Reed Hastings attends Reed Hastings panel during Netflix ‘See What’s Next’ event at Villa Miani on April 18, 2018 in Rome, Italy.
Netflix shares popped more than 5% Tuesday after a big jump in subscriber growth in its Q1 2020 earnings report. The company has seen its stock outperform the market during the coronavirus pandemic as stay-at-home orders have given many consumers more time to explore streaming services.
Here is what Netflix reported:
- Earnings per share (EPS): $1.57
- Revenue: $5.77 billion
- Global paid net subscriber additions: 15.77 million
Wall Street was anticipating earnings per share of $1.65 on revenue of $5.76 billion, based on Refinitiv consensus estimates. Domestic (U.S. and Canada) paid subscriber additions were expected to come in at 775,000 and international paid subscriber additions were expected to be 7.2 million, according to FactSet. However, it’s difficult to compare reported earnings to analyst estimates for Netflix’s first quarter, as the impact of the coronavirus pandemic on earnings is complicated to assess.
In its letter to shareholders, Netflix said it expects viewership and subscriptions to spike but warned of an expected decline in viewership and slowdown in growth down the road.
“At Netflix, we’re acutely aware that we are fortunate to have a service that is even more meaningful to people confined at home, and which we can operate remotely with minimal disruption in the short to medium term,” the company wrote. “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.”
Moving beyond the initial phase of the crisis, Netflix will face new issues as content it was scheduled to film has been postponed. Production has ground to mostly a halt as the company has donated money to help the industry.
This story is developing. Check back for updates.