In this video, I will be talking about Netflix's (NFLX 1.74%) Q1 earnings report, why the stock crashed, and what the future holds for the company. You can find the video below, but here are some highlights.
- The company reported Q1 earnings per share (EPS) of $3.53, beating estimates of $2.90, but revenue fell short at $7.87 billion, missing estimates of $7.93 billion.
- But the big headline was the big miss in global streaming paid net additions. The company lost 200,000 subscribers while it was expecting to add 2.5 million.
- Management said that the suspension of its service in Russia and winding down of all Russian paid memberships resulted in a 700,000-subscriber loss, but excluding this impact, paid net additions totaled 500,000 -- still 2 million short of what was expected.
- For the next quarter, the company expects to lose another 2 million subscribers.
- During the earnings call, the CEO hinted that management is considering adding an ad-supported option in the future. This is something that he was against for years.
- According to eMarketer, the U.S. CTV market is expected to reach $24.76 billion in 2024, up from $13.4 billion in 2021.
- A move toward a cheaper ad-supported option would attract more subscribers and advertising dollars to the leading streaming platform.
- Another question management touched on is how best to monetize shared accounts. There are currently more than 100 million households using another household's account. Imagine what will happen when Netflix is able to monetize those accounts.
For the full insights, do watch the video, consider subscribing, and click the special offer link below.
*Stock prices used were the closing prices of April 19, 2022. The video was published on April 20, 2022.
