Netflix (NFLX) posted its fourth-quarter earnings after the market closed on Thursday, Jan. 20. The big news in the release was that subscriber growth is set to slow down, which is a fact that seemed to displease investors. Pre-market today, NFLX stock plunged 19.53%, down to $409.00 a share.
Fourth-Quarter 2021 Results
The firm’s fourth-quarter results beat on earnings. The steaming services posted earnings per share of $1.33, ahead of forecasts of $0.82 per share. Quarterly revenue of $7.71 billion was in line with expectations.
Subscriber Growth Forecast (Slowdown)
The firm added 8.28 million global paid net subscribers during its fourth quarter, ahead of expectations of around 8.19 million. Netflix also announced that it only expects to add 2.5 million subscribers during Q1 2022, compared to 3.98 million added in Q1 2021. Forecasters had been looking for a bigger Q1 2022 number, somewhere in the ballpark of 6.93 million new subscribers.
Increased Global Competition
According to Netflix, “Consumers have always had many choices when it comes to their entertainment time - competition that has only intensified over the last 24 months as entertainment companies all around the world develop their own streaming offering.” The company noted that this increased competition might be affecting its marginal growth, but that the firm still continues “to grow in every country and region in which these new streaming alternatives have launched.”
