Netflix stemmed its subscriber losses in the third quarter, as popular programmes including the fourth season of Stranger Things and Dahmer — Monster: The Jeffrey Dahmer Story helped it add 2.4mn members.
Netflix ended the third quarter with 223mn subscribers, up 2.6 per cent from a year earlier, and expects to reach 227mn by the end of the current quarter, according to its earnings release on Tuesday.
Netflix shares jumped nearly 15 per cent in after-hours trading.
But the streaming pioneer, which shocked investors with its revelation in April that it had lost subscribers, reported a slight decline in net income — from $1.44bn a year ago to $1.39bn. Earnings per share fell 2.8 per cent to $3.10, better than the $2.10 a share Wall Street had expected.
It also warned that revenue and earnings would drop in the fourth quarter due to the effect of the strong dollar and macroeconomic weakness.
Revenue grew 6 per cent year-on-year to $7.9bn. “After a challenging first half, we believe we’re on a path to reaccelerate growth,” company officials wrote in a letter to shareholders.
Netflix will begin rolling out an advertising-supported service next month, a step it hopes will bolster revenues as subscriber growth slows in North America and other big markets.
As a result, Netflix said it would stop providing guidance to investors on its number of new subscribers — a big shift for a company whose share price rocketed for years based on its membership growth. The new ad service would mean that subscriptions will be “just one component of our revenue growth”, the letter said.