Netflix records a loss of nearly 1 million subscribers between April and June

Netflix announced Wednesday that it had lost nearly 1 million subscribers in the period between April and June, but the scenario isn’t as bad as it seems.

The reported loss is 970,000 subscribers in the quarter in question, a forecast that was below Wall Street’s expectations, but avoids the worst-case scenario expected by the company.

Netflix’s expectations in April were for the loss of up to 2 million subscribers in the second quarter of the year, which shocked investors and created doubts about the company’s growth, causing Netflix’s rating to drop. But the current scenario isn’t as catastrophic as the company’s initial expectation.

On the other hand, while cancellations in the second half of the year weren’t as high as expected – 970,000 versus 2 million – Netflix estimates it will add around 1 million subscribers in the third quarter, a number well below Wall’s expectations. Street, which has around 1.84 million new subscribers, according to Refinitiv data.

According to Netflix, in a letter to shareholders, the decline in the period was attributed to factors such as password sharing, competition and the economic crisis. Despite the negative period, Netflix remains the largest streaming service in the world, with over 220 million subscribers.

Despite the negative numbers, Netflix shares have risen in the market as the company’s forecasts represent a return to subscriber growth. Thus, the shares that accumulated a 67% decline this year due to concerns about the growth of the streaming giant, have risen by 7% after the publication of the balance sheet.

An important point is that Netflix is ​​planning, along with Microsoft, to launch an advertising service next year.

Recently, Netflix announced that it will charge users who log into their accounts from more than one household in five Latin American countries: Argentina, Dominican Republic, Honduras, El Salvador and Guatemala. In Brazil this rule will not be adopted.

Netflix posted earnings per share of US $ 3.20 (R $ 17.20) in the second quarter of this year, which represents 9% growth despite the appreciation of the dollar. If the foreign exchange effect is not taken into account, this revenue would have grown by up to 13%.

The Netflix post reports the loss of nearly 1 million subscribers between April and June first appeared on Olhar Digital.

Source: Olhar Digital

Emily

Emily Jhon is a product and service reviewer at Gossipify, known for her honest evaluations and thorough analysis. With a background in marketing and consumer research, she offers valuable insights to readers. She has been writing for Gossipify for several years and has a degree in Marketing and Consumer Research from the University of Oxford.