Netflix shares plummeted more than 20% in after-hours trading Tuesday after the company announced that it actually lost ground in terms of subscribers during the first quarter of 2022, falling to 221.64 million around the world.
Usually, the question when Netflix reports numbers is about how many new customers it managed to acquire. This time, its global subscriber base declined by 200,000 from where the company ended 2021, a rare reversal and far from the internal projection of 2.5 million additions in the period.
Itâs the first negative move for subscriber levels in more than a decade, and the pain isnât likely to end anytime soon: Netflix also said it expects to post a loss of another 2 million in the current April-to-June quarter.
Wall Street analysts expected 2.51 million new subscribers to join the Netflix rolls, which would already have been a weaker growth rate than the company has seen in recent quarters. But losing subscribers was not what even bears ventured to predict.
The Street also had expected more from the streaming giant in term of revenue, with a consensus among analysts calling for $7.93 billion. Netflix reported $7.868 billion in revenue in Q1, up less than 10% from a year ago, with earnings per share falling 6% from a year ago to $3.53. The EPS figure, at least, handily exceeded analystsâ expectation for $2.90.
Investors punished Netflixâs already beaten-down shares, sending them below $270 after hours after they finished the regular trading day at $348.61, up 3%. They have lost more than 40% of their value in 2022 amid a broader rotation out of tech stocks and concerns about Netflixâs growth potential. A similar pattern followed the companyâs previous quarterly earnings report last January. After softer-than-expected numbers, shares plunged by more than 20%, where they have essentially remained in the months since.
The Netflix numbers were clearly weighing on streaming rivals but nowhere near the extent that investors…