Brief - The Hustle

Netflix shows mortality after weak Q2 subscriber and revenue numbers

Written by Wes Schlagenhauf | Jun 30, 2020 8:49:43 AM

Netflix Inc. is probably throwing some sad movies into their queue after the do-no-wrong streaming juggernaut posted ‘weaker-than-expected’ subscriber and revenue numbers in Q2.

MarketWatch reports that Netflix shares fell around 14% upon news that they added just 5.2m users, down from 6.2m estimate the company listed in April.

But they did hit their domestic earnings expectations

On the bright side, the company reported a profit of $384m at 85 cents a share, topping their projection of 79 cents, up from $66m in Q2 a year ago.

Unfortunately, they couldn’t say the same for their international revenue: In April, Netflix predicted a $65m+ impact on international revenue YoY, but Netflix says that a strengthened US dollar reduced the impact.

In their letter to shareholders, Netflix admitted the company had “over-forecasted” both domestic and global net subscriber growth.

Does this spell signs of the end?

Hahahaha… No. Netflix shares have risen 109% so far this year, while the rest of the S&P 500 rose around 4.7% combined.

But, the one concern that still plagues analysts is Netflix’s spending: The company blew through $559m more than it brought in (down around 8.8% from last year).