The global streaming giant Netflix Inc. on Tuesday reported a loss of subscribers for the first time in more than a decade and predicted further contraction in the second quarter, a rare setback for a company that has been a reliable growth engine for investors.
Netflix it lost 200,000 subscribers in its first quarter, falling well short of its modest predictions that it would add 2.5 million subscribers.
Its decision in early March to suspend service in Russia after the invasion of Ukraine it meant the loss of 700,000 users. Shares of the company slumped 24% in after-market trading.
The poor results of Netflix they beat other video-related stocks like Roku, which fell more than 6%; Walt Disney almost 4% and Warner Bros Discovery 2 percent.
Netflixwhich currently has 221.6 million subscribers, had recorded its last customer loss in October 2011.
Netflix offered a grim prediction for the coming quarter, forecasting that it would lose 2 million subscribers, despite the return of long-awaited series like stranger things Y Ozarks and the movie debut The Gray Manstarring Chris Evans and Ryan Gosling.
wall street it was targeting 227 million customers for the second quarter, according to Refinitiv data.
First-quarter revenue grew 10% to $7.87 billion, slightly below Wall Street’s forecast of $7.93 billion. Net earnings per share was $3.53.
The large number of households sharing accounts, combined with competition, is creating revenue headwinds to the upside,” Netflix said, explaining difficulties in capturing new customers.
The streaming service was expected to see slower growth, amid intense competition from amazon.com, Walt Disney Companythe newly created Warner Bros Discovery Inc. and newcomers with lots of money like Apple Inc..
Streaming services spent $50 billion on new content last year in an attempt to attract or retain subscribers, according to researcher Ampere Analysis. This represents an increase of 50% compared to 2019.
As growth slows in mature markets like the United States, Netflix increasingly focuses on other parts of the world and invests in content in local languages.
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