Proactive Investors - Netflix (NASDAQ:NFLX) shares dipped in after-hours trading after the streaming platform failed to attract as many new subscribers as expected during the first quarter.
The company added 1.75 million new subscribers during the period, far below the 2.3 million expected.
For the quarter, the company reported earnings per share of $2.88, above the consensus analyst expectation of $2.86. Revenue was $8.16 billion, modestly below to the Street’s expectation of $8.17 billion.
Regarding its newer ad-supported subscription tier, the company noted: “Given current healthy performance and trajectory of our per-member advertising economics, particularly in the US, we’re upgrading our ads experience with more streams and improved video quality to attract a broader range of consumers.”
Netflix also confirmed that its “paid sharing” option, which has been rolled out in Canada, New Zealand, Spain, and Portugal as part of the company’s crackdown on password sharing, will be introduced more broadly including in the US during the second quarter.
The roll-out of paid sharing was initially slated for 1Q. “While this means that some of the expected membership growth and revenue benefit will fall in 3Q rather than 2Q, we believe this will result in a better outcome for both our members and our business,” Netflix said in a statement.
For the second quarter, Netflix said it expects earnings per share of $2.84 on revenue of $8.24 billion. The company no longer provides guidance for its subscriber count.
After plunging about 8% following the release of its results, Netflix stock was trading down 1.3% at US$329.30 at 4.30 pm in New York.