Netflix added just 3.98 million streaming subscribers worldwide in the first quarter after adding 15.77 million a year ago as the COVID-19 pandemic set in.
The pandemic forced people indoors and set off a boom in people subscribing to streaming services and watching hours of television content online.
The streaming leader finished the quarter with 208 million paid subscribers. That was up 14% from a year ago, but below the company’s forecast of 210 million.
The tiny subscriber growth rate sent Netflix shares 10% lower in after market trading Tuesday.
Next quarter should mark the deepest trough for Netflix, The company said it expects to add just one million subscribers in the second quarter, a tough comparison to a year ago when the company added 10.09 million subscribers.
“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. We continue to anticipate a strong second half with the return of new seasons of some of our biggest hits and an exciting film lineup,” the company said in a letter to shareholders.
The company said it plans to spend $17 billion over the course of the year.
It downplayed the entrance of new competitors during the quarter, including Paramount Plus from ViacomCBS and Discovery Plus.
“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,” the company said.
First quarter net income jumped to $1.707 billion, or $3.75 a share, from $709 million, or $1.57 a share, a year ago.
Revenue rose 24% to $7.13 billion.
The financial numbers were higher than expected, in part because the production of shows being delayed.
Netflix said it expects second quarter net income to be $1.441 million, or $3.16 a share, up from $720 million, or $1.59 a share. It forecasts second quarter revenue at $7.3 billion, up from $6.148 the prior year.
Netflix said average revenue per subscriber rose 6% in the quarter.
Many Netflix shows drew big viewing numbers in the quarter. The company said that Firefly Lane was watched in 49 million homes in the first 28 days it was available. Others mentioned by the company were season three of Cobra Kai (45 million), Fate: The Winx Saga (57 million, and Ginny & Georgia (52 million). The top Netflix movies in Q1 included I Care A Lot with 56 million homes viewing, YES DAY (62m), Outside the Wire (66m) and the last installment of To All the Boys I’ve Loved 3 Before trilogy (51m).
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