October 3, 2022

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Netflix Shares Fall After Miserable Numbers - Awaiting Customer Journey in Q2

Netflix Shares Fall After Miserable Numbers – Awaiting Customer Journey in Q2

When Netflix presented its 2021 accounts in January of this year, the company estimated a subscriber increase in the first three months of the year to total 2.5 million — 1.5 million fewer than in the same quarter last year.


This is where the TV spring begins

Now the facts show that Netflix lost 200,000 subscribers in the first quarter. Netflix had 221.8 million subscribers at the end of 2021 and 221.6 million at the end of March. The company estimates in the report that the number will drop to 219.6 million subscribers by the end of June this year. This corresponds to a decrease of two million subscribers in three months. This is the first time in more than ten years that a subscription number has fallen to Netflix, according to CNBC.

Netflix explains much of the downturn with the war in Ukraine with subsequent sanctions causing the company to lose 700,000 Russian subscribers. So Netflix estimates that he would otherwise have had an increase of half a million subscribers. But it would be far from the growth estimate that the company itself achieved in January, however.

Arrow from top to half

At the end of November last year, a share of Netflix managed to subscribe to the highest rating of all time – $ 700. Since then, the price has been halved. On Tuesday, shares were trading at just under $350. Netflix’s stake was also one of the winners on Wall Street on Tuesday before showing results for the first quarter. The stock woke up throughout the day with an increase of between three and four percent. The value of the group was estimated at 156 billion dollars, or approximately 1370 billion kroner. But that was before the first quarter subscription numbers came out.

For trading on Wall Street, the stock is down 25 percent after first-quarter accounts were published on 22 NST.

When the exchanges closed, the stock was just over $348. One hour later, at 23 NST, the price on aftersales was $260. With 444 million shares outstanding in the company, that means $39 billion in values ​​— or roughly 350 billion kronor — have evaporated.

You notice clear headwinds

With an operating margin of 20 percent and a net profit of $1.6 billion in the quarter, Netflix remains a very profitable company. But the 10% revenue growth in the quarter is much weaker than in previous quarters. The company will weaken further over the next three months, the company warns

In a statement to shareholders Tuesday night, Netflix acknowledged that revenue growth has slowed significantly. “Live streaming is a winner on the line, as we predicted, and Netflix titles are very popular globally. But our relatively high penetration of homes – when you include the large number of households subscribing to accounts – combined with competition, creates headwinds for growth Income.” The significant increase in flow during the pandemic, the company adds, “disguised the picture until recently.”(Conditions)Copyright Dagens Næringsliv AS and/or our suppliers. We would like you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.

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