Netflix confirmed it is one of the few companies to benefit from the COVID-19 pandemic with a surge in new subscribers across the globe in the March quarter sending the value of the company’s shares up 11% in after-hours trading.
The streaming pioneer revealed that it added 15 million new subscribers – more than double the 7 million new subscribers it forecast with its March announcement of 4th quarter earnings. In fact, it was the company’s strongest ever quarter for new subscribers.
Netflix reported an extra 15.77 million paid subscribers globally in the first quarter. Analysts were looking for global paid streaming subscriber additions of 8.22 million on average, according to FactSet, after Netflix reported 9.6 million new paid streaming subscribers in the year-ago quarter. It now has 182.86 million subscribers around the world.
The company aims to add more than 8 million new subscribers this quarter to a total of just over 190 million.
Netflix reported first-quarter earnings of $US709 million, compared with $US344 million, in the March quarter of 2019.
Revenue grew 26% to $US5.77 billion from $US4.52 billion in the year-ago period.
The first-quarter results, announced after the market’s close Tuesday, initially sent Netflix shares up 11% in after-hours trading, they then eased to be up around 4.5%. That was after falling 0.8% in Tuesday’s slide in the wider US market.
Netflix shares closed at a record high of $US437.49 on Monday, valuing the company at more than $US191 billion. The shares are up 34% in the year to date while Wall Street is down 15% after a 3% slump on Tuesday.
During the first two months of Q1, our membership growth was similar to the prior two years, including in [the U.S. and Canada],” Netflix executives said in a letter to shareholders.
“Then, with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment.
