Netflix Shares Plunge After Big Miss on Subscriber Growth
*By Kavitha Shastry*
Shares of Netflix plunged after hours Wednesday, after badly missing expectations for global subscriber growth in the second quarter. The company also posted a surprise drop in U.S. users.
In a letter to shareholders, the streaming giant attributed the weak performance to price increases that began rolling out earlier this year and a relative dearth of new content. It also pointed out particularly strong growth in the first quarter.
The company tried to brush off concerns that increased competition had an impact, saying, "There wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions."
Netflix said it expects to return to a more normal rate of growth in the back half of the year. The third season of "Stranger Things" debuted a few days after the end of the second quarter, and the final run of "Orange Is the New Black" hits the service next week.
But analysts have raised concerns over the looming loss of its most popular titles, "The Office" and "Friends," which will exclusively be offered on rival services in the next few years.
Netflix profit came in slightly better than expected, at $0.60 a share versus analyst expectations for $0.56, but revenues of $4.92 billion fell just short of estimates.
The company added 2.8 million users internationally — Netflix previously said it expected to gain 4.7 million customers. And some analysts had predicted up to 5.3 million new subscribers. In the United States, Netflix shed 126,000 members.
For the current quarter, it expects to add 7 million customers globally, with 800,000 in the U.S.
Shares were down more than 10 percent after hours, but even with the drop, Netflix shares are up about 20 percent this year.
Whether it’s a deepfake video of actor Tom Cruise discovering gum in a lollipop or President Joe Biden discouraging people from voting via telephone, you’ve likely come across a deepfake video, photo or audio recording.
Tensions in the South China Sea, Apple moving to India, and banning TikTok? The podcast ‘Face Off: The U.S. Versus China’ helps explain how we got here.
Cust2Mate is a leading innovator in retail technology, aiming to revolutionize the shopping experience. By implementing smart cart technology, the tech company addresses the issue of theft while enhancing the shopper's journey.
The Biden administration has unveiled a plan, Plan B, to address the student loan debt crisis. It offers to cancel up to $20,000 in interest for borrowers enrolled in income-driven repayment plans. This proposal aims to reset balances for those facing growing debt due to unpaid interest, benefiting low—and middle-income borrowers. An estimated 25 million borrowers are eligible for some form of interest forgiveness.
As we head into the second quarter, there’s an argument in favor of buying Boeing stock. Why? As one expert says, ‘there’s nowhere else to get planes.’
With inflation and prices still on the rise, it might be worth considering a carpool app. One of them, Singapore-based Ryde, just went public in the U.S.
