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SAN RAMON, California (AP) — Netflix It hit the last quarter of disappointing subscriber growth in the last three months of last year, a trend that management predicts will continue into the new year, undermining the tougher competition video streaming leader.
The Los Gatos, California company added 8.3 million subscribers worldwide in the October-December period; that’s about 200,000 less than management’s estimate. In addition to announcing fourth-quarter results on Thursday, Netflix According to FactSet Research, it forecasted 2.5 million subscriber growth in the first three months of this year, well below analysts’ expectations of a 4 million increase.
The sad news caused NetflixAfter the figures were announced, the stock price in long-term trading fell by about 20%, deepening the sharp decline in the last two months.
It has been a tough year for Netflix After making dazzling gains during the pandemic quarantines that led homebound people to service in 2020.
Netflix It amassed 18.2 million subscribers worldwide in 2021, the slowest annual growth rate in five years. then he came Netflix It gained more than 36 million subscribers in 2020. The service currently has nearly 222 million subscribers worldwide, more than any other video streaming leader.
However, Walt Disney Co. and other services backed by strong competitors like Apple have been breaking ground in recent years, and a handful of other networks are also getting into streaming video in an attempt to grab the eyeballs and some household budget. Increased competition is one reason Netflix last year it decided to expand into video games.
“Background for 2022 Netflix “It seems to be built around the theme of plenty of competition,” said Third Bridge analyst Joe McCormack.
While acknowledging in its quarterly shareholder letter that competition has a “marginal” impact on growth, Netflix He emphasized that the service still continues to develop in every country where it is available.
On Thursday’s conference call, Netflix The executives also said the uncertainty caused by the tide of the pandemic over the past year has made it difficult to measure future growth.
Co-CEO Ted Sarandos said COVID has had “a lot of ups and downs”. The company’s other CEO, Reed Hastings, also expressed some disappointment before adding, “For now, we’re just trying to stay calm and figure this out.”
Despite the turmoil, the company is doing well financially, although profit margins are shrinking and cash is being withdrawn by spending it on more unique programs to attract subscribers. Netflix In the fourth quarter, it earned $607 million, or $1.33 per share, up 12% year-on-year. Fourth-quarter revenue rose 16% to $7.7 billion.
But investors are more worried about that. Netflix It may be approaching the peak of its popularity. These concerns cause NetflixThe stock price will drop more than 40% from its peak of around $700 reached in mid-November.
future growth opportunities, especially Netflix‘s largest markets, the US and Canada, are starting to turn out to be where most households interested in subscribing to the service already have an account. Netflix It ended 2021 with 75.2 million subscribers in the US and Canada, which meant a negligible one-year gain of 1.3 million subscribers in that region.
Last week, Netflix It increased its price by roughly 10% in the US and Canada – a move that could cause some subscribers to cancel the service based on the company’s history of past price hikes.
in the upward direction, Netflix On Friday, it will announce the fourth season of “Ozark,” one of its most popular series and a potential magnet for new subscribers.
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