Netflix shares experienced significant growth in premarket trade early Thursday, following the streaming platform’s impressive third-quarter results that exceeded Wall Street expectations.
The stock soared by 13.8% at 5:24 a.m. ET.
Netflix reported a net subscriber growth of 8.8 million, surpassing expectations and achieving its largest quarterly growth since Q2 2020. The company also projected a full-year 2023 operating margin of 20%, which is at the upper end of its previous guidance.
During the quarter, Netflix took measures to crack down on password sharing and limited the use of accounts to one household. The tech firm also introduced a new subscription option that allows users to pay less in exchange for viewing advertisements before and during films and shows.
The after-hours release of the third-quarter results surprised analysts with a forecast for similar subscriber growth in the next quarter, with a margin of error of only a few million subscribers.
Third-quarter revenue reached $8.542 billion, reflecting year-on-year growth of 7.8%. Net income increased from $1.398 billion to $1.677 billion compared to the previous year.
While Netflix shares have gained nearly 30% over the past year, they have slightly cooled from their 2021 levels due to concerns about competition in the streaming space.
Read more: Netflix stock surges as profit beats expectations, ad-tier subscriptions rise
Netflix share price.
— This article was written with contributions from CNBC’s Alex Sherman.
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