Netflix, the online streaming service (OTT) company, saw its shares plummet by more than 8% despite reporting second-quarter earnings that met market expectations.

Netflix announced in a regulatory filing on July 16 (local time) that its second-quarter revenue reached 12.56 billion dollars (approximately 18.6 trillion won), a 13.4% increase compared to the same period last year.

This figure is slightly below the market consensus of 12.59 billion dollars compiled by the London Stock Exchange Group (LSEG).

Netflix attributed the rise in second-quarter revenue to an increase in subscribers, subscription fee hikes, and the expansion of advertising revenue.

By region, North America generated the highest revenue at 5.4 billion dollars, followed by Europe, the Middle East, and Africa (EMEA) at 4 billion dollars, Latin America at 1.6 billion dollars, and Asia-Pacific (APAC) at 1.5 billion dollars.

Earnings per share (EPS) stood at 80 cents, largely in line with the Wall Street consensus of 79 cents.

The EPS was significantly lower than the 1.23 dollars recorded in the previous quarter, as the first-quarter results included a 2.8 billion dollar termination fee received after a failed merger and acquisition (M&A) deal with Warner Bros. Discovery.

In its shareholder letter and engagement report, Netflix stated that it recorded 97 billion total viewing hours in the first half of the year, even during the Winter Olympics and the World Cup, with a growth rate of 2%, which is 0.5 percentage points (p) higher than the same period last year.

The company explained that Harlan Coben's "I Will Find You" recorded 87 million views, making it the most-watched new original series this year, and that "Swapped" is expected to become the second most-watched original animated series of all time.

Notably, Netflix highlighted that non-English language works account for one-third of total viewing time, with Korean content performing particularly well.

The Korean drama "True Education" recorded 55 million views and is expected to become the most-watched K-drama after "Squid Game," followed by "Can This Love Be Interpreted?" (29 million views), "Lady Dua" (26 million views), and "Brave New World" (16 million views).

The second season of "Bloodhounds" recorded 24 million views.

Regarding "K-Pop Demon Hunters," the company reiterated that it is the first work to remain in the global top 10 for 52 consecutive weeks, and also mentioned the upcoming third-quarter K-drama "Donggung."

Regarding the subscription fee hike in North America implemented at the end of March, Netflix stated that it "proceeded smoothly as expected."

The company maintained its previous forecast that advertising revenue would reach 3 billion dollars by the end of the year.

However, the third-quarter earnings guidance provided by Netflix fell short of Wall Street expectations.

Netflix projected third-quarter revenue of 12.86 billion dollars and an EPS of 82 cents, which is lower than market analysts' estimates of 13 billion dollars in revenue and 84 cents in EPS.

Meanwhile, Netflix announced that starting next year, it will reduce the frequency of its engagement report publications from twice a year to once a year to focus on key financial metrics such as revenue and operating profit.

Netflix previously disclosed subscriber numbers on a quarterly basis but decided to stop doing so starting last year.

Netflix shares rose 0.91% in regular trading on this day compared to the previous day's closing price, but plunged more than 8% in after-hours trading following the earnings announcement, fluctuating around the 68 dollar level as of 5:00 PM U.S. Eastern Time.

(Photo: Yonhap News)