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Netflix’s boost from the pandemic is tailing off. After a remarkable first half of the year, the streaming giant missed several targets for the third quarter.

The company picked up 2.2 million paid subscribers globally between July and September, falling short of analyst forecasts of 3.3 million or more, as well as its own prediction of 2.5 million. It reported $6.44 billion in revenue — just above what it had expected — and a net income of $790 million, missing its forecast of $954 million. Shares fell nearly 7% today.

In the year’s first two quarters, Netflix acquired a massive 26 million new subscribers as audiences turned to home viewing during lockdown. During their earnings interview (watch below), the company’s leadership argued that this bump had “pulled forward” new subscribers, resulting in the plateau in Q3. They pointed to their high customer retention rate, and estimated that they will gain a total of 34 million subscribers in 2020, which would be a company record.

For the first time, the highest growth this quarter came from the Asia-Pacific region, which accounted for 1 million new subscribers. Only 180,000 people signed up in the U.S. and Canada, suggesting that Netflix is nearing market saturation in the territory.

Despite the slower-than-expected growth, Netflix remains leagues ahead of its competitors in the streaming space, boasting over 195 million paid customers globally. Disney+ has 60.5 million subscribers, while AT&T’s HBO and HBO Max had 36.3 million at the end of Q2. While Netflix’s shares are up more than 60% this year, Disney’s are down nearly 15%. The company recently announced a reorganization centered around streaming.

Another important bit of context: Netflix, which has borrowed billions annually for years, is getting closer to the point where it can fund its own content. As its shareholder letter stated, “With $8.4 billion in cash on our balance sheet at the end of the quarter plus our $750 million credit facility (which is undrawn), our need for external financing is diminishing.” Once the company is self-funding, new levels of growth become possible.

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