This archive report was first published on 22 April 2020.
Published on April 22, 2020, Netflix reported its Q1 2020 earnings, revealing a substantial increase in new paid subscribers.
The company added 15.8 million new subscribers in Q1 2020, a significant jump from the 8.33 million subscribers in Q4 2019. This growth is attributed to the COVID-19 pandemic, which has led to increased demand for home entertainment services like Netflix.
‘Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth. In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect to view to decline and membership growth to decelerate as home confinement ends, which we hope is soon,’ said Netflix CEO Reed Hastings.
Despite the subscriber uptick, Netflix reported relatively average earnings, with $1.57 Earnings Per Share (EPS) and $5.77 billion in revenue. The company expects 7.5 million global paid subscriber additions in Q2, although it warned that these numbers are ‘mostly guesswork’ due to the uncertainty surrounding the pandemic.
However, in Q3, Netflix expects lower net subscriber additions as more economies open. The company also faces challenges in content production, with the massive postponement of shoots potentially leading to a drop in revenues.
‘When it comes to production, almost all filming has now been stopped globally. With the exception of a few countries like Korea and Iceland. This has been devastating for millions of workers in the TV and film industry – electricians, hair and make-up artists, carpenters, and drivers who are often paid hourly wages and work project-to-project,’ the company noted.
Netflix has created a $100 million fund to help with hardship in the industry, starting with the hardest-hit workers in their productions.
