Netflix Co-CEO Reed Hastings attends the Milken Institute Global Conference on October 18, 2021 in Beverly Hills, California.
Patrick T Fallon | AFP | Getty Images
Netflix shares fell more than 23% on Tuesday after the company reported a loss of 200,000 subscribers in the first quarter. It’s the first time the streamer has reported a subscriber loss in more than a decade.
The company also said it expects the losses to continue and forecast a global loss of 2 million paid subscribers for the second quarter.
Here are the key numbers:
- EPS: $3.53 vs $2.89, according to a Refinitiv poll of analysts.
- Revenue: $7.78 billion vs $7.93 billion according to a Refinitiv poll of analysts.
- Global Additions to Net Paid Subscribers: A loss of 200,000 compared to 2.73 million additions expected by StreetAccount.
Netflix previously told shareholders it expects to add 2.5 million net subscribers in the first quarter. Analysts had predicted the figure would be closer to 2.7 million. In the same period a year ago, Netflix added 3.98 million paying users.
The company stated that ceasing its service in Russia and dissolving all paid memberships in Russia resulted in a loss of 700,000 subscribers. Excluding that impact, the company said it had 500,000 net additions in the most recent quarter.
Investors’ over-focus on new paying customers caused Netflix shares to also plummet 20% following the company’s report in January. In addition to weaker-than-projected fourth-quarter subscriber growth, company executives quietly admitted at the time that competition from other streaming platforms was hurting growth.
Netflix has increased its content spending, particularly originals, amid intense competition in the streaming space. To pay for it, it has increased the prices of its service. As the company explores other growth options, like adding video games, analysts and investors are wondering what else Netflix can do to boost revenue.
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