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Netflix Inc (NASDAQ: NFLX) on Tuesday said the company lost 970,000 subscribers from April through June, preventing the worst-case scenario forecasted earlier, but offered an outlook below Wall Street expectations for the current quarter.
In April, the streaming giant had warned that it expected to lose 2 million customers in the current quarter, shocking the investors and helping raise questions about its long-term growth prospects.
Although the defections for the second quarter were not as steep as expected, Netflix said it estimated to add around 1 million new customers for July through September, while Wall Street analysts were expecting 1.84 million.
After years of growth and market dominance, Netflix’s luck has reversed as rivals including Walt Disney Co (NYSE: DIS), Warner Bros Discovery Inc (NASDAQ: WBD), Amazon.com Inc (NASDAQ: AMZN), and Apple Inc (NASDAQ: AAPL) invest heavily in their own streaming services.
In a letter to shareholders, the streaming giant said it had further observed the slowdown, which it had attributed to various factors, including “connected TV adoption, account sharing, competition, and macro factors such as sluggish economic growth and the impacts of the war in Ukraine.”
Netflix remains the dominant streaming service worldwide, with almost 221 million global paid subscribers.
In April, the streaming giant said it was planning a crackdown on password-sharing.
Netflix said it will launch a less-expensive ad-supported tier next year, for which the company has partnered with Microsoft Corp (NASDAQ: MSFT) last week.
For the second quarter, the company reported earnings-per-share of $3.20, while analysts were expecting it to report a profit of $2.94 per share.
Netflix said the strong US dollar hit revenue, which grew 9%. The company said that revenue would have increased by 13% without the foreign exchange impact.
Picture Credit: Cnet
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