In the second quarter of this year, the number of new subscribers of Netflix, an online video service (OTT) platform in the US, decreased by 970,000. This is less than half of the forecast of 2 million. This means that customer churn was not as great as initially feared. For the first time this year, Netflix shares rose on the day of its earnings release.
1. Netflix [NFLX]
Netflix finished trading at $201.63, up 5.61% ($10.71) on the Nasdaq, which ended on the 20th. After closing the main chapter, the aftermarket, which announced the results of the second quarter of this year, increased the rate of increase. As of 7:20 a.m., it is trading at $215.92, up 13.09% ($25).
The number of new subscribers is as important as sales or profits in the quarterly performance of OTT companies. On the same day that Netflix released its second quarter earnings, the number of new subscribers decreased to 970,000. When it announced its first quarter results in April, the 2nd quarter new subscribers were expected to decrease by 2 million.
Reuters reported that it “avoided the worst-case scenario Netflix had predicted.” Netflix confirmed customer churn every time during the previous two ‘earnings seasons’ this year and pulled down its stock price. The stock price plummeted by 20% each time it reported earnings. In particular, in the first quarter of this year, released in April, the number of new subscribers decreased for the first time in 11 years since 2011.
Netflix now expects customer churn to turn into influx. Netflix announced on the same day that the number of new subscribers in the third quarter was 1 million. However, it fell short of the Wall Street forecast of 1.84 million, compiled by Refinitiv, a US financial information company.
2. IBM [IBM]
US computer company IBM closed at $130.88, down 5.25% ($7.25) on the New York Stock Exchange on the same day. Even after announcing better-than-expected earnings on Wall Street, foreign exchange losses due to the strengthening dollar were confirmed, pulling the stock price down.
Ahead of the opening of its headquarters on the same day, IBM announced its second quarter results this year, with sales of $15.54 billion and adjusted earnings per share (EPS) of $2.31, respectively. In Wall Street projections, revenue was $15.18 billion and EPS was $0.03. The published results exceeded expectations.
The problem lies in the strength of the dollar. IBM announced that it suffered a foreign exchange loss of $900 million in Q2 revenue. The loss was due to the appreciation of the dollar due to high overseas sales. IBM expects foreign exchange losses to reach $3.5 billion this year.
3. Coinbase Global [COIN]
Coinbase Global, an American cryptocurrency (virtual currency) exchange, finished trading at $65.83, up 12.2% ($7.16) on the Nasdaq on the same day. The biggest influence on Coinbase’s share price is the price of Bitcoin. As of 7:20 am, Bitcoin is trading at $23,460, up 8.51% from 24 hours ago on CoinMarketCap, a US virtual currency market capitalization information site.