Netflix surpasses subscriber targets in second quarter

Netflix announced on Thursday that it added over 8 million new subscribers in the second quarter. The surge in subscriptions was fueled by a crackdown on password-sharing and the popularity of hit shows like "Bridgerton," "Baby Reindeer," and "The Roast of Tom Brady."

Despite surpassing analysts' expectations of 5 million new subscribers, Netflix offered cautious guidance for the third quarter. The company indicated that its advertising business would not significantly contribute to revenue growth until at least 2026.

Following the earnings report, Netflix shares initially dipped but later rose by 1% in after-hours trading. The stock has climbed nearly 30% since the beginning of the year.

Netflix, a pioneer in streaming video, is confronting market saturation in the United States and plans to cease reporting new subscriber additions on a regular basis starting next year. Investors are increasingly focused on the potential growth from Netflix's relatively new advertising initiatives.

For the upcoming third quarter, Netflix predicted a slower increase in subscribers compared to the same period in 2023, when the password crackdown had just begun. Additionally, the company announced the departure of its vice president of advertising sales, Peter Naylor.