Despite providing a lighter-than-anticipated outlook on Tuesday, Netflix Inc exceeded Wall Street earnings projections for the first quarter, highlighting the difficulties the seasoned streaming service confronts in pursuing growth.
The business claimed it delayed some financial gains by delaying the wider introduction of a scheme to stop unapproved password sharing into the second quarter in order to make changes, but claimed it was happy with the early results.
The market leader in streaming video is exploring for additional revenue streams, including as a new ad-supported service and a password crackdown, as it shows indications of market saturation.
The first quarter’s revenue and profitability were substantially in line with Refinitiv’s average analyst predictions. With $8.162 billion in revenue, earnings per share reached $2.88.
In the company’s post-earnings video interview, co-chief executive Ted Sarandos stated, “We are growing and we are profitable.” “We are following a clear plan to accelerate growth in both revenue and profit.”
Following the release of the report, shares of Netflix fell as much as 11% before rising 1.4%.
The streaming sector, whose growth has stalled as competition has risen, looks to Netflix as a leading indicator.
Analyst projections of 2.06 million new streaming customers were not met by Netflix’s 1.75 million subscriber growth from January to March.
The first-quarter results were characterized as mixed by PP Foresight analyst Paolo Pescatore.
“Netflix is a mature company, so it depends less on subscriber growth. For important stakeholders, this indicator continues to have an impact, he said.