Netflix reported fourth-quarter earnings after the bell on Thursday. The streamer beat on both the top and bottom lines, but shares plunged more than 18% in after-hours trading on slowing subscriber growth.
Here are the key numbers:
- Earnings per share (EPS): $1.33 vs 82 cents expected in a Refinitiv survey of analysts.
- Revenue: $7.71 billion vs $7.71 billion expected, according to Refinitiv.
- Global paid net subscriber additions: 8.28 million vs 8.19 million expected, according to StreetAccount estimates
Netflix and analysts had anticipated a large jump in consumers toward the end of 2021 when the company released new TV shows and movies that had been pushed to the back half of the year. Netflix had released high-performing content such as “Emily in Paris,” “Don’t Look Up,” “Red Notice,” and “You.”
The company added 8.28 million global paid net subscribers in the fourth quarter. Analysts had expected the company to add 8.19 million global paid net subscribers, according to StreetAccount estimates.
But slowing subscriber growth led the stock to dip in after hours. In Q4 2020, Netflix added 8.5 million subscribers. The company also said for the first quarter of 2022, it expects to add 2.5 million subscribers, compared to the 3.98 million it added in Q1 2021. Netflix said it expects a more back-end weighted content slate in the first quarter, with big premieres set for March.
Netflix said increased competition from other companies was one reason for the slowdown, though in the past it had said companies like Apple and Disney wouldn’t materially affect growth.
“Consumers have always had many choices when it comes to their entertainment time – competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering,” Netflix said. “While this added competition may be affecting our marginal growth some, we continue to grow in every country and region in which these new streaming alternatives have launched.”
Disney and Roku shares also dipped in after-hours trading.
Netflix announced price increases in the U.S. and Canada last week. In the States, the monthly cost for the basic plan rose $1 to $9.99. The standard plan jumped from $13.99 to $15.49 and the premium plan rose from $17.99 to $19.99.
Netflix’s strategy is to increase prices as customers become even more entrenched in the company’s exclusive content. Price increases can help offset waning customer growth.
This is a developing story. Please refresh for updates.
