Netflix dashed hopes for a quick rebound after forecasting weak first-quarter subscriber growth on Thursday, sending shares sinking nearly 20% and wiping away most of its remaining pandemic-fueled gains from 2020.
Netflix projected it would add 2.5 million customers from January through March, less than half of the 5.9 million analysts had forecast.
Netflix tempered its growth expectations, citing the late arrival of anticipated content, such as the second season of Bridgerton, and the film The Adam Project.
The world’s largest streaming service added 8.3 million customers from October to December, when it released a heavy lineup of new programming including the star-studded movies Red Notice and Don’t Look Up and a new season of The Witcher.
Industry analysts had projected Netflix would add 8.4 million, according to Refinitiv IBES data.
The company’s global subscriber total reached 221.8 million at the end of 2021 – 39.6 million of them in Latin America. Despite generating less revenue per member than other regions, Latin America was the market in which Netflix grew the most in the last quarter: 14%.
In a letter to shareholders, Netflix said it believed the ongoing COVID-19 pandemic and economic hardships in several parts of the world like Latin America may have kept subscriber growth from rebounding to levels seen before the pandemic.
The company posted adjusted earnings per share of $1.33, crushing analyst consensus estimates of 82 cents.
Netflix last week raised prices in its biggest market, the United States and Canada, where analysts say growth is stagnating and is now looking for growth overseas.
The company rode a roller coaster during the pandemic, with steep growth early in 2020 when people were staying home and movie theaters were closed, followed by a slowdown in 2021. Netflix picked up more than 36 million customers in 2020, and 18.2 million in 2021.
READ ALSO: Disney Plus’ first anniversary in Brazil: These are the Top 10 films and series
Netflix‘s subscriber growth in 2022 had been expected to stabilize and return to the pace logged before the pandemic, when it added 27.9 million subscribers in 2019, analysts say. The company’s upcoming slate includes new installments of Ozark, Bridgerton, and Stranger Things and a three-part Kanye West documentary.
But competitors including Walt Disney Co‘s Disney Plus and AT&T‘s HBO Max, are pouring billions into creating new programming to grab a share of the streaming market.
Netflix reported fourth-quarter revenue of $7.71 billion, in line with estimates of $7.71 billion.