Netflix lifts profit but shares drop on forecast miss
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The news: Netflix has reported better than expected subscriber gains for a second straight quarter but signalled the positive surprises could be over after forecasting below target revenue growth.
The numbers: The streaming giant said its ad-supported plans brought in 9.3 million new customers in the first quarter, nearly double the consensus forecast. Earnings per share jumped to USD5.28 ($8.22), also beating expectations. However, it projected revenue of USD9.49 billion for the June quarter, slightly below market expectations.
Netflix shares were down 4.2% to USD585.41 in after-hours trading.
The context: The company said it will stop reporting subscriber additions each quarter starting 2025, and instead will announce them only when major milestones are reached. Netflix executives have urged investors to focus on revenue and operating margins when assessing its progress.
Analysts believe the streaming service has pulled in as many users as possible from its crackdown on password-sharing and it is unclear what would drive new sign-ups.
In a letter to shareholders, the company said it would work to improve the variety and quality of its entertainment and scale its advertising business to grow further.
