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Illustration: Rebecca Zisser/Axios

Netflix's stock was down more than 5% in after-hours trading Tuesday after the tech giant reported that it missed expectations on global subscriber growth for the quarter.

Why it matters: Netflix experienced explosive growth during the first half of the year. It wasn't expected to match that growth this quarter, when lockdowns lifted and after new competitive services had launched, but analysts were still expecting it to meet expectations of at least 3.3 million net new global subscribers.

  • Netflix's stock ticked up ahead of earnings on Tuesday in anticipation of good news.

Details: The company met Wall Street estimates for its bottom line, but missed on earnings per share, suggesting that it spent more money on marketing and content relative to its subscriber revenues than investors had hoped.

  • In a letter to shareholders, Netflix said that the pandemic and its impact "continues to make projections very uncertain, but as the world hopefully recovers in 2021, we would expect that our growth will revert back to levels similar to pre-COVID."
  • It also said that it expects paid net subscriber additions to be down year-over-year in the first half of 2021 as compared to the unprecedented spike in subscribers in the first half of 2020.

By the numbers, per CNBC:

  • Earnings per share (EPS): $1.74 vs. $2.14 expected, according to Refinitiv consensus estimate.
  • Revenue: $6.44 billion vs. $6.38 billion expected, according to Refinitiv.
  • Global paid net subscriber additions: 2.2 million vs. 3.57 million expected, according to FactSet.

What's next: The company forecasts it will add 6 million paid net subscribers globally next quarter, bringing its total global paid subscriber count to over 200 million.

  • That's still fewer new subscribers than the number Netflix brought in Q4 last year, but the company is still dealing with the fallout of the pandemic, which has made it harder to produce new content.

Go deeper ... Netflix's earnings over the past year:

Go deeper

Ben Geman, author of Generate
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Big Oil's big reckoning

Illustration: Sarah Grillo/Axios

There doesn't seem to be an oil major that's got it all figured out between the pandemic, cloudy demand and price outlooks, and the unknown path through a world getting a bit more serious about climate.

Driving the news: ExxonMobil yesterday afternoon showed the latest signs of its struggle to position itself as it announced large write-offs and a big rethink of long-term spending.

2 mins ago - World

Israeli parliament opts for early elections in preliminary vote

Netanyahu (C) arrives in parliament today. Photo: Alex Kolomiensky/Pool/AFP via Getty

After six months of a dysfunctional power-sharing government, Israel is headed for its fourth elections in less than two years, most likely at the end of March.

Driving the news: The Knesset voted 61-54 today to approve the preliminary reading of a bill to dissolve the parliament and call new elections. Benny Gantz's Blue and White party supported the bill while Prime Minister Benjamin Netanyahu's Likud and the rest of the coalition voted against.

1 hour ago - Sports

The end of COVID’s grip on sports may be in sight

Illustration: Aïda Amer/Axios

Packed stadiums and a more normal fan experience could return by late 2021, NIAID director Anthony Fauci said yesterday.

Why it matters: If Fauci's prediction comes true, it could save countless programs from going extinct next year.

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