Netflix growth, stock zapped as pandemic eases

Netflix’s pandemic-fueled SAN RAMON, CALIF. — subscriber growth is slowing far faster than anticipated as people who have been cooped at home are able to get out and do other things again.

The video-streaming service added 4 million more worldwide subscribers from January through March, its smallest gain during that three-month period in four years.

The performance reported Tuesday was about 2 million fewer subscribers than both management and analysts had predicted Netflix would add during the first quarter.

It marked a huge comedown from the same time last year when Netflix added nearly 16 million subscribers. That came just as governments around the world imposed lockdowns that created a huge captive audience for the leading video-streaming service.

Signaling that the trend is continuing, Netflix forecast an increase of just 1 million worldwide subscribers in the current April-June period, down from an increase of 10 million subscribers at the same time last year.

“It’s just a little wobbly right now,” Netflix co-CEO Reed Hastings said during a discussion of the company’s results streamed Tuesday.

The poor showing to start the year rattled investors, causing the Los Gatos, California, company’s stock to drop by more than 8% in extended trading, even though Netflix’s revenue hit analyst targets and its profit exceeded estimates.

Netflix earned $1.71 billion, or $3.75 per share, more than doubling from a year ago. Revenue climbed 24% from the same time last year to $7.16 billion.

The inevitable slowdown in subscriber growth had been widely telegraphed by Netflix’s management in repeated reminders that its gains were a pandemic-driven anomaly.