Netflix Q1 Revenue Exceeds Expectations, Net Subscriber Additions Drop Sharply

On April 20, the streaming media giant Netflix released its first quarter 2021 financial report. How did Netflix perform in the first quarter? Here are some key data↓

Revenue: $7.16 billion, up from $5.77 billion a year ago and $7.14 billion expected

Earnings per share: $3.75, up from $1.57 a year ago and $2.97 expected

Net additions of paid subscribers: 3.98 million, down from 15.77 million in the same period last year and the expected 6.29 million

Netflix's stock price fell about 10% in subsequent trading after the results were announced. The editor checked Google Trends and found that "Netflix stock" had more than 20,000 searches on April 20, ranking 19th in Google's daily search trends, second only to Apple's press conference in popularity.

Netflix faces many competitors, such as Disney's Disney+ and Hulu, AppleTV+ and Amazon Prime. However, Netflix co-CEO Reed Hastings said competition was not the main reason for the weak subscriber numbers.

Netflix said that the growth of paid members in the first quarter slowed down, on the one hand due to the early release of user growth driven by COVID-19 in 2020, and on the other hand due to the reduction of content in the first half of this year due to production delays affected by COVID-19.

Not only in the first quarter, Netflix’s user growth forecast for the second quarter was also far lower than market expectations. Netflix expects to gain just 1 million paid subscribers in the second quarter, compared with Wall Street's forecast of 4.44 million.

However, Netflix expects its content to resume later this year. "We continue to expect a strong second half of the year as we welcome the arrival of new seasons of some of our biggest hits and an exciting lineup of movies," Netflix said in a letter to investors.

Separately, Chief Financial Officer Spencer Neumann told investors: "The key is that the business remains healthy … and the business is still growing."

Netflix also mentioned in a letter to investors: "In the short term, COVID-19 has brought some uncertainty; however, in the long term, the clear trend in the entertainment industry is that streaming media will replace television."