While 2020 was arguably its best year ever, Netflix is struggling in 2021 as it suffers another earnings miss; but should we be concerned?
All the headlines will talk about a quarterly earnings miss for Netflix (NASDAQ: NFLX), but there was a lot more to take away from its Q2 report last night.
Not least of which was confirmation of its gaming ambitions.
But how did Netflix do?
Here’s a quick summary of Netflix’s most recent quarter:
- Earnings per share (EPS): $2.97 vs $3.16 expected.
- Revenue: $7.34 billion vs $7.32 billion expected.
- Global paid net subscriber additions: 1.54 million vs 1.19 million expected.
- Total subscribers as of Q2: 209 million.
Not bad, considering investors didn’t have the highest expectations for Netflix this quarter anyway.
And what’s more, the industry’s worst-kept secret was confirmed last night: Netflix is getting into gaming. Setting aside the massive costs this will incur for the company, it is actually quite an exciting venture. Netflix is building itself a Disney-sized collection of IP, much of which is translatable into the $130 billion gaming industry.
Due to COVID-19, Netflix’s year-over-year numbers have been choppy, with the company coming under pressure from investors to engage customers post-pandemic. Gaming may be that solution in the years to come, as the industry accelerates into new areas such as the cloud.
Subscription gaming is beginning to take off now as the likes of Microsoft and Apple launch their own similar services. Netflix, though not as rich or powerful, does command some considerable loyalty from fans.
Regardless of some missed earnings, Netflix is not standing still, but adapting to the demands of the times. Investing is a long-term game, and there will be stormy seas ahead for Netflix, but that doesn’t mean it won’t remain at the top for years to come.
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