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Netflix reports dramatic slowdown in subscribers

(L-R) Reed Hastings and Ted Sarandos attend the “Marseille” Netflix TV Serie World Premiere At Palais Du Pharo In Marseille, on May 4, 2016 in Marseille, France.

Stephane Cardinale | Corbis | Getty Images

Netflix shares fell as much as 11% in after-hours trading after reporting a large miss in subscriber numbers in its first-quarter earnings report. The company also said it only expects to add about 1 million subscribers in the current quarter.

Here are the key numbers:

  • Earnings per share (EPS): $3.75, vs $2.97 expected, according to Refinitiv survey of analysts
  • Revenue: $7.16 billion, vs $7.13 billion expected, according to Refinitiv
  • Global paid net subscriber additions: 3.98 million vs 6.2 million expected, according to Factset

The company’s revenue still grew 24% year over year and was in line with its beginning of quarter forecast, Netflix said. It also delivered a strong beat on earnings compared to Street estimates.

“We believe paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays,” Netflix said in its letter to shareholders.

Netflix has continued to hold itself against a bevy of competitors including Disney’s Disney+ and Hulu, AT&T’s HBO Max, Apple TV+, Amazon Prime and Comcast NBCUniversal’s Peacock. The company said in its report that it doesn’t believe competition played a factor in the weak subscriber numbers.

“We don’t believe competitive intensity materially changed in the quarter or was a material factor in the variance as the over-forecast was across all of our regions,” according to the report.

Netflix said it approved a buyback program to repurchase up to $5 billion in common stock, beginning in 2021 with no fixed expiration date. That’s expected to begin the quarter, the company said.

This story is developing. Please check back for updates.

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