Netflix

Netflix Takes a Tumble: Ditches Subscriber Counts and Misses Q2 Revenue Expectations

 

Why Netflix’s stock took a hit as it stops reporting subscriber counts and delivers a downbeat Q2 revenue forecast. Analysts weigh in on the impact and future prospects.


Netflix’s stock took a bit of a tumble, dropping about 6.22% to $572.58 before the market opened on Friday. What caused the dip? Well, Netflix made a surprise announcement: they’re no longer going to share how many subscribers they have. Plus, their revenue forecast for the upcoming quarter didn’t meet the expectations of Wall Street.
This quarter, Netflix was aiming for a revenue of around $9.54 billion, but they fell short of that mark. And starting from the first quarter of 2025, they won’t be telling us how many subscribers they gain or lose each quarter anymore.
Analysts aren’t entirely pleased with this decision. Mark Mahaney from Evercore ISI thinks it’s not a great move, even though it wasn’t totally unexpected.
Goldman Sachs thinks this change might stir up some debate among investors. They reckon folks will be keeping a close eye on whether initiatives like shared accounts will keep bringing in the bucks, especially now that Netflix isn’t sharing as much info.
Netflix wants investors to focus more on how much money they’re making and their operating margins rather than just how many new subscribers they’re getting.
After Netflix shared their revenue outlook for 2024, which wasn’t as high as analysts hoped, their stock took another hit, dropping about 5% after hours on Thursday. But despite these setbacks, some analysts are still feeling pretty optimistic about Netflix’s future. In fact, a few of them even bumped up their price targets for the stock.
Sophie Lund-Yates, who’s an analyst at Hargreaves Lansdown, thinks one reason for Netflix’s success is their cheaper subscription option with ads. This has attracted a lot of new customers who might have been hesitant to join otherwise due to financial reasons. In the first quarter alone, Netflix snagged 9.3 million new subscribers, nearly twice as many as analysts predicted. That brings their total global subscriber count to 269.6 million as of March.
But Lund-Yates warns that the real challenge for Netflix will be holding onto these subscribers, especially as other streaming services start offering their own cheaper deals.
So, while Netflix might be facing a few bumps in the road, there’s still a lot of faith in their ability to keep growing and adapting.

Also Read: How ‘The Glory’ Ignited Netflix’s South Korean Success, Adding $36 Million to Revenue

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