- Netflix on Thursday smashed Wall Street expectations for subscriber growth during its second quarter, but forecasted slim gains in the third quarter, as it expects the impact of the coronavirus pandemic and stay-at-home orders to fade.
- The streaming company added 10.1 million paid streaming subscribers during the second quarter, and forecasted 2.5 million additions for the third quarter.
- Shares of Netflix fell as much as 12% in after-hours trading on the day of the news.
- Ahead of earnings, data from SimilarWeb also showed a sharp decline in the rate that international users were canceling Netflix during the quarter, which could fuel the company’s subscriber growth.
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Netflix on Thursday smashed Wall Street expectations for subscriber growth during its second quarter, but forecasted slim gains in the third quarter, as its anticipates the impact of the coronavirus pandemic and stay-at-home orders to fade.
The streaming-video company added 10.1 million paid streaming subscribers in the second quarter, compared with the 8.3 million Wall Street was expecting.
In the third quarter, Netflix forecasts it will add just 2.5 million paying members, well below the 6.8 million it brought in a year earlier.
Shares of Netflix were down 12% in after-hours trading on the news.
Subscribers had signed up for Netflix at a dizzying pace in Q1 as people spent more time at home amid the coronavirus pandemic. The company's stock had been riding high since that April report, closing at a peak of $548.73 on July 10.
Ahead of the Q2 report, data from analytics firm SimilarWeb had suggested a sharp decline in the rate that international users were canceling Netflix during the quarter could help fuel that subscriber growth, as Business Insider previously reported.
The pandemic has slowed down production globally, but you wouldn't yet know it from Netflix's release slate. The streamer released in the second-quarter originals like the film "Extraction," which it says is its most popular movie ever, and series like "Too Hot to Handle," "#BlackAF," "Space Force," and new seasons of "Money Heist" and "The Politician."
Here were the key numbers from Netflix's Q2 earnings:
- Q2 revenue: $6.15 billion, versus Wall Street estimates of $6.09 billion and Netflix's forecast of $6.05 billion.
- Q2 earnings per share (GAAP): $1.59, versus Wall Street estimates of $1.82 and Netflix's forecast of $1.81.
- Q2 global paid subscriber growth (paid net additions): 10.09 million, versus Wall Street estimates of 8.27 million and Netflix's forecast of 7.5 million.
- 2.94 million in the US and Canada region, versus Wall Street estimates of 983,530.
- 2.75 million in the Europe, Middle East, and Africa region, versus Wall Street estimates of 3.30 million.
- 1.75 million in the Latin America region, versus Wall Street estimates of 1.61 million.
- 2.66 million in the Asia-Pacific region, versus Wall Street estimates of 2.44 million.
- Q3 global paid subscriber growth estimate (paid net additions estimate): 2.5 million, versus Wall Street estimates of 5.25 million.
