Netflix misses subscriber growth targets

Summary

  • Netflix misses the subscriber guidance of 210 million users
  • The Company is facing challenges as economies open up
  • Revenues continue to show double-digit growth

The Silicon Valley-based content platform – Netflix Inc (NASDAQ: NFLX) – has missed out on its guidance forecast for the subscriber base, leading to correction in its share price.

The company added 3.98 million subscribers in the January-March quarter of 2021, taking the total subscriber count to 207.64 million, which is 2.36 million lesser than 210 million subscribers that it had forecasted at the beginning of the quarter.

Also Read: How Netflix Is Ruling the Roost Among Streaming Sites? Where Does Walt Disney Stand?

What’s more, the company is not likely to touch the 210-mark even by June end. Netflix expects its subscriber base to increase by just one million in the next three months.

Having added 37 million subscribers in 2020 on a net basis, the streaming giant’s growth seems to be slowing down now. The company will face another litmus test, as more and more economies open up across the world after the pandemic-driven lockdowns, leading to lesser demand for the content platform.

Also Read: Netflix Straining Ahead Of Tuesday Report

The company is of the opinion that the membership growth slowed due to “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”.

Probably, this is the reason why the shares of Netflix corrected by 88 basis points (bps) on the National Association of Securities Dealers Automated Quotations (NASDAQ), despite a 141% surge in its year-on-year net income. As revenues of the company surged by 24% to US$7.16 billion, its costs remained the same. As a result, the net income of the company surged 141% to US$1.71 billion in the quarter.

Also Read: If Netflix Has Its Way, You May Soon Need Your Own Account

The company also saw a huge surge in its operating margins – a key metric for any tech company. The operating margin of the company rocketed 13 percentage points in the quarter to touch 27.4%.


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