Jul 16, 2018 - Technology

Netflix stock sinks after missing on Q2 revenue, subscriber additions

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Netflix stock was down nearly 14% in after-hours trading after the company reported that it missed investor expectations on revenue and subscriber additions.

Why it matters: The company has spent an enormous amount on original content and marketing to ensure strong user growth quarter after quarter. Both expenditures have held Netflix back from profitability for years, and are projected to continue to do so. However, investors have been bullish on the platform due to strong user growth over the past several quarters.

By the numbers: Netflix added 5.2 million subscribers, the same as Q2 last year, but lower than its forecast of 6.2 million. The company brought in $3.91 billion in revenue versus $3.94 billion expected.

A silver lining: The company beat in earnings per share, with $0.85 vs. $0.79 expected.

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