Netflix reported slowing subscriber growth on Thursday, sending its share price tumbling nearly 20% in after-market trading.
The world’s largest streaming service actually had reported earnings that were better than what Wall Street analysts were expecting, but the subscription numbers sent investors clamoring for the door.
Netflix, home to shows like “The Crown,” “Stranger Things” and “Bridgerton,” added 8.3 million subscribers in the quarter, falling short of its prior guidance of 8.5 million.
Although Netflix has foreshadowed slowing subscriber growth over the course of the year, it had not yet fully come to fruition as the streamer had benefited from surprise hits like South Korean drama “Squid Game,” which bolstered sign ups in the third quarter.
Netflix attributed the weaker-than-expected growth to COVID disruptions and “macro-economic hardship” in certain regions, including Latin America.
In order to counterbalance slowing growth in US and Canada, Netflix recently announced subscription prices hikes there, as the streaming company closed out the year with 222 million global subscribers.
“Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world,” Netflix said without fully explaining why its fourth-quarter subscriber projections were off.
Nonetheless, the Reed Hastings- and Ted Sarandos-led company called out new shows that garnered massive views like “You,” “The Witcher,” “Emily in Paris” and “Cobra Kai.”
During the fourth quarter, Netflix posted net income of $607 million, or $1.33 a share on revenue of $7.71 billion. Wall Street expected EPS of 82 cents on revenue of $7.71 billion.