LOS GATOS, Calif. — Netflix lost 1.3 million paid subscribers in the U.S. and Canada (UCAN) region during the second quarter of 2022, according to the company’s quarterly financial results released today.
Its total paid memberships for the UCAN region have dropped to about 73.3 million, according to information in Netflix’s letter to its shareholders. (Please see chart below.)
The company’s UCAN subscriber numbers have been trending downward over the last few months. A year ago, Netflix lost 430,000 paid subscribers in Q2 2021. Although it reported 1.2 million net subscriber additions in Q4 2021, it lost 640,000 paid subs in Q1 2022.
Netflix’s average revenue per membership (ARM) is increasing in the UCAN region, however, with the company reporting an ARM of US$15.95 in Q2 2022, a 10% increase compared to its ARM of US$14.54 in Q2 2021.
The company’s revenue for the UCAN region increased approximately 9.4% to US$3.54 billion, compared to US$3.24 billion in Q2 2021.
“In UCAN, ARM and revenue each increased 10% year over year, excluding the impact of F/X (foreign exchange). Paid net adds were -1.3m vs. -0.4m in the year ago period. Retention improved over the course of the quarter and, while churn remains slightly elevated, it is now back near pre-price change levels,” reads Netflix’s letter to its shareholders.
The company’s overall global revenue grew 8.6% year-over-year to US$7.97 billion in Q2 2022, compared to US$7.34 billion in Q2 2021.
Netflix now has 220.67 million total global subscribers, having lost 970,000 paid subs during Q2 2022. This still represents a 5.5% increase in global paid memberships compared to a year ago, according to Netflix’s shareholder letter.
“Q2 was better-than-expected on membership growth, and foreign exchange was worse-than-expected (stronger US dollar), resulting in 9% revenue growth (13% constant currency). Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content, and marketing as we’ve done for the last 25 years, and to better monetize our big audience. We’re in a position of strength given our $30 billion-plus in revenue, $6 billion in operating profit last year, growing free cash flow and a strong balance sheet,” the letter says.
For Netflix’s Q2 2022 financial results and shareholder letter, please click here.
Chart borrowed from Netflix’s letter to its shareholders.
