Why a Strong U.S. Dollar Is Bad News for Netflix
Streaming giant Netflix (NASDAQ: NFLX) lost fewer subscribers than expected in the second quarter. The company is working on a variety of initiatives, including an ad-supported tier and the monetization of password sharing, in an effort to shore up both the subscriber count and revenue in the coming years.
One thing Netflix has little control over, though, is the strength of the U.S. dollar. Netflix sells its services in over 190 countries, generating revenue in local currencies but reporting results in dollars. With the value of the dollar surging relative to other currencies this year, Netflix's results are taking a big hit.
Netflix reported revenue of $7.97 billion in the second quarter, up about 9% year over year. Because Netflix generates the bulk of its revenue from outside the United States, movement in currency exchange rates impacts the company's reported revenue. Netflix's revenue was reduced by $339 million in the second quarter due to these fluctuations.
Source Fool.com
