Netflix Profits Soar, But Why Are Investors Disappointed?

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Netflix posted nearly 50% profit growth in the second quarter and strengthened its position with more than 300 million streaming subscribers, drawing investor attention.


Netflix reported April-June performance that beat Wall Street expectations with net profit jumping 46% to $3.1 billion (€2.7 billion), while revenue rose 16% to $11.08 billion (€9.5 billion).


The firm also raised its annual revenue forecast to between $44.8 billion (€38.5 billion) and $45.2 billion (€38.8 billion), compared with a previous forecast of between $43.5 billion (€37.4 billion) and $44.5 billion (€38.2 billion).


Netflix CEO Ted Sarandos expressed confidence in a strong performance in the second half of the year, supported by a weaker US dollar, positive member growth and stable advertising sales.


Investing.com analyst Thomas Monteiro also said investors were disappointed that the company did not raise its full-year revenue and profit margin forecasts, despite accelerating growth momentum.


Netflix shares fell 1.8% in after-hours trading, reflecting higher investor expectations, but only a small decline after a 43% rise this year since the launch of its low-cost plan in the second half of 2022.


Netflix no longer reports quarterly subscriber counts, but revenue growth suggests the number will exceed 302 million by the end of 2024.

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