• Netflix added more than double its target for subscriber growth during its first quarter and demolished Wall Street’s expectations for the period.
  • The streaming giant added 15.77 million paid subscribers globally, the highest it has ever gained in a single quarter.
  • Revenue for the period slightly surpassed expectations at $5.8 billion.
  • Netflix has been a bright spot in the media sector in recent weeks, as social-distancing practices threaten other media operations like theme parks, theatrical releases, and TV and film productions.
  • Ahead of the earnings announcement, third-party data suggested Netflix’s viewership was surging during the first quarter, as people spent more time at home.
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Netflix added more than double the subscribers it forecasted during its first quarter of 2020, growing its audience to 183 million paid subscribers as streaming viewership surged around the world.

The streaming company added 15.77 million paid subscribers globally, compared with the 7 million additions it forecasted, Netflix announced on Tuesday. Wall Street had estimated Netflix would add 8.47 million subscribers during the period.

The earnings announcement offered the first look at how social distancing has impacted Netflix’s streaming business. The company said in the release that it is seeing a temporary rise in viewership as well as subscriber growth.

Netflix also said that while its product teams have been largely unaffected by the global crisis, its customer support group grappled with the higher demand during the quarter, and its content production teams coped with production shutdowns. Nearly all TV and film production has been halted globally.

Netflix posted revenue of $5.8 billion for the first quarter, which slightly surpassed analyst expectations. The company said the value of the US dollar rose sharply compared with other currencies, and dragged on its international revenue growth. More than half of Netflix’s revenue during the period came from outside the US and Canada.

Netflix reported earnings of $1.57 per share, below the $1.64 earnings per share analysts estimated. Shares of Netflix spiked briefly during after hours trading, and then were flat, on the report.

Overall, Netflix stock is up about 35% this year, in part because of the expectation that people were streaming more video as they spent more time at home. Netflix also scored hits like “Tiger King” and “Love Is Blind” during the quarter and released new seasons of fan favorites like “Narcos: Mexico,” “Ozark,” and “Elite.”

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Netflix has been a bright spot in the media sector in recent weeks, as social-distancing practices threaten other media operations like theme parks, theatrical releases, and TV and film productions.

Ahead of the release, third-party data shared exclusively with Business Insider suggested Netflix’s usage was strong during the first quarter, especially in the month of March, when many parts of the world went into lockdown:

But, as Netflix marked its strongest-ever quarter for subscriber growth, it also cautioned that the current global crisis makes it difficult to guide for the future.

The company forecasted it would add 7.5 million paid subscriber in the second quarter, but said the estimate is “mostly guesswork.” Subscriber growth could slow as more people come out of lockdown, and it’s unclear when physical productions will be safe to resume.

Netflix said it’s expecting a “modest” impact on its release slate for the second quarter, mostly related to language dubbing.

Here were the key numbers from Netflix’s Q1 earnings:

  • Q1 revenue: $5.77 billion, versus Wall Street estimates of $5.74 billion and Netflix’s forecast of $5.73 billion.
  • Q1 earnings per share (GAAP): $1.57, versus Wall Street estimates of $1.64 and Netflix’s forecast of $1.66.
  • Q1 global paid subscriber growth (paid net additions): 15.77 million, versus Wall Street estimates of 8.47 million and Netflix’s forecast of 7 million.
  • Q2 global paid subscriber growth estimate (paid net additions estimate): 7.5 million.
  • Q2 revenue estimate: $6.05 billion, versus Wall Street estimates of $5.96 billion.
  • Q2 earnings per share (GAAP) estimate: $1.81 versus, versus Wall Street estimates of $1.55.

For more about how the coronavirus pandemic is affecting media, see our coverage on BI Prime: