Netflix Returns to Subscriber Growth, Imminent Ad-Supported Tier Launch Should Boost Q4

Netflix rebounded during the third quarter, adding 2.4 million net subscribers after two consecutive quarters of net losses to start 2022. Management expects subscriber growth to continue in the fourth quarter, projecting 4.5 million net additions, ahead of our previous projection but well behind the 8.3 million added in the final quarter of 2021. The fourth quarter should benefit from the launch of the ad-supported offering in 12 key markets. The firm’s other revenue-boosting initiative, efforts to crack password sharing, will be rolled out in the first half of 2023.