Netflix is scheduled to release third-quarter results after the market closes Tuesday, with investors focused on whether advertising, pricing and new content can sustain growth while membership expansion remains under scrutiny.
The company has tied that growth to membership gains, pricing and an expected doubling of advertising revenue to approximately $3 billion.
The figures follow a second quarter in which revenue rose 13% to $12. 6 billion and net income increased 9% to $3. 4 billion. Netflix said first-half viewing exceeded 97 billion hours, up 2% from a year earlier, while its U.S.
Those viewing figures have added pressure to the earnings outlook because weaker engagement could affect cancellations, advertising growth and Netflix’s ability to raise prices. The company has said engagement remains healthy and is expanding live programming, video podcasts and other formats; live content is expected to receive more than 5% of its content spending this year.
The company is also entering the results with a major internal reshuffle. Netflix announced plans to eliminate about 1,000 jobs, or roughly 6% of its workforce, its largest round of cuts to date. Chief Content Officer Bela Bajaria is leaving after about a decade with the company, and former Disney executive Peter Rice has been confirmed as her replacement.
The earnings release is expected to give investors updated figures on revenue, membership growth and advertising, as well as further evidence of how Netflix’s content and monetization strategy is performing amid competition for viewers.