Netflix Inc. (NASDAQ:NFLX) has declared that it will no longer disclose its subscriber count every quarter, hinting at a potential deceleration in user growth.
What Happened: Netflix’s unexpected decision led to a dip in the company’s stock, Reuters last Friday. The streaming giant added 9.3 million new subscribers in Q1, nearly twice the predicted number.
By the end of March, Netflix had a worldwide subscriber base of 269.6 million, marking a year-over-year growth of 16.0%. However, the company will stop revealing subscriber additions each quarter from Q1 2025, choosing to announce them only when significant milestones are achieved.
Co-CEO Greg Peters stated, “This change is really motivated by wanting to focus on what we see are the key metrics that we think matter most to business.”
Analysts fear that this move could unsettle investors and make it difficult for Wall Street to model the company’s business.
Why It Matters: This decision follows Netflix’s first-quarter earnings report, where the company reported a revenue of $9.37 billion, up 14.8%, beating a Street consensus estimate of $9.275 billion. This report also revealed that Netflix added 9.33 million paid subscribers, surpassing expectations.
However, just a week before the earnings report, an analyst fromPiper Sandlercautioned about inflated expectations for Netflix’s Q1 subscriber numbers.
Price Action: On Thursday, Netflix closed at $610.56, 0.51% lower than its previous close. It was trading at $581.49 in the after-hours market.
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