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Netflix earnings beat sends stock moving higher

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Yahoo Finance reporter Allie Canal breaks down Netflix's second-quarter earnings results, which included a beat on the top line and narrower-than-expected loss of subscribers.

Video Transcript

SEANA SMITH: We need to get to some breaking news. Netflix is out with its earnings report. Shares popping here after hours. Ali Canal, what are the details?

ALEXANDRA CANAL: Hi, Seana. Yeah, shares are reacting positively due to Netflix beating those subscriber estimates. Netflix previously anticipated a loss of 2 million subscribers in Q2. That loss was a lot less intense-- 970,000 is the loss that was experienced in Q2. For revenue and EPS, that came in mixed. Revenue missing-- $7.97 billion versus the expected $8.05 billion, adjusted earnings $3.20 versus estimated $2.98 expected.

Now, Netflix's Q3 subscriber guidance of 1 million did come in below Wall Street's consensus estimate of 1.9 million, although analysts, they have admitted that the second half of the year could see potential downside risks amid that macroeconomic concerns-- inflation, foreign exchange pressures, just to name a few. Now, a few questions that I'm going to be looking out for on the earnings report-- ad-supported, why did Netflix choose Microsoft as its partner? How much will this tier cost?

And realistically, when will this roll out? Are we still on track for that Q4 timeline? Because I think investors and analysts really want some more clarity there. Also want an update on that password-sharing crackdown that it's testing overseas-- how is that working? When can we expect it to hit the US?

And finally, I'm going to want further context and analysis on the strategy behind its content and marketing spend. Netflix does plan to spend $17 billion on content alone, but it feels like some of those bigger titles need some more love on the marketing front-- so really how to finesse that area of the business considering Netflix has had four different CMOs in the last three-plus years.

So those are my top questions, but, obviously, a lot more to discuss here. But right now, investors are certainly rewarding Netflix for that beat on subscribers in Q2. Seana.

SEANA SMITH: All right, Ali. Thanks so much. Again, shares popping here after hours. We're going to be discussing a little bit more about these earnings next block with Santosh Rao.