Netflix lost a million subscribers in Q2–but that’s a million fewer than expected

Surprise: Netflix’s second-quarter earnings call was…not as bad as expected.

After its disastrous first quarter saw it dropping 200,000 subscribers—its first loss since 2011—Netflix predicted it would lose a further 2 million in Q2.

But it didn’t. Instead, it lost 970,000, bringing it down to a total of about 220.7 million globally.

Why the slowdown in subscriber loss? CEO Reed Hastings was pretty frank: “If there was a single thing, we might say Stranger Things,” he said.

Arguably Netflix’s single most successful original, 80s monster mash Stranger Things debuted most of its fourth season May 27, with the season’s last two lengthy episodes dropping July 1. The series has generated more than 1.3 billion hours of watch time since it premiered in 2016, Netflix said.

To be clear, Netflix losing subscribers is still not great. The slimmer-than-expected loss (along with a forecast that it’ll get back to adding one million subscribers next quarter) was enough, though, to actually push the company’s stock up 3% after the earnings report, compared to the 25% fall shares took after the Q1 report in April.

As for revenue, Netflix brought in $7.9 billion between April and June, an 8.6% year-over-year increase from Q2 2021.

In a call with investors, Hastings said the quarter overall brought “less bad results,” but “it’s tough losing one million subscribers and calling it a success.”

Netflix’s revenue for the quarter was impacted by the $70 million it spent for severance costs over the past three months, it said. It did three rounds of layoffs following Q1 earnings, cutting 25 marketing employees in April, 150 staffers, part-timers, and contractors in May, and another 300 people last month.

CFO Spencer Neumann said Netflix is not expecting additional restructuring costs this year, so it’s likely there will be no more layoffs—at least for now.