Netflix Adds 16 Million New Subscribers as Home-Bound Consumers Stream Away
By Micah Maidenberg and Joe Flint
Netflix Inc. beat its forecast for subscriber growth in the
first quarter as consumers in many countries stayed at home due to
the coronavirus pandemic and hunted for ways to entertain
The streaming giant said Tuesday it added 15.8 million new paid
subscribers around the world in the quarter, more than double the 7
million new subscribers it had predicted for the period. In the
first quarter a year ago, Netflix added 9.6 million new subscribers
"Like other home entertainment services, we're seeing
temporarily higher viewing and increased membership growth. In our
case, this is offset by a sharply stronger US dollar, depressing
our international revenue, resulting in revenue-as-forecast. We
expect viewing to decline and membership growth to decelerate as
home confinement ends, which we hope is soon," Netflix said in its
letter to shareholders.
Shares were up 6% in after-hours trading. The stock is up 34%
year to date, making the streaming service one of the few companies
to see its shares appreciate since the coronavirus crisis
Most of the company's subscriber growth occurred outside of
North America. Netflix said it added almost 7 million subscribers
in the region including Europe and the Middle East, 2.9 million in
Latin America and 3.6 million in Asia.
In the U.S. and Canada, where it faces more competition as other
media companies launch their own streaming services, Netflix
reported 2.3 million new paid subscribers, compared with a gain of
548,000 in the fourth quarter and 1.9 million in the first quarter
a year ago.
In its shareholder letter, Netflix said its service has seen
"significant disruption when it comes to customer support and
content production." The company said it has added 2,000 remote
agents to handle the surge in customer calls which are an offshoot
of the increased demand for content.
Netflix said it generated revenue of $5.77 billion for the first
quarter, up from $4.52 billion a year earlier. Analysts had
forecast $5.75 billion in revenue for the latest period.
Profit rose to $709 million, or $1.57 a share, from $344
million, or 76 cents a share, the year earlier. The company was
expected to earn $1.64 a share, according to estimates compiled by
Write to Micah Maidenberg at email@example.com and Joe
Flint at firstname.lastname@example.org
(END) Dow Jones Newswires
April 21, 2020 16:46 ET (20:46 GMT)
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