Netflix shares fell by as much as 13% in late trading following the publication of disappointing Q2 results.
These showed that in the US it lost 130,000 paid customers in the quarter, ending June with 60.10 million.
Meanwhile, its international operations ended Q2 with 91.46 million paid memberships, up from 88.63 million three months earlier but lower than forecast.
In summarising its results, the company says: “Our missed forecast was across all regions, but slightly more so in regions with price increases. We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during Q2, and competitive intensity and our penetration is varied across regions (while our over-forecast was in every region). Rather, we think Q2’s content slate drove less growth in paid net adds than we anticipated. Additionally, Q1 was so large for us (9.6 million net adds), there may have been more pull-forward effect than we realized. In prior quarters with over-forecasts, we’ve found that the underlying long-term growth was not affected and staying focused on the fundamentals of our business served us well”.
All told, Netflix’s paid membership total increased by 2.7 million in Q2, less than the 5.5 million in the second quarter last year and its 5 million forecast.
It now expects to grow by 7 million paid memberships in Q3, more than the 6.1 million in Q3 last year.
Netflix had revenues of $4,923 million in Q2, up 26% year-on-year, while its net income was $271 million, down from $384 million a year earlier.
