Netflix has lost a record 970,000 subscribers in the last quarter, but avoided its worst-case scenario of 2 million, as previously predicted.
The streaming giant is also predicting its customer growth will return in the next quarter, with an estimated 1 million new subscribers expected to sign up between July and September.
In a letter to shareholders Netflix said factors such as password sharing, competition and the slow economy were causes of the drop.
"Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content and marketing as we've done for the last 25 years, and to better monetize our big audience," the company said.
The first quarter of 2022 saw the company lose subscribers for the first time with inflation, competition and the war in Ukraine blamed for the 200,000 loss.
Last week it revealed it was working with Microsoft on its plans for a ad-supported subscription tier, which will offer lower-cost streaming providing customers are happy to watch adverts.
It plans to launch that in 2023, it said.
Password sharing has also been an increased focus for Netflix this year, with two separate trials underway in South America.
Account sharing is a longstanding practice with an estimated 100 million households worldwide watching Netflix that way.
Chengyi Long, director of product innovation at Netflix, previously said password between households was impacting the company's ability to invest in new movies and television shows.
"We've always made it easy for people who live together to share their Netflix account, with features like separate profiles and multiple streams in our Standard and Premium plans," she said.
"While these have been hugely popular, they have also created some confusion about when and how Netflix can be shared."
The first trial, in Chile, Costa Rica and Peru was to "understand the utility" of the feature "before making changes anywhere else in the world", Netflix said at the time, but there was confusion over the system.
The second trial was announced this week, with users in Argentina, El Salvador, Guatemala, Honduras and the Dominican Republic prompted to pay extra if they use an account outside their household for over two weeks.
Depending on where they are located, this costs an additional NZ$1.30 to NZ$3.30 per month.
In the new trial, subscribers nominate a primary 'home' location where Netflix can be accessed across all devices. Additional 'homes' can then be purchased to give users in those locations access.
