Netflix Inc. (NFLX) reported modest earnings and revenue growth as net added subscribers surged in the last quarter amid the company's global password-sharing crackdown and the continued rollout of its new lower-priced subscription tier. The companyও's shares dipped as much as 8% in e♔xtended trading.

Robust Subscriber Growth Despite Pas🙈sword-Sharing Crackdown

Strong subscriber improvement of 5.9 million last quarter underscores Netflix's success in overcoming last year's first-ever decline in subscriptions, which slashed the company's valuation by more than half.

As of last quarter, Netflix had rolled out its 澳洲幸运5开奖号码历史查询:paid sharing plan for about 80% of its revenue base. It plans to continue to expand the coverage🐻 into the end of the year, in a bid to fu🐻rther bolster revenue.

For Netflix, consistent user growth is key to improving subscription revenues and, given its new ad-supported member option, to increasing advertiser spend. To that extent, the company eliminated its🥂 least expensive ad-free subscription plan for new users in the U.S. and the U.K.

Does Netflix Have An Edge Over Its Peers?

The streamer's mixed earnings performance—slightly behind consensus estimates on revenue but beating EPS forecasts—belies its strength relative to peers during a challenging year. Rivals including Warner Bros. Discovery Inc. (WBD) and The Walt Disney Co. (DIS) have both cut content from their streaming platforms to reduce costs as they've struggled to maintain free cash flow.

Netflix's quarterly revenue climbed by 2.7% to $8.2 billion, while net income rose 3.3% to $1.5 billion. Operating margin improved to 22% from 20% a year ago as the company has tightened expense management.

Meanwhile, Netflix's澳洲幸运5开奖号码历史查询: free cash flow for the second quarter was about 100 times the level of the year prior. Further, the company's significant library of TV shows and movies, augmented by increased U.S. interest in Netflix's international titles, may help to insulate it from the ongoing strikes by writers and actors in Hollywood.

The company's skyrocketing free cash flow—$1.3 billion this quarter compared with roughly breakeven last year—is also likely to continue to increase throughout the rest of the year as spending slows amid the strikes.

Netflix said it would increase its full-year free cash flow estimate to $5 billion from $3.5 billion. It also expects revenue of $8.5 billion in the third quarter and robust paid net additions to its subscriber base along the lines of the most recent quarter.

While Netflix shares traded lower after hours, the drop seemed modest compared with gains of about 62% year-to-date, while the Communication Services Select Sector SPDR Fund (XLC) is up about 40% over the same period. Netflix share performance since the start of the year far exceeds that of Disney and Warnerꦛ Brothers.