ:NFLX) shares were trading more than 7% higher pre-market following the company’s reported Q2 results, with EPS coming in at $3.20, better than the Street estimate of $2.96. Revenue was $7.97 billion, compared to the Street estimate of $8.03 billion. The company lost 0.97 million net paid subscribers, compared to the guidance of 2 million loss.

The company expects Q3 revenue of $7.84 billion and EPS of $2.14, both below the Street estimates of $8.08 billion and $2.77, respectively. Q3 revenue guidance is based on the global net paid adds of 1 million, compared to the Street estimate of 2.09 million.

While Q3 subscriber guidance was lower than the Street estimates, analysts at Wedbush believe results were better than widely feared, and the upside of one million in Q2 implies a similar upside in Q3. Most importantly, the company guided to a 2022 free cash flow of roughly $1 billion, with annual positive free cash flow going forward, and substantial free cash flow growth in 2023 vs. 2022.