Netflix reports 45% increase in profit for Q2
July 17 (UPI) -- For its second quarter this year, Netflix reported total revenues of $11.08 billion, with an operating income of $3.8 billion and margin of 34.1%, which are way up from last year and beyond market estimates.
Netflix isn't releasing subscriber figures, choosing instead to focus on revenue. It's trying out new revenue models, including advertising.
New price increases with slow customer turnover are what likely caused the strong margins, according to the Hollywood Reporter. Earnings in the United States and Canada grew by 15%, a boost from 9% in Q1.
Forecasted revenue for Q3 is $11.5 billion in revenue, $3.6 billion in operating income, and operating margins of 31.5%.
Netflix said in May that its ad tier surpassed 94 million monthly subscribers. This tier has more than 50% of the company's new signups. It raised the price of the ad tier for the first time in January to $7.99 a month.
The company expects to double its ad revenue in 2025.
"We believe our ad tech platform is foundational to our long-term ads strategy and, over time, will enable us to offer better measurement, enhanced targeting, innovative ad formats and expanded programmatic capabilities," the company said in its quarterly shareholder letter.
The company also shared its Engagement Report, which listed what members watched so far this year. It said people watched more than 95 billion hours of Netflix, watching a wide range of genres and languages.
Netflix original shows such as Orange Is the New Black, Ozark and Money Heist all had more than 100 million hours viewed. Movies such as Red Notice, Leo and We Can Be Heroes each had more than 20 million views.
"Watchtime -- or engagement -- is our best indicator of member happiness," the company said. "When people watch more, they stick around longer and recommend Netflix to others."
Company CEO Ted Sarandos said on Netflix's quarterly earnings call: "Look, we want to be in business with the best creatives on the planet, regardless where they come from. Some of them are here in Hollywood. Others are in Korea, some are in India, and some are creators that distribute only on social media platforms, and most of them have not yet been discovered."
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