Netflix shares plummeted 14 percent in after-hours trading after the streaming giant missed its own forecasts by over a million subscribers.
The group’s second-quarter results were announced on Monday and revealed 5.2 million new subscribers, bringing the total to 130 million customers worldwide.
Netflix revealed a profit of $384.3 million but the missed forecast sent shares tumbling to $346.05.
In a letter to shareholders, the streaming giant behind shows including The Crown and 13 Reasons Why, said it had “a strong but not stellar” second quarter.
“As a reminder, the quarterly guidance we provide is our actual internal forecast at the time we report and we strive for accuracy, meaning in some quarters we will be high and other quarters low relative to our guidance,” Netflix added.
Analyst Daniel Ives at GB Insights said: 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.”
This year, the company is expected to invest as much as $12 billion into new content in order to keep competition from groups such as Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN) at bay.
Apple is planning to increase its spending on original content in video, music and publishing from $1 billion to $4.2 billion by 2022.
“We believe that consumer appetite for great content is broad and that there is room for multiple parties to have attractive offerings,” the company said in the letter. “Our strategy is to simply keep improving, as we’ve been doing every year in the past.”
For the second quarter of 2018, Netflix (NASDAQ: NFLX) reported a profit of 85 cents a share, which is an increase from $65.6 million, or 15 cents a share, a year earlier.
