Markets Insider
- Netflix missed Wall Street expectations for new streaming customers on Monday, sending its stock plummeting.
- The company said it earned $0.85 cents a share, topping the Wall Street consensus of $0.79.
- Follow Netflix’s stock price in real-time here.
Shares of Netflix plunged more than 13% Monday after the streaming giant reported second-quarter subscriber growth that missed Wall Street expectations.
Here are the important numbers:
- Revenue:$3.91 billion. Analysts were expecting $3.94 billion. In the second quarter last year, Netflix posted $2.79 billion in sales.
- Earnings per share:85 cents. Analysts were looking for 79.4 cents a share. In the second quarter of 2017, it earned 15 cents a share.
- Subscriber additions:5.2 million total — 1.1 million in the US and 4.1 million internationally. Analysts were expecting 6.3 million — 1.2 million in the US and 5.1 million internationally, according to Bloomberg. In the second quarter last year, it added 5.2 million — 1.1 million US subscribers and 4.1 million international ones.
Cash burn — something Netflix has been reducing for the past few quarters — also had a noticeable uptick. The company said its free cash flow (FVF) was negative $559 million for the period. That’s down from the negative $608 million in the same quarter one year ago, but nearly three times the previous quarter’s burn of $286.5 million.
The burn is all part of Netflix’s heavy investment in original content and top Hollywood talent. The company has said it plans to spend $14 billion on shows and movies this year.
“We had a strong but not stellar Q2, ending with 130 million memberships,” Netflix said in a letter to shareholders. “Internet video is growing globally and we are fortunate to be one of the leaders. In addition to succeeding commercially, we are starting to lead artistically in some categories, with our creators earning enough Emmy nominations this year to collectively break HBO’s amazing 17-year run.“
Subscription numbers are one of the most closely watched metrics for Netflix, and Daniel Ives, a technology analyst at GBH Inisights, said the miss was concerning.
“After handily blowing away Street expectations on subs the last few years this is a clear speed bump for Netflix as the international miss was most concerning given this is the linchpin to the core growth thesis for the coming years,” he said in an email.
Netflix is was up 108% this year ahead of its second-quarter results.
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