Netflix Exceeds Q1 Subscriber Expectations Despite Weak Q2 Forecast
Netflix adds a record 9.6 million paid subscribers in the first quarter of 2019, beating analyst predictions. However, shares dip after-hours as the company projects slower growth for the second quarter.
Netflix reports impressive first-quarter earnings for 2019, adding 9.6 million paid subscribers to reach a total of 148.9 million members worldwide. This 16 percent year-over-year growth significantly exceeds analyst predictions of 8.9 million new users, with the vast majority of new signups coming from international markets. Financially, the company brings in $4.5 billion in revenue and earns 76 cents per share, matching market expectations.
Despite the strong first-quarter performance, Netflix shares drop 1.8 percent in after-hours trading due to a weaker-than-expected forecast for the second quarter. The company predicts only 5 million net additions for Q2, marking an 8 percent decrease compared to the same period in 2018. This projected slowdown occurs as Netflix implements significant price hikes in the United States, Brazil, Mexico, and parts of Europe, though the company notes the US response tracks similarly to previous increases with only modest short-term churn.
The streaming giant also shares impressive viewership metrics for its original content, reporting that "Triple Frontier" reaches 52 million households and "The Umbrella Academy" captures 45 million households in their first four weeks. Additionally, Netflix announces plans to test weekly top 10 lists of popular content for UK viewers in the second quarter. As Apple and Disney prepare to launch competing streaming services, Netflix embraces the rivalry, stating that the clear beneficiaries of this increased competition will be content creators and consumers.