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.