Netflix takes a dip

Netlfix Inc. reported its latest financial results after the closing bell on Wall Street on Tuesday.

The online streaming service company reported revenue just shy of analyst estimates at $7.868 billion in the first quarter vs. $7.929 billion expected.

Earnings per share topped expectations at $3.53 per share vs. $2.90 per share expected.

Netflix lost 200,000 subscribers in the first quarter of 2022 – the first time in over 10 years.

”Our revenue growth has slowed considerably as our results and forecast below show. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently. While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we’ll be holding our operating margin at around 20%. Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors. These are Netflix’s core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term,” Netflix said in a statement to shareholders following the latest results.

”In the near term though, we’re not growing revenue as fast as we’d like. COVID clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the COVID pull forward.”

Netflix Inc. chart

Shares of Netflix ended the trading day up by 3.18% on Tuesday at $348.32 per share. However, the stock price fell sharply in the after-market trading hours – down by over 25% due to loss of subscribers and slow growth outlook.

Here is how the stock has performed in the past year:

• 1 Month -8.96%
• 3 Month -31.75%
• Year-to-date -42.13%
• 1 Year -36.57%

Netlfix Inc. is the 79^th largest company in the world and with a total market cap of $154.87 billion.

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Sources: Netlfix Inc., TradingView, CompaniesMarketCap