Netflix Inc (NASDAQ:NFLX) stock fell 8.86% (As on July 20, 11:34:13 AM UTC-4, Source: Google Finance) after the company disappointed Wall Street with second-quarter revenue that fell short of analyst estimates. The revenue figure, along with a weaker-than-expected forecast for revenue in the third quarter, overshadowed the addition of 5.9 million new streaming customers from April through June and earnings that easily topped predictions. Its nearly 6 million subscriber additions outpaced the 1.9 million that Wall Street expected. Netflix had a total of 238.4 million subscribers worldwide as of the end of June.

NFLX in the second quarter of FY 23 has reported the adjusted earnings per share of $3.29, beating the analysts’ estimates for the adjusted earnings per share of $2.86, according to analysts surveyed by Refinitiv. The company had reported the adjusted revenue growth of 2.7 percent to $8.2 billion in the second quarter of FY 23, missing analysts’ estimates for revenue of $8.3 billion. Revenue growth was driven by a 6% increase in average paid membership, while ARM declined 3% year over year (-1% 2 F/X neutral). The year-over-year ARM decline was driven by a combination of limited price increases over the past 12 months (leading up to the launch of paid sharing), timing of paid net additions (primarily late in the quarter due to the May 23 rollout of paid sharing in Q2), and a higher mix of membership growth from lower ARM countries. Q2 operating income totaled $1.8B, up 16% vs. $1.6B in the year ago quarter. Operating margin was 22%, compared with 20% in Q2’22.

Netflix has been looking for new ways to make money as streaming competition intensifies and it nears market saturation in the United States. The company launched a cheaper tier with advertising last November, and started asking password borrowers to pay in a widespread crackdown that rolled out in May.

The company said it expected revenue growth to accelerate in the second half of the year, adding it aimed to continue to create compelling shows and movies, improve monetization, boost its video game business and make users’ experience better. The company estimated third-quarter revenue would hit $8.5 billion. Wall Street had been forecasting $8.7 billion. Netflix raised its 2023 free cash flow estimate to $5 billion, up from $3.5 billion, in part because it will spend less on content with productions shut down.