Netflix reported its second quarter earnings on Thursday, exceeding analysts' expectations and showcasing strong growth in revenue and subscriber numbers. However, the streaming giant's stock fell as much as 6% in after-hours trading due to the company's revenue outlook for the current quarter missing Wall Street estimates.

During Q2, Netflix's revenue reached $9.56 billion, reflecting a 16.8% increase compared to the same period last year. The company attributed this growth to various initiatives, including its crackdown on password sharing, introduction of an ad-supported tier, and price hikes on certain subscription plans. While analysts had anticipated revenue of $9.53 billion, Netflix fell short of these expectations.

Looking ahead, Netflix projected third quarter revenue of $9.73 billion, slightly below consensus estimates of $9.83 billion. Despite this, the company raised its full-year 2024 revenue growth projection to 14-15%, up from the previous range of 13-15%. Netflix also expects its full-year operating margins to rise to 26%, compared to the previous projection of 25%.

In terms of earnings per share (EPS), Netflix surpassed estimates with EPS of $4.88 for the quarter, exceeding the consensus expectation of $4.74. This figure also marked a significant increase compared to the $3.29 EPS reported in the year-ago period. For the third quarter, Netflix guided an EPS of $5.10, surpassing consensus calls for $4.74.

Subscriber growth remained robust during the quarter, with Netflix adding over 8 million users, driven by the popularity of key programming such as the latest season of "Bridgerton." This figure exceeded expectations of 4.7 million new subscribers and followed the 9.3 million net additions in the previous quarter. In total, the company gained 5.9 million paying users in Q2 2023.

Despite the positive earnings report, Netflix's stock experienced a decline. Prior to the release, the stock had been performing strongly, with a 30% increase since the beginning of the year.

Earlier this year, Netflix secured streaming rights for two NFL games to be aired on Christmas Day as part of a three-season deal. Furthermore, the company announced that its ad-supported tier now boasts 40 million global monthly active users, a substantial increase from the 15 million users reported in November and a 35 million-user gain compared to the previous year. With a 34% quarterly growth in ad tier memberships, Netflix expressed confidence in achieving critical ad subscriber scale for advertisers in its ad countries by 2025.

As part of its strategy to bolster the ad tier, Netflix plans to phase out its basic plan membership in the US and France, following the removal of this option in the UK and Canada last year. The basic tier was previously the platform's cheapest ad-free plan, priced at $9.99 in the US.

However, some concerns remain about Netflix's long-term subscriber growth, particularly after the company announced it will stop reporting subscriber figures and average revenue per member (ARM) next year. Despite these uncertainties, Netflix's sustained progress in various areas has led to increased revenue and a growing subscriber base.