Netflix Looks to Maintain Momentum With Massive Year-End Content Slate

Netflix is betting big on a surge of premium content to finish out the year strong.

Netflix Investor Relations Stock Earnings
Ryan Reynolds, Dwayne Johnson and Gal Gadot in Netflix’s Red Notice. Frank Masi/NETFLIX © 2021

As the streaming wars continue to heat up, each and every company’s quarterly earnings report goes under the microscope as if it were a clue in National Treasure. On Tuesday, Netflix (NFLX) announced its Q3 earnings, which marked a solid rebound from a disappointing first half of 2021. Now the question is can the market-leading streaming service close out the year on a high note? Before we jump into the answer, a review the nitty gritty details of Q3 is in order.

Netflix’s Q3 earnings per share surged 83 percent year-over-year to $3.19, far exceeding analysts’ estimates. Revenue matched both Netflix guidance and analysts’ forecast with a healthy a healthy 16 percent jump to $7.5 billion. Global streaming net paid additions rose to 4.4 million, double the number a year ago and three-times the first-quarter adds. New customers also topped Netflix guidance of 3.5 million adds in the quarter, though note that new UCAN (U.S. and Canada) subs were modest at 700,000. To drill down further: International growth continues to chug along nicely overall but Netflix has added fewer than 1 million UCAN subs in the past 12 months. Still, Q3 was a stabilizing result after the pull-forward effect of COVID in 2020 stunted growth in the first half of 2021.

“The pandemic and the ‘Stay-at-Home’ behavior of retail content subscribers fueled abnormal growth in 2020 for providers like Netflix,” Dan Raju, CEO of Tradier, told Observer. “The first two quarters of 2021 could be misunderstood as lackluster, but the reality is that it is an adjustment in the direction to normalcy.”

While domestic growth has largely plateaued, putting a ceiling of roughly 75 million subscribers on the UCAN market for Netflix, Q4 still projects to be a winner overall. The streamer is forecasting an impressive 8.5 million net adds in Q4, which would fall in line with last year. The biggest-Netflix-launch-ever success of Squid Game, which Netflix claims saw 142 million member accounts watch at least two minutes in its first 28 days of availability, leads into a beefy late-year content slate. But even if Netflix hits its projections, that would still result in the lowest annual subscriber gains in the past five years.

For what it’s worth, the holiday corridor is typically Netflix’s biggest quarter, as evidenced by sub adds over the last several years:

Q4 2020 (8.5 million)
Q4 2019 (8.76 million)
Q4 2019 (8.8 million)
Q4 2017 (8.3 million)

“The record-breaking success of Squid Game, as well as the return of other popular series, will likely fuel further subscriber growth and engagement into year-end, solidifying its spot at the top of the video streaming industry,” Jesse Cohen, senior analyst at, told Observer. At the same time, Cohen warns that after Netflix’s stock made a big 16 percent jump over the last quarter, share price may take a “breather” in Q4.

Even so, Netflix is poised deliver its most massive quarter of content this year. In addition to September and October hits such as Squid Game and You Season 3, Q4 is expected to benefit from the release of Dwayne Johnson, Ryan Reynolds and Gal Gadot’s action blockbuster Red Notice (Nov. 12), the highly-anticipated live-action adaptation of beloved anime series Cowboy Bebop (Nov. 19), the star-studded dramedy Don’t Look Up (Dec. 10) headlined by Leonardo DiCaprio and Jennifer Lawrence, and Season 2 of The Witcher (Dec. 17). The Q4 projects hint at a larger narrative for Netflix.

“This shows that Netflix growth is consistent pre-COVID, during COVID, and post-COVID,” Anthony Denier, CEO of Webull, told Observer. “I expect to see more growth globally and in the Asia-Pacific region specifically, as it was the largest contributor to membership growth for the second consecutive quarter.”

One thing to watch for, though, is just how much Netflix’s impressive Q4 forecast is mirrored by similar growth for other streaming services. As Netflix attempts to maintain its grip as the leading SVOD platform, rivals such as Disney+, Amazon (AMZN) Prime Video, and HBO Max may be gaining strength.

Netflix Looks to Maintain Momentum With Massive Year-End Content Slate