Netflix has raised its revenue forecast for the current fiscal year.
During the reporting period, net profit rose by 45 percent to 3.1 billion US dollars, while revenue climbed to 11 billion US dollars. Earnings per share increased by 47 percent to 7.19 US dollars, exceeding analysts' expectations.
Netflix explained that the raised outlook primarily reflects the weak dollar against other currencies, as well as healthy membership growth and positive advertising revenue. The US currency had its weakest performance in the first half of the year in 50 years, burdened by Donald Trump's trade policies, high national debt, and concerns about the independence of the US Federal Reserve. For Netflix, a weak dollar means foreign revenues are worth more on the balance sheet.
Since the beginning of the year, Netflix stock has risen by 42 percent. The company is increasingly focusing on live content, such as the weekly broadcasts of WWE Raw. The wrestling classic is part of a ten-year contract that started in January. According to Co-CEO Ted Sarandos, NFL Christmas games and boxing matches have also significantly contributed to customer retention.
Sarandos emphasized that Netflix will increasingly focus on exclusive, high-reach formats in the future, provided they are economically viable. When asked about a possible entry into additional sports rights, such as for UFC, NFL, or MLB, he pointed to the necessity of solid economic foundations.
Netflix also showed openness to collaborations with successful YouTube content creators to expand reach. "We want to work with the best creatives in the world, no matter where they come from," said Sarandos. Formats like Miss Rachel are a good example of how YouTube content could also fit Netflix.
Despite the good business development, the stock fell slightly by two percent after-hours. The company expects continued strong subscriber growth for the remainder of the year. Netflix recently stopped disclosing quarterly user numbers.
For the second half of the year, Netflix announced a strong program, including the finale of Stranger Things, Happy Gilmore 2 with Adam Sandler, and the second season of Wednesday.
