What's going on with Netflix and how is it impacting ASX 200 tech shares today?

Netflix shares are soaring in after-hours trading.

| More on:
A couple stares at the tv in shock, one holding the remote up ready to press.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Key points

  • Netflix shares have popped in after-hours trading
  • The streaming giant posted better-than-expected quarterly results
  • This has supported a positive lead for ASX tech shares today

The Netflix Inc (NASDAQ: NFLX) share price is surging in after-hours trading after the streaming giant delivered better-than-expected quarterly results.

Netflix shares are currently lighting up 14% after hours after closing at US$240.86 overnight. 

Netflix has had a torrid run so far in 2022 as growth has slowed and subscriber numbers have ground to a halt. 

As it stands, Netflix shares have crumbled 60% this year to trade at levels not seen since 2018.

But Netflix's fortunes could be turning. The company has reversed its subscriber losses in the most recent quarter thanks to some big programming wins. 

Netflix hits it out of the park in Q3 2022

For the third quarter of 2022, Netflix added 2.41 million net subscribers, well ahead of the company's guidance of 1 million.

This was underpinned by some big hits across TV and film during the quarter, including the likes of Stranger Things, Monster: The Jeffrey Dahmer Story, The Gray Man, and Purple Hearts.

The fourth season of Stranger Things generated 1.35 billion hours viewed, making it Netflix's biggest-ever season of an English series. 

Meanwhile, the Jeffrey Dahmer true crime limited series generated 824 million hours viewed in the first 28 days of its release. This makes it Netflix's second-largest English series.

This helped the streaming giant to deliver third-quarter revenue of US$7.93 billion. That's up 5.9% year on year and ahead of guidance of 5%.

Two major initiatives underway at Netflix are a crackdown on password sharing and a new, lower-priced, ad-supported subscription tier.

Coincidentally, this morning, I received an email from Netflix informing me of a new feature called 'Profile Transfer'. The idea here is to make life easy for borrowers to transfer their Netflix profile to their own account, carrying across recommendations, viewing history, watchlists, and the like.

The company will also launch its budget-friendly, ad-supported subscription plan in 12 countries next month, including Australia.

For $6.99 per month – four dollars less than the cheapest plan currently on offer – users will be shown an average of four to five minutes of unskippable ads per hour of viewing.

What does this mean for ASX 200 tech shares?

Netflix's better-than-expected results have boosted Nasdaq futures, which are up 1.5% according to Business Insider.

Combined with all three US benchmarks finishing in the green overnight, this has provided a positive lead for the S&P/ASX 200 Index (ASX: XJO) and ASX tech shares today.

At the time of writing, the ASX 200 has climbed 0.6% to 6,820 points.

Meanwhile, HUB24 Ltd (ASX: HUB) is currently the best-performing ASX 200 tech share. It's jumped 3.5% to $26.09.

Other top risers include BrainChip Holdings Ltd (ASX: BRN) and Altium Limited (ASX: ALU). These ASX 200 tech shares are up 2.2% and 1.7%, respectively, at the time of writing.

Motley Fool contributor Cathryn Goh has positions in Altium. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Altium, Hub24 Ltd, and Netflix. The Motley Fool Australia has positions in and has recommended Hub24 Ltd. The Motley Fool Australia has recommended Netflix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Consumer Staples & Discretionary Shares

A businessman sits on a chair looking at a pile of chairs stacked up to the ceiling of a white empty room.
Share Market News

Here's how the ASX 200 market sectors stacked up last week

Consumer discretionary shares led the ASX 200 market sectors last week with a 0.36% gain.

Read more »

Man holding out Australian dollar notes, symbolising dividends.
Consumer Staples & Discretionary Shares

How much could a $10,000 investment in Woolworths shares become in one year?

Let's see what analysts are predicting for the supermarket giant's shares.

Read more »

A photo of a young couple who are purchasing fruits and vegetables at a market shop.
Consumer Staples & Discretionary Shares

Buying Coles shares? Here are key metrics you'll want to know

Grab a coffee and join me in this fun financial analysis exercise for Coles.

Read more »

a cute young girl with curly hair sips a glass of milk through a straw with a smile on her face.
Consumer Staples & Discretionary Shares

Guess which A2 Milk rival's shares just rocketed 21% on US news!

Up 65% in 2024, A2 Milk shares remain the better performer, but this rival is making up ground today.

Read more »

Happy smiling young woman drinking red wine while standing among the grapevines in a vineyard.
Consumer Staples & Discretionary Shares

What is boosting the Treasury Wine share price on Thursday?

This wine giant has some news that investors appear to be saying cheers to.

Read more »

a man inspects a capsicum while holding an eco-friendly green string bag in a supermarket produce aisle.
Consumer Staples & Discretionary Shares

Are Woolworths shares a bargain after falling 20%?

Is it time to put Woolworths stock in our share shopping basket?

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Consumer Staples & Discretionary Shares

Guess which beaten-up ASX 200 stock is being bought up by this multi-billion-dollar fundie

At least 3 fund managers have bought stakes in this ASX 200 consumer discretionary share this year.

Read more »

Young people shopping in mall and having fun.
Consumer Staples & Discretionary Shares

6 ASX retail shares to buy this month

Bell Potter has given its verdict on these retailers.

Read more »