Netflix shares plunged in after-hours trading after the streaming giant's subscriber growth fell far short of Wall Street's expectations.
Calling the quarter "strong but not stellar", Netflix boss Reed Hastings cited hurdles such as increased competition from YouTube, HBO, Disney, Amazon and Apple, as well as foreign currency fluctuations as the streaming giants accelerates its global business.
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.
Well to many adding 4.47 million subscribers and hitting a new all-time high in subscribers sounds great to wall street they wanted to see a higher subscriber count.
For the current quarter, the company is projecting revenue of $3.988 billion, below the consensus for $4.126 billion. Specifically, Netflix is anticipating a net add of 5 million new subscribers for the September quarter, a tad below some analyst projections that saw Netflix bringing 6 million new subscribers on board. Earnings grew 32 percent from previous year to $384 million, or 85 cents per share.
Analysts had been modeling $3.94 billion in revenue and EPS of 79 cents.
Subscriber additions: 5.2 million total - 1.1 million in the United States and 4.1 million internationally. That erased roughly $25 billion from the company's market valuation.
Despite its second-quarter misfire on subscriber growth, the Los Gatos, California, company reported earnings that beat analyst estimates.
Netflix cited an array of competitors, starting with YouTube.