Netflix (NFLX) reported mixed first-quarter results on Tuesday, missing subscriber growth forecasts while beating analysts’ earnings-per-share expectations.
The stock, which initially fell 12% after the release, saw shares pare losses as investors digested the report – the first since co-CEO and co-founder Reed Hastings stepped down from his role as leader within the company.
Here are Netflix’s first quarter results compared to Wall Street consensus estimates, as compiled by Bloomberg:
Income: $8.16 billion vs. $8.18 billion expected
Earnings per share (EPS): $2.88 vs $2.86 expected
The subscribers: 1.75 million vs. 2.3 million net additions expected
Earnings and revenue projections disappointed after Netflix revealed it forecast $8.24 billion in revenue and $2.84 in diluted EPS for the second quarter – below Wall Street forecasts of 8.5 billion in revenue and $3.05 in diluted EPS.
The results come as investors eagerly await updates regarding the company’s recently launched ad-supported tier, in addition to its controversial crackdown on password sharing.
Netflix, which has expanded its crackdown to include countries like Canada, New Zealand, Portugal and Spain, in addition to test countries Chile, Costa Rica and Peru, has revealed it plans “a broad deployment” of repression this current quarter that will include the United States
“While we could have launched (paid account sharing) at scale in Q1, we found opportunities to improve the member experience. We learn more with each rollout and have incorporated the latest learnings, which we believe will lead to even better results,” the company wrote in the release, adding that it was “pleased with the results” so far despite the short-term churn seen in markets across America. Latin.
Netflix also revealed more information about its ad-supported level, telling shareholders in the statement, “Although it is still very early days, we continue to be pleased with our progress in all key dimensions: members, value to advertisers and additional contribution to our Ads level engagement is above our initial expectations and as expected we have seen very little change from our standard and premium plans
The ad plan, dubbed “Basic with Ads”, costs $6.99 per month in the US and serves as an add-on to Netflix’s existing ad-free tiers – the Standard plan ($15.49 per month) and Basic plan. ($9.99 per month). month.)
The company added, “Given the current strong performance and trajectory of our advertising savings per member, particularly in the US, we are enhancing our advertising experience with more streams and improved video quality to appeal to a wider audience. of consumers”.
Alexandra Channel is a senior reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at firstname.lastname@example.org
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