Reed Hastings: ‘Thank God We’re Done With Shrinking Quarters!’

When Netflix reported better-than-expected subscriber growth worldwide (2.4 million new subs versus 1 million projection) for the fiscal period ended Sept. 30, including a net gain of 100,000 subs in North America, nobody was happier than co-founder/co-CEO Reed Hastings.

“Thank God we’re done with shrinking quarters,” Hastings said on the earnings webcast. “It’s a big deal to go back to the positivity.”

Hastings said he hopes the service will act on the sub-growth momentum throughout the company, including content, marketing, lowering ad-supported pricing, adding that negative foreign exchange rates continued to hit the bottom line, a reality that wasn’t going away and Netflix had little control over.

“That’s a huge hit and F/X isn’t going to go away, but other than that, all the stars are lining up very well for us,” he said.

Netflix’s rollercoaster 2022 fiscal year has been marred by subscriber losses and Wall Street punishing the company’s shares in response — the stock was down $50 billion in market valuation in April.

But despite the good news, CFO Spencer Neumann said the churn rate, or subscribers not renewing service, remained high and similar to Q2 levels — but not enough to offset net sub adds.

In addition to adding 100,000 subs in North America, Netflix added 570,000 subs in Europe, Middle East and Africa, more than 310,000 net new subs in Latin America, and 1.43 million new subs in Asia-Pacific.

“We’re off to a nice start,” Neumann said.

Netflix said it would no longer provide subscriber guidance, starting with the first quarter of 2023. It does expect to add 4.5 million new subs worldwide in the current fourth quarter, ending Dec. 31.

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