Shares of Netflix are sinking in after-hours trading on Wednesday, following the corporate’s second-quarter earnings launch. As of 5:12 p.m. EDT, shares have been down 12.4%. The pullback within the firm’s inventory price comes as the company reported worse-than-anticipated net paid member additions.
Here is a look at the streaming TV company’s member progress throughout its second quarter — and the way it missed the mark.
Netflix added 2.7 million new members in its second quarter.
It is not shocking the figure disappointed. Going into the interval, management forecast five million paid member additions — barely below the 5.45 million paid members it added in the second quarter of 2018.
In addition, a weak spot within the U.S. might have spooked some buyers. The company’s paid memberships fell sequentially in the domestic market, declining from 60.2 million Q1 to 60.1 million. Luckily, strong progress internationally helped pick up a few of this slack. Paid international member additions came in at 2.8 million. However, the administration did say that its paid member additions had been decreasing than expected throughout all of its regions.
The company had a number of excuses for its worse-than-expected member growth, citing a slight influence from some of the price increases rolled out during the quarter, a larger-than-expected pull-forward effect in Q1 (member growth easily beat expectations in Q1), and weaker-than-expected member growth from the content material that made its debut during Q2.
The stock’s decline is reminiscent of Netflix’s second quarter-final year — another period by which the streaming-TV giant missed its personal forecast for member additions. Similar to this year second quarter, the stock fell after final year’s whiff on member growth as well.