Netflix added a net 15.77 million paid streaming customers in the first quarter of 2020 — blowing away prior estimates thanks to the coronavirus pandemic and setting a record for quarterly gains.
The streamer said it had 182.9 million paid subscribers globally as of the end of Q1, up 22.8% from a year earlier. Netflix had previously told investors it expected to add 7.0 million subs in the quarter, but that was before COVID-19 kept millions of people homebound.
“[O]ur membership growth has temporarily accelerated due to home confinement,” Netflix said in its quarterly shareholder letter. In addition, it said that due to the shutdown of Hollywood productions “some cash spending on content will be delayed, improving our free cash flow, and some title releases will be delayed, typically by a quarter.”
As another negative consequence of the pandemic, Netflix said the “sharply stronger U.S. dollar” depressed international revenue. The company also said customer-support operations suffered significant disruption before it added 2,000 new remote agents.
In after-hours trading Tuesday, Netflix shares popped to new all-time highs — up as much as 4.8% to $454.80 per share — but fell back to up about 1%.
Wall Street estimates for how big Netflix’s Q1 “quarantine bump” might be were mixed. Some analysts expected the company to report in-line with the prior 7 million guidance, while others forecast global net gains of 8.5 million or as much as 10 million.
Netflix revenue for Q1 came in at $5.77 billion, in line with analyst consensus estimates, while net income of $709 million ($1.57 per share) was slightly lower than Wall Street’s expected EPS of $1.65.
For the second quarter, Netflix projected 7.5 million net additions worldwide. “Hopefully, progress against the virus will allow governments to lift the home confinement soon,” it said in the shareholder letter. “As that happens, we expect viewing and growth to decline.”
(Excerpt) Read more in: Variety