Netflix reported its first-quarter 2022 earnings Tuesday, revealing how the company did in terms of subscriber signups and financial growth in the three-month period that included the debuts of “Bridgerton” Season 2 and “The Adam Project.”
The streaming service lost 200,000 subscribers in Q1 and said it expects to lose another 2 million in the current second quarter. In January, Netflix reported it had 221.84 million subscribers at the end of 2021. The new total is 221.64 million subs.
Netflix previously forecast 2.5 million paid net adds in Q1 while Wall Street analysts expected Netflix to add 2.8 million new subscribers worldwide in the first quarter vs. 3.98 million in the year-earlier period, according to FactSet.
In January, Netflix announced that it was hiking prices in the U.S. and Canada — a move that aimed to boost revenue but was seen as likely to result in higher cancellation rates in its most mature and slowest-growing region. For American subs, the standard two-stream HD plan is going up $1.50 (about 11%) from $13.99 to $15.49/month. It marks Netflix’s third price increase in as many years.
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“Our revenue growth has slowed considerably as our results and forecast below show,” Netflix said in a letter to shareholders that accompanied its Q1 earnings release. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently. While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we’ll be holding our operating margin at around 20%. Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors. These are Netflix’s core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term.”
Wall Street forecast earnings per share (EPS) of $2.89 on $7.93 billion in revenue, according to analyst consensus data provided by Refinitiv. Netflix reported diluted EPS of $3.53 on $7.868 billion in revenue.
Netflix stock closed Tuesday at $348.42 per share. The regular U.S. stock markets will reopen Wednesday at 9:30 a.m. ET.
Netflix executives will present a pre-recorded virtual earnings interview at 6 p.m. ET to discuss the quarter in greater detail.
Pictured above (l. to r.): “The Adam Project” and “Bridgerton” Season 2
More to come…
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