Netflix stock sinks amid subscriber slowdown
Netflix added 3.98 million global subscribers last quarter, a far cry from the 6.2 million additions anticipated by Wall Street analysts. This upcoming quarter, it expects to only add 1 million new subscribers.
Why it matters: The streaming giant is facing increased competition, particularly in the U.S. and increasingly abroad, which could be impacting its subscriber growth. In a letter to investors, Netflix blamed the slowdown on a lighter content slate in the first half of this year, due to COVID-19 production delays.
- The company noted its success in 2020, adding new subscribers during the pandemic, was bound to lead to a slowdown.
Yes, but: Netflix still reported positive earnings per share and revenue, compared to Wall Street estimates.
- Revenue grew 24% year over year and operating profit and margin reached all-time highs.
- Last quarter Netflix anticipated it would break-even for the full year for the first time in 2021.
By the numbers, per CNBC:
- Earnings per share (EPS): $3.75, vs $2.97 expected, according to Refinitiv survey of analysts
- Revenue: $7.16 billion, vs $7.13 billion expected, according to Refinitiv
- Global paid net subscriber additions: 3.98 million vs 6.2 million expected, according to Factset
What to watch: Netflix expects to add 1 million new subscribers next quarter.
- The streaming giant says it hopes the momentum will pick back up in the second half of the year. The company remains bullish in its long-term outlook, given the migration of TV content over to streaming platforms from traditional TV.
Go deeper ... Netflix's earnings over the past year: