Online-video streaming giant Netflix, Tuesday reported a profit for the second-quarter that fell short of Wall Street view, despite revenues gaining nearly 20% and exceeding estimates.
Netflix added 1.54 million subscribers globally in the quarter, far above its forecast of 1.00 million, to end the quarter with 209.
18 million subscribers. The company lost 0.43 million customers in the US and Canada region during the quarter, while Europe, the Middle East and Africa (EMEA) region subscriber additions were 0.19 million, Latin America were up 0.76 million and Asia-Pacific rose 1.02 million.
“We finished the quarter with over 209 million paid memberships, slightly ahead of our forecast. COVID has created some lumpiness in our membership growth (higher growth in 2020, slower growth this year), which is working its way through,” Netflix said in a letter to investors.
For the third quarter, the company expects to add 3.50 million subscribers.
Netflix had witnessed a huge demand for its service during the pandemic period, with user growth surging in 2020. However, this has led to growth slowing down this year.
Los Gatos, California-based Netflix’s second-quarter profit rose to 1.35 billion dollars or 2.97 dollars per share from 720 million dollars or 1.59 dollars per share last year. On average, 35 analysts polled by Thomson Reuters expected earnings of 3.15 dollars per share for the quarter.
Netflix’s revenues for the quarter rose 19.4 per cent to 7.34 billion dollars from 6.15 billion dollars last year. Analysts had a consensus revenue estimate of 7.32 billion dollars for the quarter.
Revenue growth was driven by an 11-per-cent increase in average paid streaming memberships and 8-per-cent growth in average revenue per membership.
Looking forward to the third quarter, Netflix expects revenues of 7.48 billion dollars and earnings of 2.55 dollars per share. Analysts polled by Thomson Reuters currently expect earnings of 2.17 dollars per share and revenues of 7.48 billion dollars.
NFLX closed Tuesday’s trading at 531.05 dollars, down 1.23 dollars or 0.23 per cent, on the Nasdaq. The stock further dropped 14.66 dollars or 2.76 per cent in the after-hours trade.