Netflix added 10m subscribers from April to June, well above estimates, but management warned that its pandemic-related growth spurt is slowing.
The streaming group cautioned investors that subscriber growth would slow in the second half of the year, after enjoying the bump from lockdown life in recent months. Netflix expects to only add 2.5m new subscribers in the July to September quarter, which would be its weakest showing in years.
The company also announced that Ted Sarandos, who has overseen content during the company’s massive investment period, would be promoted to co-chief executive alongside Reed Hastings. “Ted drove the revolution in our content strategy,” said Mr Hastings, adding that he did “not expect much to change” in terms of daily operations at Netflix.
Netflix shares dropped more than 10 per cent in after-hours trading. The stock has gained more than 58 per cent this year, reaching record highs as investors flocked to one of the few companies benefiting from the coronavirus pandemic. The S&P 500 index has been flat this year.
Netflix now claims 193m subscribers globally, with the 10.1m added in the past quarter beating its own guidance of 7.5m and Wall Street forecasts for 8.1m additions.
Revenues in the quarter ending in June jumped 25 per cent over last year to $6.1bn, meeting analyst forecasts.
“As we expected . . . growth is slowing as consumers get through the initial shock of Covid and social restrictions,” Netflix said in a letter to shareholders.