Netflix shares crater 23% after company reports it lost subscribers for the first time in more than 10 years
Shares of Netflix cratered more than 23% on Tuesday after the company reported a loss of 200,000 subscribers during 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, forecasting a global paid subscriber loss of 2 million for the second quarter.
Here are the key numbers:
- EPS: $3.53 vs $2.89, according to a Refinitiv survey of analysts.
- Revenue: $7.78 billion vs $7.93 billion, according to a Refinitiv survey of analysts.
- Global paid net subscriber additions: A loss of 200,000 compared with 2.73 million adds expected, according to StreetAccount estimates.
Netflix previously told shareholders it expected to add 2.5 million net subscribers during the first quarter. Analysts had predicted that number would be closer to 2.7 million. During the same period a year ago, Netflix added 3.98 million paid users.
The company said that the suspension of its service in Russia and the winding-down of all Russian paid memberships resulted in a loss of 700,000 subscribers. Excluding that impact, the company said it would have seen 500,000 net additions during the most recent quarter.
Investors’ hyper focus on new paying customers led Netflix shares to similarly plummet 20% after the company’s report in January. In addition to weaker-than-forecasted fourth-quarter subscriber gains, company executives at that time quietly admitted that competition from other streaming platforms was having a negative impact on its growth.
Netflix has increased its content spend, particularly on originals, amid intense competition in the streaming space. To pay for it, it’s hiked prices of its service. While the company is exploring other options for growth, like adding video games, analysts and investors are wondering what else Netflix can do to bolster revenue.
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